Monday 5 August 2024
Dear Subscriber,
I hope you had a great weekend. Please see below for the question, the answer to the previous question and associated resources. This is the web version of this newsletter.
Question: David is the CEO of FutureTech Ltd., a publicly traded company. He becomes aware of confidential information that the company is about to announce a breakthrough technology, which is expected to significantly increase the company’s stock price. Before the information is made public, David shares this information with his friend, Laura, who buys a large number of FutureTech Ltd. shares. Following the public announcement, the stock price of FutureTech Ltd. soars, and Laura makes a substantial profit from her investment. The Financial Conduct Authority (FCA) investigates the trades as suspect. Which of the following best describes the legal implications for David and Laura under insider dealing laws?
1. David has breached his fiduciary duty but Laura has not committed any offense.
2. Both David and Laura can be prosecuted for insider dealing under the Criminal Justice Act 1993.
3. David can be prosecuted for insider dealing, but Laura is only liable if she knew the information was confidential.
4. Laura can be prosecuted for insider dealing, but David can only face civil penalties.
5. Both David and Laura can only be liable if FutureTech Ltd. suffers a financial loss as a result of their actions.
Study Material: For more on the topic of this week’s question see the video linked here and if you are looking for a relevant* title, see here.
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Answer and feedback to last week’s question: The UK government proposes a new law that significantly restricts the freedom of assembly and protest, citing national security concerns. The proposed law includes provisions that allow the police to pre-emptively detain individuals suspected of planning protests and to impose heavy fines on organizations that organize unauthorized gatherings. Several human rights groups argue that the proposed law infringes on fundamental freedoms protected under the European Convention on Human Rights (ECHR) and the Human Rights Act 1998.
Which of the following principles is most relevant in determining the constitutionality of the proposed law under the UK’s legal framework?
1. The principle of parliamentary sovereignty
2. The principle of proportionality
3. The principle of the separation of powers
4. The principle of judicial review
5. The principle of the rule of law
Correct Answer: 2. The principle of proportionality. Feedback: The principle of proportionality is central to determining the constitutionality of the proposed law under the UK’s legal framework, particularly concerning the European Convention on Human Rights (ECHR) and the Human Rights Act 1998. Proportionality requires that any restrictions on fundamental rights, such as the freedom of assembly and protest, must be necessary and appropriate to achieve a legitimate aim, and must not go beyond what is necessary to achieve that aim.
In this scenario, the proposed law’s restrictions on the freedom of assembly and protest must be carefully scrutinized to ensure they are proportionate to the national security concerns cited by the government. The principle of proportionality ensures that measures taken do not excessively infringe on individuals’ rights and freedoms.
Other principles mentioned are also important but address different aspects of the constitutional framework: Parliamentary sovereignty (1): Refers to Parliament’s supreme legal authority, but it does not directly address the balance of rights and restrictions. Separation of powers (3): Ensures the distribution of power among the legislative, executive, and judicial branches, but it does not specifically address the proportionality of laws. Judicial review (4): Allows courts to review the legality of government actions, including the proposed law, but the principle of proportionality would be applied in such a review. Rule of law (5): Ensures that all actions are conducted under the law, but proportionality specifically addresses the balance of rights and restrictions.
Therefore, the principle of proportionality is the most relevant in assessing whether the proposed law appropriately balances national security concerns with the protection of fundamental freedoms.
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All the best
Dr Ioannis Glinavos
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