Public health emergency and insider trading in the corporate sector

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Abstract

As governments in different parts of the world seek solutions to the public health emergency created by the COVID-19 pandemic and the impacts on corporate enterprises, different steering committees are constituted to implement measures aimed at containing the spread of the disease. Information that has the potential to impact materially on companies’ securities when made public is shared among committee members in the course of their deliberations. That realization informs the purpose of this paper which is to explore through doctrinal research method the law on insider trading in South Africa in such a manner as would reaffirm the position of the law on insider, inside information, and the prohibited conducts. The findings indicate a propensity by those entrusted with business information to leverage such information for personal benefits which creates a problem of uncertainties on the integrity of the securities market. The paper concludes by advocating the application of the law in such a manner as would ensure that the conduct of persons entrusted with inside information is guided by the legal threshold on insider trading.

Keywords: COVID-19, Public Health Emergency, Insider, Inside Information, Company, Securities

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: H51, L51, O16, P46

Received: 07.05.2021
Accepted: 09.09.2021
Published online: 13.09.2021

How to cite this paper: Nwafor, A. O. (2021). Public health emergency and insider trading in the corporate sector. Journal of Governance & Regulation, 10(4), 104–112. https://doi.org/10.22495/jgrv10i4art9