“It’s a good time to buy shares”: Can Trump be accused of privileged information in the stock market? | Business

“It’s a good time to buy.” If this phrase is said by the neighborhood’s fruit bowl, it has no great relevance. But the thing changes if Donald Trump publishes in his social networks. The US president did it a few hours before postponing the entry into force of his controversial policy of tariffs for all, announced to hype and saucer the “day of liberation” and that stained red the world bags red during several sessions. However, after confirming the tariff postponement, the rebound and the quotes arrived. If someone followed the president’s advice and bought actions at the lowest, he could have obtained numerous profits. The controversy – another more – was served: some accused Trump of using privileged information, a practice pursued by supervisors and that in Spain can be criminal.

The crime of abuse of privileged information is complex to prove. According to the Criminal Code, this criminal type occurs in three cases: when the chivatazo is used to buy or sell shares and the benefit to third parties exceeds half a million euros; when the transaction is done with financial instruments that are worth more than two million euros; and when it causes a serious impact on market integrity.

But what is privileged information? The definition is given by the Law of Securities Markets and the Supreme Court has reiterated, as Remember Enrique Remón, a CMS albiñana & Suárez de Lezo procedural partner: it must not be public, it must have a direct relationship with a specific financial instrument and must be able to significantly influence the market when published, making a value rise or fall in a considerable percentage. “A tweet that says is a good time to buy, published by the US president for everyone, it is not a secret. The law points more to other operations, mergers or an OPA,” says the expert.

This coincides with Ignacio Martínez-Arrieta, criminal of the Office Gómez de Liaño & Márquez de Prado. “If it were in Spain, it is questionable that I had committed a crime. Trump has not taken measures on the value of concrete actions, but about the delay in the application of tariffs, which is not information about a specific company,” he says. “A typical case is that of a manager who knows the losses of his company before the annual accounts are published and recommends that their relatives sell the actions,” says José María de Pablo, a criminal partner of the MORE and Calvet criminal.

In addition, there are few convictions. “The criminal jurisprudence indicates that the convictions are more for indications than for evidence of charge and the link with the person who does the operation must be proven. If someone agrees to information by their profession in banking, for example, the entities usually restrict that the relatives of the workers perform some operations, so they usually decide it to third parties,” says Bert compliance of Magán. But ambition is usually the weak point. “If anyone knows of an operation and his brother or his uncle buys a large number of actions, that jumps in the market,” he warns.

Talk about more

When the beneficiary speaks of more and boasts of a “ball” with his circle, there may be complaints. “Except that the recipient of the information cante, is difficult to test. The recommendations are verbal and leave no trace,” says José María de Pablo. To this are added other complexities. “There is no clear notion about what it is to cause a serious impact on market integrity and you have to go to the specific fact,” says Ignacio Martínez-Arrieta.

It must be proven that there has been an agreement among those investigated. “The privileged information is known by one and used by third parties to take advantage of it. The difficult thing is to prove the collusion between who knows and those who buy or sell assets before that operation is published,” says Enrique Remón. In addition to kinship or friendship ties, there are cases that arouse suspicions: an unleaded person who suddenly invests 100,000 euros in a quoted the day before an OPA.

Companies may also have criminal responsibility, the specialists confirm, although it is not automatic or direct when an employee has a crime. Banks, insurers, investment signatures or law firm that advise high voltage operations are usually more exposed to a worker incurred in privileged information. How do you manage this risk? With the design of solid criminal prevention plans. They usually include confidentiality clauses, as well as the obligation to communicate the investments made by their direct relatives or to deliver periodic information about their assets and assets. “Having a good crime prevention manual with solid measures in companies more sensitive to possible cases of abuse of privileged information can prevent the legal person from being convicted if any of its employees or managers have committed this crime,” explains Berta Viqueira. However, the company must benefit from that action to be considered responsible.

Therefore, if Donald Trump had recommended buying stock shares in Spain a few hours before taking a turn to his tariff policy, as he did in his country, he would be unscathed. But the markets do not usually forget the consequences of these economic scares and fluctuations and have penalized it in terms of investors’ confidence after the infarction days that the half -world bags lived.