UK: England and Wales: the Court of Appeal on what is wrong with insider dealing

Earlier this year Mr Christopher McQuoid was found guilty of insider dealing and sentenced to 8 months' imprisonment. He appealed, making several arguments including: the sentence was wrong in principle because the FSA had used his case to signal a change in its policy in cases of insider dealing; the sentence was manifestly excessive and that regard should be had to his previous good character and the fact that the offence concerned a one off transaction. 

The Court of Appeal rejected his appeal (R v McQuoid, Criminal Division, 10 June 2009). The judgment has not yet been published on BAILII but a summary has been provided here by Outer Temple Chambers (where Michael Bowes QC, counsel for the FSA in the case, is based). The court's decision is significant because, in addition to the sentencing guidelines provided, there is discussion of the rationale for the prohibition and prosecution of insider dealing. In the court's view, according to the Outer Temple Chambers summary, insider dealing is not a victimless crime and, when done deliberately is a form of cheating which betrays the principles of confidentiality and trust and undermines public confidence in the market. 

The arguments for and against the prohibition of insider dealing have generated a large academic literature and are well described here by Professor Stephen Bainbridge. The view of the FSA - which the Court of Appeal endorses - is that insider dealing reduces market confidence and represents the unfair exploitation of information (see "The FSA's Approach to Insider Dealing" - a speech by Margaret Cole, the FSA's Director of Enforcement). 

Update (24 June): the court's decision has been reported in The Times - see here - but note that such reports are only available for a limited period of time.