Insider Trading Prosecutions In Finland
Legal Context Recap (to understand the cases)
Insider trading is regulated under Chapter 51 of the Finnish Criminal Code (Rikoslaki) and the Securities Markets Act.
Two main offenses:
Abuse of inside information: Using non-public, precise information likely to affect market prices for personal gain.
Unlawful disclosure (tipping): Providing inside information to someone else who then trades.
Aggravated abuse: Higher penalties (up to 4 years) if the violation involves large profits, a person in a responsible position, or methodical planning.
Key elements the courts consider:
Precision of information
Materiality (likely to impact share prices)
Intent / knowledge of the offender
Case 1: KKO:2024:25 – CEO Aggravated Insider Trading
Facts: The CEO of a listed company bought 550,000 shares before a large customer deal was publicly announced.
Issue: Whether the CEO’s knowledge of the upcoming deal constituted “inside information.”
Decision: Supreme Court held the CEO guilty of aggravated abuse. Even though the deal was not yet finalized, the information was a realistic prospect and significant enough to impact stock price.
Sentence: Suspended prison sentence (4 months).
Lesson: “Precision” does not require certainty; realistic prospects are enough. Senior executives are assumed to understand the market impact of non-public information.
Case 2: Helsinki District Court, 2011 – Three Individuals Convicted
Facts: A lawyer, his spouse, and a broker traded on inside information about a corporate transaction.
Gains: Over €370,000 in illegal profits.
Issue: Indirect insider trading via a family member and a professional advisor.
Decision: Convicted for aggravated insider trading.
Sentence: Suspended prison sentences; profits were forfeited to the state.
Lesson: Insider trading liability extends beyond company executives; professional advisors and family members can be prosecuted.
Case 3: Nokian Tyres Case (Court of Appeal, 2025)
Facts: Four employees traded company stock options ahead of material announcements; the CEO failed to timely disclose information.
Decision:
Three employees fined
One employee received a suspended sentence of 4 months + 15 days
CEO fined for securities market information offense
Company fined €50,000
Lesson: Both corporate and individual liability are recognized; lower-level employees can be prosecuted if they trade on inside information.
Case 4: KKO:2012:52 – Trading Ahead of Earnings Announcement
Facts: A mid-level manager traded shares before a major earnings report, expecting a positive market reaction.
Issue: Whether managerial knowledge of internal financials constitutes inside information.
Decision: Manager convicted; the Court emphasized that even partial knowledge of material results can qualify as inside information if the probability of market impact is significant.
Sentence: Fine and suspension of right to manage securities trading for 2 years.
Lesson: Insider trading rules apply to middle management, not just top executives.
Case 5: KKO:2009:56 – Tipping Case
Facts: An employee of a Finnish bank disclosed non-public acquisition plans to a friend, who traded on the information.
Decision: Both the employee and friend were convicted.
Sentence: Employee received a suspended sentence; friend fined.
Lesson: Unlawful disclosure is as serious as direct trading; tipping liability is recognized even if the tipper gains no personal profit.
Case 6: KKO:2007:11 – Small-Scale Insider Trading
Facts: A technical staff member at a technology company bought shares based on internal product launch information.
Issue: Whether the information was “material” enough to be considered inside information.
Decision: Convicted; Court clarified that materiality is relative to company size and potential market impact, not absolute thresholds.
Sentence: Fine proportional to profit made.
Lesson: Even small gains can trigger liability if based on inside information.
Case 7: KKO:2010:41 – Employee Trading Without Public Knowledge
Facts: A finance employee traded in shares ahead of a contract renewal announcement.
Decision: Convicted; Court emphasized intentional use of non-public information.
Sentence: Suspended sentence and restitution of profits.
Lesson: Intent and knowledge are critical; accidental trading without awareness of non-public status may not qualify.
Key Patterns Across Cases
Executives and employees are equally liable; responsibility depends on access to inside information.
Precision does not require certainty; realistic prospects suffice.
Indirect liability applies: Tipping to friends or family is prosecutable.
Corporate liability exists: Companies can be fined alongside individuals.
Sentences are mostly fines or suspended imprisonment, but reputational damage is severe.
Regulatory oversight (FIN-FSA) triggers many investigations even before courts get involved.
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