INTERNATIONAL UNIVERSITY OF RABAT

SCHOOL OF LAW
FROM RABAT

Theme: Market abuses

MASTER'S THESIS
JUNE 2022

THESIS SUPERVISOR:

Benjelloun Omar
[Link]@[Link]

1
 Acknowledgments:

I extend my heartfelt thanks to

Mrs. Tania Zittoun,

Director of this thesis,
For his follow-up and his valuable advice.
Mrs. Janine Dahinden,
For having accepted the expertise of this

memory.
All participants,
for the trust they have given me and
For their sincerity.
To the services working with the
migrants
For the contacts they gave me.
Nicolas,
For her patient proofreading and for her
support until the end.
Francesca and Giulia,
For rich exchanges and moments
shared during this university journey.
My friends,
For their presence, their listening and their

smiles.
My family,
For the encouragements throughout
my studies and their love.

2
Table of Contents:

3
 1. Introduction :

Like any market, financial markets are the place where buyers and sellers
negotiating. Furthermore, as in any market, the purchase and sale prices are determined by the
level of supply and demand. This exchange concerns products or instruments
financiers.
A seller or an agent in need of cash, referred to as a financing-needy agent,
is generally a business or a country looking for liquidity to finance its
development projects.
Buyers or liquidity surplus agents, known as agents with a capacity of
financing, usually are savers or investors looking to invest
in corporate or national projects by taking out loans or by becoming
partners.
On this market, investors contribute to the financing of countries and companies by
placing their savings. The financial instruments that formalize this investment are
referred to as securities or financial instruments.

Transactions on securities are conducted over-the-counter, that is to say in organized places called
exchanges. The Stock Exchange is a regulated and structured marketplace where are
negotiated securities. The management of this market is entrusted to a private company, named
Casablanca Stock Exchange Management Company, according to the standards. It is notably responsible for
to organize the pricing meetings, to pilot the IPO process and to
ensure the successful completion of operations.

To ensure effective management of public procurement and effective competition among the
candidates, Article 1 of the public procurement law establishes three principles: the freedom of
participate in public procurement, the equal treatment of candidates and transparency of
procedures.
The principle of freedom of access to public procurement grants every institution the right to
apply for the award of a contract. The objective of this principle is to promote a deployment in
undeniable concurrence. It is implemented through advertising, offering everyone
providers who wish for free access to public markets. However, the prohibition of
Bidding is an exception to the principle.
The principle of equal treatment of candidates stems from the general legal principle according to
where all citizens are equal before the law. This means that all applicants of order
the public must receive the same treatment, the same information, and participate according to
same competition rules. Likewise, all operators must be on an equal footing.
whatever the stage of the procurement process. However, there are exceptions to
this principle (priority, retention contracts, measures in favor of SMEs within the framework of the law
on public contracts).
The concept of transparency means that every public procurement project must be disclosed to
in advance. And the buyer must provide an appropriate level of advertising to all candidates. This
promotes free competition and fairness in the process. This principle is also emphasized in

4
work through the development of advisory rules and standards. It should be noted that this
is required at all stages of the procedure (at the beginning of the contract, during the award of the
market, downstream of the procedure.

All contracting authorities adhere to these three principles within the framework of the process of
public procurement and authorization of public services.
The proper functioning of financial markets and public trust are conditions
prerequisites for economic growth and sustainable wealth. Market abuses undermine
the integrity of financial markets and public trust in the trading of securities
financial and derivative products. The concept of market abuse encompasses all behavior
illicit on financial markets and there are several types of abuses including:
"Front-running" refers to the practice of brokers placing orders for their own account before executing orders for their clients.

clean accounts before their clients' orders, potentially making a profit when
customers place an order in the opposite direction. It will be easier to operate if the
The order is important and placed "at best", meaning that there is no price limit.
For example, if a client sends their broker an order to buy 400,000 shares of a
particular action, the broker may delay the sending of this order to the market and pre-execute
the purchase of 25,000 shares on the market, for example. Smaller orders will be executed at
proximity to the last executed price, while larger client orders will lead to
a rise in the market. The broker will be able to sell 25,000 of his shares at a price close to
customer price, which will result in a value added.
Deceptive activity on a title
The two techniques are designed to create a misleading impression of the activity of
titles, potentially encouraging other investors to take an interest and leading them to
driving up prices by placing buy orders. "buy/sell" (or "wash trading") is
abusive if it does not lead to a change of ownership and is not tax-incentive. The orders
those who do not intend to see their executions can also deceive others
investors as they are taken into account in the order book.

These manipulation risks particularly concern illiquid securities or those listed at a price;
for example, when orders are placed at the best price on listed securities, then canceled
In the last minutes before class, a suspicion of market abuse.
Abuse of dominant position
When a participant holds a relative share of this financial instrument, they establish a
dominant position in the stock market or in the derivatives market in order to
to impose its price on the rest of the market.

Generally, the stock market is subject to cross-border reporting rules.

But this rule is declarative. However, escaping this claim by taking a position.
Above this threshold through a parent company is an offense of market abuse.

5
The world of stock markets is organized, reliable, and rapidly evolving. This organization
is the result of exchanges between the different key players. Investors will always have to
consider the actions of these protagonists. Moreover, regardless of the market that interests the
investors, we always find the same major players. All these players are, in
some sort of 'the soul of the market', without which there would be neither supply, nor demand, nor markets
financiers. They are necessary for the functioning of global markets and operations
of the global economy.
The actors of the stock markets
First, of course, the major financial institutions.
Among them, the central bank is the main player. They are well known because they are at
the origin of many stock market movements. In Europe, the institution that manages the markets and
The economy is called the ECB (European Central Bank).
Investment banks are also major players. Some companies are
became very famous after the 2008 crisis, such as Goldman Sachs, Lehman Brothers or the
French Natixis. The major institutions also include investors
institutional (such as UCITS, insurance companies, etc.) or companies of
management.
Secondly, we find companies. They are indeed the heart of the markets.
financiers. It is their issuance of securities that feeds the bulk of supply and demand.
Finally, there are individual investors, who do not belong to the first two.
categories.

The interests and goals of these actors vary, but to some extent, they are all
interconnected and complementary.
THE ACTORS OF THE FINANCIAL MARKET IN MOROCCO

The Casablanca Stock Exchange

The management of the Casablanca Stock Exchange is entrusted to a public limited company called
the Casablanca Stock Exchange (CSE). The capital of the managing company of the exchange
is fully subscribed by the approved brokerage firms, it is held at all times
equally by all brokerage firms. Its mission revolves around the points
following:
• pronounce the introduction of securities to the stock exchange and their
radiation; • Organize rating sessions through an electronic system;
• ensure compliance of operations carried out by Brokerage Firms;
to bring to the attention of the Regulatory Council of Securities any infringement
that she will have raised in the performance of her mission.

2. Brokerage firms

6
 Brokerage firms are the only entities authorized to directly conduct the business.
of intermediation and negotiation on the stock exchange. Brokerage firms benefit from a
monopoly of negotiation of securities listed on the stock exchange. The
The creation of a brokerage firm is subject to authorization from the Ministry of Finance.
Furthermore, before starting its activity, any brokerage firm must present
sufficient guarantees from an organizational, technical, and financial point of view. The
The capital of the brokerage company must be at least 1.5 million Dirhams.
when his activity concerns the execution of stock operations; he must be
greater than 5 million dirhams when it also takes care of the custody of the titles and the
counterparty. Brokerage firms have the role:
to carry out stock market operations;
to place the securities issued by legal entities making a public appeal for savings;
to ensure the custody of the titles;
to undertake customer outreach (for the acquisition of values
real estate companies); Transactions made through brokerage firms
result in the payment of commissions by the seller and the buyer in favor of the
management company.

3. The Ethical Council of Securities Values

The Council of Ethical Standards for Securities (CDVM) is a public institution
surveillance and control of stock market operators. Its main missions are to:
protect the savings invested in securities or other investments following a call
public to savings; ensure compliance with the law by financial intermediaries (companies
of stock exchange, banks, and investment funds). Informing investors by issuing a visa to
information notes that are made available to the public. These notes are published
when there is a public offering of securities, (initial public offering, issuance of securities
financial, capital increase...); process the approval requests of SICAVs and
mutual funds (MF).
4. The banks

Banks do not have direct access to the stock market. Their

intervention in the field of securities is centered around conservation of
securities and the collection of client orders to route them to the
brokerage firms.

Maroclear

Moroccoclear or Central Depository is responsible for:

1. carry out all acts of conservation appropriate to the nature and form of the titles that belong to him/her
are entrusted (action, obligations, ...);

7
 2. manage the current accounts of securities opened in its name
affiliated (banks, issuers, brokerage firms and UCITS)

3. exercise controls over the maintenance of the securities accounting of banks and companies
of the stock exchange.

6. Collective Investment Schemes in Securities (CIS)

For the small saver who wants to invest in the stock market and has no idea about
values to buy or sell, it is advised to invest his money in what one
call a collective investment scheme in transferable securities (UCITS). The
UCITS are created for the following reasons: to ensure risk diversification.
inherent to securities for better portfolio management, especially
those individuals who do not have an in-depth knowledge of the different
stock markets; relieve savers of concerns related to the complexity of monitoring
securities; offer products that allow for benefits
fiscal. The UCITS are composed of:
Investment Companies with Variable Capital (S.I.C.A.V);
Mutual Funds (F.C.P).
UCITS are divided into four types:
the equity mutual funds.
the bond UCITS;
diversified UCITS;
money market mutual funds;
It should be noted that diversified UCITS aim to acquire a portfolio,
important on different types of securities in order to diversify the risk.

Insider trading:

Insider trading remains one of the emblematic offenses of crime in

white collar. It concerns not only company executives and people who
in the course of their duties have access to privileged information, but also
any person who exploits such information, provided that they are aware of it
privileged character.
Insider trading is governed by Dahir No. 1-13-21 of 2013 promulgating
Law No. 43/12 relating to the Moroccan Capital Markets Authority
who has
amended the old law of 1993 relating to the ethical council of values
securities and the information required from legal entities making a public appeal to
savings. It turns out that the intervention of the legislator for the implementation of
the implementation of a repressive mechanism in this area embodies the foundation of a possibility
the establishment of an autonomous special criminal law. Moreover, the very idea of
The application of criminal law in stock market matters is the subject of controversy in the
measure where opponents see in its intervention a brake on investment and
hinders the normal course of the market, while supporters congratulate and insist on it.
for it is the only way to prevent and punish any violation of the laws

8
scholarships.

The study of this subject has a double interest: Regarding the theoretical interest, it
resides in the fact that the establishment of a repressive system in this matter embodies
the foundation of a possibility of establishing an autonomous special criminal law.
As for the practical interest, it can be explained by the fact that stock market offenses do not
they threaten not only individual interests, but the very structure of the State and,
more broadly, that of the market, as it calls into question public trust in the
economic and social financial system. In other words, the incrimination of the offense
Insider trading aims to ensure the transparency of stock markets and equality of
investors in these markets. Hence the reason to question the impact of this
infraction on the financial market.

The objectification of insider trading In this context, it is first necessary to clarify the basis.
economic aspects of insider trading, and then we will explain its legal basis.

The financial loss

The meeting of the elements constituting the offense of insider trading undermines
principle of equal treatment of investors in relation to information as in the past
city. This alteration causes financial harm to the injured party. The establishment of
The civil party regarding stock market offenses is rare in case law.
First of all, the victims are not always aware of the harm they suffer.
are suffered at the moment it occurs. Then, the assessment of these damages is not
not easy.
It is important to first focus on the conditions for the implementation of the
civil liability, and secondly on the compensation for the damage caused.

The privileged use of information by investors is a market abuse.

triple penalty (administrative, criminal and mediation). It's a small subject
of exploration in Morocco that we will compare to the French stock market. While
informing about various abuses in the market...
There is reason to doubt the impact of this offense on the financial market.
This leads us to ask the question: to what extent is crime?
Insider trading undermines the fundamentals that govern the financial market?
What are the sanctions imposed by market regulators and judges?
Why does the media sanction seem to be the most feared?

I: Insider trading: a crime that violates market principles

scholarship recipient

a. Constitutive elements of insider trading:

9
Material element:
The description of the crime includes two elements.

First of all, you need insider information. This is defined by the

jurisprudence as 'accurate, confidential information that can influence the
the course of a title" (Crim. June 14, 2006, no. made by the one who receives it and uses it, but must be
appreciated objectively, to the exclusion of any arbitrariness and solely based on their content
(Crimea. June 26, 1995, No. 93-81 646).
The information had to be used, that is to say that the bearer had used it. The use
information can be for oneself or for others, directly or indirectly. It is about
to carry out one or more transactions, to cancel or modify one or more orders
went through an insider before acquiring privileged information.
The communication of this information to third parties is also sanctioned by Article L.
465-3 of the monetary and financial code.
It should be noted, however, that for a person to hold insider information does not
does not constitute insider trading within the meaning of article L. 465-1 I, B of the monetary and
finances.

Intentional element:
Insider trading is a voluntary violation.

Legal element:
The legal element is Article L. 465-1 of the monetary and financial code: this offense is against
the illegal use of insider information by a person who has access to it
privileged information in a professional capacity.

The 'insiders' are those who can hold confidential information on a title
professional. These are natural persons (corporate officers), but also persons
morals.

The people concerned by this article are:

The company executives or anyone using or not using third-party communications,

privileged information in the exercise of their authority;
Any person/third party who uses and disseminates it, except for the aforementioned.

b. The delicate construction of evidence:

10
In case of unusual circumstances, complaints or requests from foreign authorities, the
The Secretary General of the AMF decides to open an investigation and mandates a duo.
investigators to choose from 30 investigators working at the AMF. One third came from the sector
public (judges and lawyers, executives of the Bank of France, tax inspectors, police,
etc.) and two thirds of the private sector (lawyers, auditors, professionals of
markets, scientists, etc.). They analyze bank and phone records,
recordings from the trading room... then summon suspects and witnesses during hearings
which can last one or two hours. This is not police custody: the individuals are not
obliged to come or stay, but can be sanctioned for hindrance to the proper
conduct of an investigation.
Beyond the frequent international repercussions, the greatest difficulty of insider trading
is to never confess," emphasizes Sophie Baranger. "We must build a set
indices to show that market intervention can only be explained by the
possession of information.
After an average of two years of investigation, the inspectors submit their reports to the college of
the AMF which decides on the follow-up actions. Of the 68 investigations closed in 2014, 41 had to be
excluded from the jurisdiction of the foreign authority, 9 have been classified without follow-up, 12 have been
noted with observation letters and 10 have been subject to an appeal in the first instance
before sanctions. the 'sanction commission for magistrates' of the AMF. For a year, one
members commented on the case.
Thus, three years later, all the parties involved gathered in a public meeting:
involved parties, investigators, representatives of the academy... everyone argued over the grievances
and the sanctions that the committee should impose. A month later, she made her decision
public. In 2014, it issued 79 fines ranging from 5,000 euros to 8 million euros,
for a total of nearly 33 million euros. Thirteen were sanctioned simultaneously (3
definitive prohibitions to practice, 5 temporary prohibitions, 4 reprimands and 1 warning.

B: THE HARM IN MATTERS OF OFFENSE OR FAILURE OF A PERSON IN A POSITION OF TRUST:

[Link] and sanction:

To obtain the means to combat crime, the damage caused by the

prohibited behavior must still exist 6. From an economic point of view, referring to
to Becker's model (1968) and the developments of Polinsky and Shavell (2000 and 2007), the
The benefits of deterrence rely on the reduction of negative externalities generated by
certain actions. However, regarding insider trading, the question of whether there
The damages is controversial. Let's start with the argument that insider trading does not
do no harm. The main argument is that financial markets are impersonal. In
In other words, uninformed investors may or may not buy insider securities.

11
For example, let's assume a transaction took place the day before the disclosure of information that
had a negative impact on the value course.
Investors incur losses, while sellers (insiders or not) avoid
losses. There is no reason to believe that the investor has suffered any harm in
direct consequence of insider trading, as he could have bought shares from non-insiders.
Another way to say it is that information flows through market exchanges.
financiers, who influence prices. Moreover, exchanges with insiders will improve
the efficiency of market information through their choice to sell or buy. Manna
(1966) also sees insider trading as a means for business leaders to compensate
seven 'managers'. If the existence of damage directly caused by insider trading is
controversial, the existence of harm to society as a whole has been demonstrated
theoretically and empirically by numerous authors.
Thus, Fishman and Hagerty (1992) show that, under certain conditions, insider trading can
reduce the informational efficiency of stock markets by distorting the dissemination of
the information and reducing the incentives for traders (uninformed) to obtain this
Information. Manove (1989) identified a problem of adverse selection with insider trading.
There is an information asymmetry between informed and uninformed investors.
uninformed investors must take into account the risk that the stock price is overvalued,
for example if they are considering a purchase. Informed and misinformed investors will be ready to
pay a lower price for the stock. Therefore, financing on the markets
financing is more expensive for companies (Akerlof, 1970). In other words, the offense
Insider trading affects the normal functioning of financial markets.
In addition, the regulation of insider trading can mitigate adverse selection issues.
and reduce the cost of capital. Several empirical articles have provided results in this
meaning, notably Easley and O'Hara (2004), Beny (2005) and Fernandes and Ferreira (2009).
Different approaches to regulating insider trading are discussed later in this
article.

Theories of detection and repression of public execution aim to maximize the

social welfare, that is to say the sum of the utilities of the individuals that make up society,
whether they obey the law or not (Polinsky and Shavell, 2000 and 2007; Langras and Obizins). base,
2017). This goal 10 allows for the definition of a 'socially' optimal management policy.
activities generating negative externalities.
In our case, insider trading generates profits (for those who engage in it), but creates some
negative externalities (harms, defined in part 1), and the cost of detection/sanction
the level of this activity is high. We choose the analysis grid 12 proposed by this theory
to analyze the effectiveness of the repression of insider trading. One of the main reasons for
The role of the AMF in the fight against stock market irregularities is its expertise on subjects.
complex and innovative. So, in theory, this expertise could facilitate the detection of the
financial delinquency in the stock market. If we refer to the figures from the commission's decisions.
sanctions from the AMF for 201613, the sanctions commission made 16 decisions
(leading to the pronouncement of 32 sanctions) For the professionals placed under their authority, or
for anyone who has violated or attempted to violate the regulations concerning abuses of

12
market. 21% of the violations were internal violations. This figure is difficult to
interpret. To understand the probability of detection, it is necessary to know the
number of violations that actually occurred. Furthermore, the AMF has the authority to impose
substantial fines. Law No. 2010-1249 of October 22, 2010, relating to monitoring
banking and financial has significantly raised the ceiling on monetary sanctions. Thus, the
professionals regulated by the AMF, such as investment service providers or
management companies risk up to 100 million Australian dollars or ten times the
amount of profits made, regardless of the nature of the alleged conduct. The law of the 9
December 2016 provides for penalties of up to 15% of the total annual revenue of the
legal entity sanctioned. For a natural person authorized or acting for the
account of a professional, up to 15 million Australian dollars or ten times any profit if
she is accused of market abuse. In 2016, according to the annual report of the AMF, 32 sanctions
financial amounts ranged from 5,000 euros to 2,000,000 euros, for a total amount of 9,725,000
euros distributed among 17 legal entities and 15 individuals." However, the extent
The sums at stake should not overshadow two essential elements of Becker's model.
(1968) in its simplest version. The decision of an individual to commit a crime
depends on the expected benefit of the expected fine (Garoupa, 1997; Polinsky and Shavell, 2000).
Let's take an example of numbers. Suppose the penalty is equal to ten times the gain. If the
the probability of detection is less than 0.10, the net benefit of the offense should be positive.
In this case, individuals neutral to the risk would not be prevented from committing an offense.
insider (if they had the opportunity) due to the penalty for gains exceeding
expectations. It is easy to understand that when the probability of discovering a crime is
close to zero, the temptation to commit insider trading is greater, and thus the fine
the expected value is lower. Therefore, when the detection probability is low,
the fine must far outweigh the advantages of insider trading. Furthermore, the threat
The penalties depend on the time between the commission of the fraud and the sanctions.
in fact, individuals are generally considered to be less weighted (in terms of utility)
for future income rather than current income. They show a preference for the
present, which can depend more or less on the individual. Thus, the more the decision to sanction is
far from the potential crime, the less significant the perverse effect of the fine is, which reduces
strongly the deterrent nature of the sanction. It is an argument in favor of longer deadlines.
courts, a goal that can be more easily achieved by an authority that reduces the
procedural constraints.

[Link] repair of the damage:

Victims are generally reassured when their lawyers respond that the
damage is not a legal notion but an economic one, and they are better equipped for the
determine. If France is a strong leader in the stock market, especially in the process of
sanctions, the remedy is still ignored. The case law has taken a rather clear stance.
The judgment of March 9, 2010 determined that only the "missed opportunity" could be invoked,
but this matter has only sketched the theme. The answers to these questions remain
from the most detailed economic analysis possible, determining as precisely as possible the
real damage" rather than "the estimation" of damage based on legal rules sometimes
inappropriate. The concept of "missed opportunity" is certainly very useful and very clever, but it has
was invented to calculate the incommensurable and we must not forget that the goal must always

13
to get as close as possible to the truth. In securities law, judges
focus more on causality than on damages. That is why we prefer
replace the traditional 'fault/damage/causation' with 'fault/causation/damage'. Between
the company and its shareholders: should the shareholder be considered a third party
the company or, conversely, is it part of it? Victims of market abuse can sue
two perpetrators. The individual responsible for the market abuse is the manager.
He is the most obvious applicant, but he is not necessarily the first person to turn to.
where aggrieved investors turn, especially if they are numerous, because it is not
necessarily the most solvent. It is also possible to pursue individuals
morality, that is to say, the issuer himself. In fact, the insider trading regime is
intrinsically pejorative. This particularity stems from the broadening of the conditions
civil disputes of insider trading, which serves the so-called management of public financial order.
The expansion of the conditions for initiating civil proceedings for insider trading strengthens
the necessity of transparency principles. Through this question, securities law grants
a merchant advantage and therefore a value higher than the principle of transparency.

So, how do you obtain compensation? The current French system offers two
main remedies: civil proceedings and criminal proceedings. The civil route requires proof of failure,
of causality, the aforementioned damages. The production of evidence is complex and
requires investigative tools that are much more difficult to implement in the
civil procedures if they are not reserved for criminal procedures. In trials
criminals, the difficulty no longer lies in establishing evidence. On the other hand, because
the direction of the trial is delegated to public conduct, the plaintiff is somewhat
excluded from the trial, he no longer controls her. As a civil party, he can receive compensation.
at the end of the procedure if necessary, but it only intervenes as a subsidiary. The objective
The main purpose of this procedure is not to compensate victims of market abuse.

II: Insider trading, a nearly unpunished market abuse?

A. The specifics of the penalty regime for insider trading:

a. Should insider trading be prohibited?

Insider trading involves a person trading on the stock market using information
confidential information it holds before the action becomes public.

In practice, insider trading includes stock market operations, regardless of their nature.
(purchase, exchange, options exercise), aimed at making a profit or avoiding a loss. This
Fraud can be carried out directly or through an intermediary, but in any case before that
the information is not to be made public (confidential information must be utilized beforehand
so that the public does not know it.

14
Such behavior is illegal and punishable by criminal law and aims to deregulate the
market characterized by anticompetitive behavior.
So the law distinguishes between direct insider trading and indirect insider trading.

Direct insider trading:

This is a problem concerning influential members of large companies (CEOs, CFOs,
members of the board of directors or executive committees, etc.): the presumption of
startup applies. Specifically, it is prohibited for these people to operate on the stock market because they
are supposed to hold information not known to the public, which gives them a
advantage that the principles of fair competition do not allow. Company titles that they
manage and titles of other companies in which they hold shares.
Indirect insider trading:
It concerns all those who have the potential to obtain information through the feature.
that they possess and can use for personal and abusive purposes for gain
illegal. This crime specifically targets employees of banks or brokerage firms, the
liquidators of companies, and even lawyers.

b: the repression of insider trading:

When we talk about repression, we refer to the sanction applicable to suppress such or such.
behavior. In relation to our theme, it concerns insider trading, which we will discuss
analyze the repression reserved by the Moroccan legislator for offenders, as well as the body
tasked with imposing this sanction, without forgetting to focus on what exists in the systems
compared legal systems. Within the Moroccan legal order, the sanction for insider trading falls under the
Articles 42 and 43 of law 43-12 relating to the AMMC. We will classify the sanctions according to the
acts committed and according to the quality of the insider. Indeed, Article 42 in its first paragraph speaks of the
primary insiders, who use privileged information to knowingly execute or enable
Carrying out one or more operations on the Market will be punished with three months of imprisonment.
up to two years, and a fine that can reach five times the profit potentially made, without
that it may be less than 200,000 MAD, or of one of these two penalties only. It is the same
Similarly for secondary initiates. However, tertiary initiates are punished in the same way.
worries that the primaries and secondaries, within the framework of the implementation or permission of
to carry out one or more transactions on the market using privileged information
knowledge of cause. Furthermore, communication by any person to a third party outside of
Receiving privileged information in the normal course of their profession or function is penalized.
by imprisonment from three months to one year, and a fine of 20,000 MAD to 100,000 MAD
However, within the framework of comparative law, insider trading is penalized in France by
Article L.465-1 of the Monetary and Financial Code provides for five years of imprisonment and a fine of 100 million.
of euros in fines, this amount can be increased up to ten times the amount of the benefit
removed from the offense, without the fine being less than this advantage, for all cases that it
whether primary, secondary, or tertiary offenders. However, these penalties are liable to be
aggravated or requalified, for example, as terrorism in cases where insider trading has been committed
intentionally in connection with an individual or collective business whose purpose is to
seriously disturb public order by intimidation or terror.
In summary, and as a conclusion, it should be said that the offense of insider trading is a
complex infraction, which hinders the financial market. The latter is governed by principles
major, leaving an important place for its effectiveness. It is about transparency, equality, and
of the ethics, whose respect contributes to the promotion of said market. While by the

15
insider trading operations open the field to its alteration and degradation. It is true that these
operations have been the subject of several debates across all the legislations of the world such as
We have just clarified the treatment of our text. However, this debate ended with
the prohibition of these operations. This ban is justified by a major interest which is that of
financial market, this is how imposing sanctions for this offense meets the requirements of the order
public financier. Indeed, since insider trading can only occur in the markets
scholarships, and only concerns information that influences the prices of financial instruments,
The ethics of financial markets is therefore also affected and called into question.

SrcUnable to access the content at the provided URL.

B: The prevention of insider trading:

a. The obligations incumbent upon issuers:

Provide the public with accurate and sincere information:
Article AMF 223-1 states that the information provided to the public must be
exact, precise and sincere.

Obligation to disclose any privileged information:

Issuers must make all information known to the public as soon as possible.
deadlines
Privileges (Article 223-2 of the AMF's General Regulation).
when the sender or a person acting on its behalf or for its account,
to communicate privileged information to third parties in the normal course of work,
his occupation or function, he ensures that, in accordance with the
Article 221-3 (Effective and complete dissemination of information on its website) or
At the same time, in case of intentional communication, or in case of prompt
involuntary communication. These provisions do not apply to individuals
The person who receives the information is bound by a confidentiality obligation, that is to say
Whether legislative, regulatory, statutory or contractual (article 223-3 of the Regulation)
General AMF.
any important change regarding publicly disclosed insider information
Must be disclosed in the same terms as those originally published
(article 223-5 of the general regulation of the AMF).

any person preparing financial transactions for their own account

Significantly affect the prices or the positions and rights on the instruments
financiers

16
The holder of the financial instrument must provide the
Expose the characteristics of this operation. However, if confidentiality
Temporary need to complete the transaction, if it can be recorded.
This is kept secret, this person may be responsible for delaying the release
(article 223-6 of the general regulation of the AMF).

When a person is tempted to publicly declare their intentions,

Subsequently, he no longer forced her to wear the
Inform the public of its new intentions without delay (Article 223-7 of the Regulation)
General AMF.
The means to be implemented
In order to ensure the confidentiality of the information, the issuer must:

1) put in place effective measures to prevent access to this information to

persons other than those who need it to carry out their duties within
the issuing company;
2) take the necessary measures to ensure that anyone with access to this
information knows the legal and regulatory obligations related to this access and is warned
penalties provided in case of improper use or dissemination of this information;
3) implement the necessary measures allowing for the immediate publication of this
information in the event that he was unable to ensure his confidentiality.
SrcUnable to access the content of the provided URL.

Issuer's obligation not to intervene with its specific titles during a period
specific
Issuers must avoid trading their own securities:
1) Know within the company the privileged information and the date on which it was
made public;
In the fifteen days preceding its calculation date
Consolidated annual accounts, failing that, its annual social accounts, and its

Temporary public (semi-annual, quarterly if applicable).

The application of these provisions may be excluded from the implementation of the practice.

Market access is allowed if the decision to accept the practice permits it (article
631-6 of the general provisions of the AMF.

17
 b. Company practices regarding the prevention of insider trading:
Strictly apply the principle of disclosure of privileged information in the
best deadlines:
To limit the risk of preferential information flow, it is recommended to reduce all
the processing time Non-essential publications. We remind you that the press release
Press releases must be outside of trading hours.
Examples of deadlines that can be reduced:
Delay between the accounting committee meeting and the audit committee meeting to be published
press release;
The time frame between the date of signing the main contract and the date of signing the contract.
announcement;

Observe the time between changes (upwards or downwards) in relation to

announced and/or anticipated forecasts, and dissemination of information;
Definition of privacy rules:
Recommendations based on size and organization
Company, for:
Define who among the people should have access to privileged information;
Limit the number of people accessing privileged information, for example,
restrict access to the server;
Ensure the confidentiality of paper and electronic documents (destruction, archiving, codes
access, etc.) ;
Systematically include a clause referencing confidentiality obligations.
and waivers in contracts or agreements with a partner or a provider to which the
confidential information may be disclosed.
These rules apply permanently to the company's staff and during operations.
occasional on a case-by-case basis (e.g. Give a code name to the operation...)

Definition of 'negative windows'

In addition to the legal withdrawal period, it is recommended to provide
Negative Window
of which operations on securities are not authorized in the company.
The most common delay is now 30 calendar days and annual accounts and
pre-publication semester 15 calendar days before the publication of information
Quarterly, if applicable.

18
This depends on each company, its industry, and its internal organization (e.g.
reporting deadlines, consolidation scope, etc.) to determine and justify the duration of the
window, if applicable, the reasons for its choice.
Appointment of an ethicist:
It is recommended that companies decide freely depending on their context; in any case
Of course, this consultation can neither be mandatory nor binding.

CONCLUSION :

Insider trading arises from a violation of the equal information of investors and establishes
privileges for certain categories of investors known as 'insiders'. Thus, anyone, within
the exercise of his profession or function would have privileged information and
would use this information to carry out or knowingly allow execution in the market,
directly or through one or more intermediaries, commits insider trading.

Constitutes insider trading and, with full knowledge of the facts, acts directly or
indirectly one or more transactions or cancels or modifies for himself or for
others for a person holding insider information, thereby exploiting the information
privileged for one or more orders placed by the issuer or the related financial instrument

19