Insider trading scandal: Seiled 1.3 million euros!

Insider trading scandal: Seiled 1.3 million euros!

In a remarkable case, the Higher Regional Court of Frankfurt am Main decided that a defendant who had acted in the mistake of having insider information could not be excluded from the confiscation of revenues from its business. This shows how strictly the legal framework for insider trade is, even if the intention was not based on the fraudulent basis.

The accused, an employee of Deutsche Börse AG, is accused of making insider transactions in 154 cases. He allegedly gained knowledge of the publication of ad hoc communities, which he then wanted to use illegally to his advantage. The public prosecutor accuses him of bought stocks and derivatives about his wife's depot and then sold them after the news was published. It is interesting that in about a third of these cases, insider information actually banged what makes the Situation more complicated.

legal framework of confiscation

The Frankfurt am Main Regional Court had already taken measures to ensure the confiscation of the proceeds from these transactions. It pointed out that business is based on a fortune of almost 1.3 million euros, which reflects the value of the financial instruments sold at the time of the sale. The accused filed a complaint against this arrest, but the Higher Regional Court rejected this.

The judge found that there was strong suspicion of insider transactions based on the accused's own statements and a quick review by the BaFin. This shows that the review of such incidents can be taken seriously and that also supposedly minor violations of the securities law can result in considerable consequences.

A crucial point that the court noted is the definition of the facts for the confiscation. The intention to test is enough to serve as the basis for legal steps. In this case, both accomplished and attempted insider transactions were able to flow into the evaluation. The court made it clear that the profit that the accused made from his business was subject to confiscation, even if some purchases were based on incorrect acceptance.

The fact that the legal consequences are also extended to the attempt to insider trade is an important signal. Potential perpetrators could be deterred to move in the gray area of the Loi insider trade, even if they believe that they are in the legal framework.

In this case, the proceeds from the sales are subject to the sales, since the papers are no longer in the possession of the accused. The legislation stipulates that no deductions for actually made expenses are allowed, which means that the entire profit can be retained from the shops. The legislature wanted to prevent perpetrators from reducing revenues in order to escape the legal consequences.

Higher Regional Court Frankfurt am Main, decision of July 25, 2024 - 7 WS 253/23