Insider trading and the disclosure of inside information after Geltl v Daimler--A comparative analysis of the ECJ decision in the Geltl v Daimler case with a view to the future European Market Abuse Regulation

Abstract

The Court of Justice of the European Union’s (ECJ)1 decision in Geltl v Daimler provides an ideal opportunity to analyse the question of the point in time at which, during a protracted decision-making process, the insider trading prohibition is triggered and, absent any justification for delayed disclosure, when the issuer is obliged to make public disclosure. The case deals with the resignation of Jürgen Schrempp, the former CEO of DaimlerChrysler AG. However, its relevance reaches far beyond changes in board membership. It touches upon a critical question in any market abuse regime which is of great practical significance: any major change in the life of a listed company, such as an M&A or capital markets transaction, will require internal preparations by the issuer and its advisors, during which a premature disclosure would be likely to affect or even endanger the transaction. At the same time, it is obvious that the individuals involved in the preparation of the transaction should not trade in the issuer’s securities, because they possess non-public knowledge about circumstances which may potentially have a significant effect on the market price of those securities.