AYODELE DOYINSOLA .O
DEPARTMENT OF LAW
OBAFEMI AWOLOWO UNIVERSITY
ILE-IFE OSUN STATE
PROFESSOR M.T. OKRORODUDU-FUBARA
IN PARTIAL FULFILMENT OF THE COURSE “LAW OF BUSINESS ASSOCIATION” (BUL 502)
Concept of Insider dealing
One of the areas of company law in which the general equitable rules seem to be inadequate to protect the outsider is the use of insider information to secure undue advantage over the outsider in the purchase or sale of corporate securities. Insider dealing has been defined to occur when a person or group of persons who being in possession of some confidential and price sensitive information not generally available to the public, utilizes such information to buy or sell securities for the benefit of himself, itself or any person. In simple parlance, Insider dealings refers to the ability of key employees of a company to profit from knowledge or information of a company that has not yet become public. It has been further explained as the premature blowing or utilization of the “gun-powder” to reach unfair economic and financial advantage. From the above definition, it is important to note that particular emphasis are placed on certain factors necessary to satisfy the concept of insider trading:
* The information must have been obtained from a source within the company
* The information has to be a price-sensitive one
* The information must be an unpublished one
* The informed stakeholder must have acted upon the information
However, it is not the case that there are clear-cut rules as to determining the existence of these... [continues]
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