NCJ Number
133133
Date Published
1991
Length
172 pages
Annotation
The nature and dimensions of insider trading in Australia and the effectiveness of the law as a mechanism for insider trading control are examined.
Abstract
Although insider trading in Australia has been an offense under various Securities Industry Acts since 1970, no successful prosecution has occurred and no substantial body of judicial commentary has emerged. The current research effort, initiated in 1988, involved interviews with officials and professionals in Canberra, Melbourne, Perth, and Sydney. Mail responses were also obtained from officials in other capital cities. In addition, the study included principals and staff in broking houses, partners undertaking corporate work in Australia's four largest firms, merchant bankers, financial advisers and journalists, and industry group representatives. A common observation by both regulators and the regulated was that the law is not clear on insider trading. Regulatory authorities are reluctant to bring insider trading charges unless they have an extremely good chance in the courts. For this reason, much of the regulatory effort in respect to insider trading has been directed to informal enforcement without resort to the courts. The reliance on informal settlement means that the law has little, if any, deterrent effect. Informal settlements tend not to be publicized, and the result is an unsatisfactory law enforcement system. The book discusses legislative and judicial responses to insider trading, notes insider trading cases in Australia, and examines insider trading in the United States and the United Kingdom. The author specifically looks at the extent of insider trading in Australia and its effects, self-regulation and business ethics in relation to insider trading, the prosecution of insider trading, and insider trading law reform. An appendix provides additional details on the research methodology. References, tables, and endnotes