Anyone know the possible penalties for insider trading?

[Bambiagain]

I've been looking online but had no success (except with US law, which is no use). It's a hypothetical case where someone married to a non-executive board member is caught out having bought shares prior to a company take-over. The person concerned is fairly dim, but does know that insider trading is illegal although she isn't sure whether as a family member she is committing a crime. She has used a false name to buy the shares to conceal from her husband that she is buying the shares, which of course implies that she does know she shouldn't be doing it. The questions I need answered are 1) what penalty could be involved? 2) could she escape with a caution since it is a first offence and the husband will support her? I want to avoid a custodial sentence! I hope someone can help.

[FredPuli43]

Maximum penalty for the offence of 'market abuse' which includes insider trading, is 7 years imprisonment.
'Ignorance of the law is no excuse' (or 'ignorantia juris haud excusat' if the lawyer is very set in tradition !). Can't say what will happen in this case. Depends on the circumstances; how much was involved, what effect the abuse had on the market and those potentially affected, and so on.

[Bambiagain]

Thank you. It's a take-over of a small company by a somewhat larger one. The sums involved aren't going to be huge - investment of a few thousand at the most. I don't suppose the markets in general would be much affected.

[EDDIE51]

Insider trading happens thousands of times every day but 99 % is never detected , what makes you think this case will be 'found out' .

[methyl]

How on earth did someone buy shares under a false name? How on earth will that person sell them? The person could get charged with Money Laundering and a lot more. I'm not a lawyer but I know that I have to produce ID when buying and selling shares at my bank even though they know me well.

This sounds like a coursework question.

[EDDIE51]

It does say it is hypothetical methyl. sounds like a plot for a book to me.

[methyl]

The plot line of this Brian Rix farce must include a chance comment by the husband to his wife in terms which she understands (we have established fact that she is "dim").

"Darling, here is a few thousand pounds in cash to buy a couple of shares, and here is your new name and new identity documents. It's just for today".
"Have lunch with your friends then get to the bank by half-past-three".
"Must fly, I have to get to a Board Meeting about the takeover. See you for dinner. Kissy kissy".

[mike11111]

"I want to avoid a custodial sentence!"

So it's you!

[methyl]

At this point mike211 Ace Detective enters the room. "Don't try to play the dumb blonde on me babe". "That pile of dough under your pillow didn't come from selling home-baked cookies". "It's the Scrubs for you unless you come clean".

[Bambiagain]

Mike11111 - no, I'm smarter than that! Yes, it's the plot for a book - well, a small part of the book.

And Methyl, thank you for your exceptionally helpful comments!!

[cathfromsaron]

remember your character would need to 'profit' from their deeds!

[Bambiagain]

That's what she wants to happen, of course.

[cathfromsaron]

and tongues will wag and THEN she gets caught ...