NOT COMMON KNOWLEDGE
the identity of the lender, nor the amount of such loan had been disclosed to the public. After the shares were acquired by the appellants, the details of the loan were announced on SENS and the share price of Listco shares increased dramatically.
The question before the court was whether:
The relevant information constituted “inside information” which was defined in the Securities Services Act as follows — “specific or precise information, which has not been made public and which —
1. Is obtained or learned as an insider; and
2. If it were made public would be likely to have a material effect on the price or value of any security listed on a regulated market”.
The acquisition by the appellants of the Listco shares contravened the insider trading provisions of the act, which prohibit a person who knows that he or she has inside information from dealing in the listed securities to which the inside information relates or which are likely to be affected by it. By way of defence, the appellants contended that the relevant information did not constitute “inside information” as the relevant information was, among other things:
Not “specific or precise” information as the loan was merely approved in principle, no loan agreement had been concluded in writing, there were conditions precedent to the loan and there was uncertainty whether Listco would ultimately be able to access the funds; and
Not “likely to have a material effect” on the price or value of Listco’s