Ruling [CJEU] ¦ MAR: When Insider Lists Become Inside Information

Lessons from the Court of Justice on Market Abuse

The Court of Justice’s recent ruling in Case C‑363/24 clarifies a nuanced corner of the market abuse framework: a communication that someone has been added to an issuer’s insider list and is prohibited from selling can, under certain circumstances, amount to inside information. For practitioners, compliance officers and investigators in financial crime, the judgment sharpens how to assess disclosures, the required precision and credibility of information, and the interplay with legitimate contractual obligations to trade. This article explains the decision’s key points, why it matters for market abuse enforcement and internal controls, and practical steps to reduce legal and reputational risk.

What the Court decided

The Court examined whether an email informing a bank that a person had been placed on an issuer’s insider list and was prevented from selling shares could be “inside information” under Regulation (EU) No 596/2014. The message at issue did not explain the reason for the listing. The Court held that a mere statement that someone is on an insider list is, in principle, neutral and ordinarily not sufficiently precise to qualify as inside information. However, where the communication also states that the person is prevented from selling, or where the surrounding circumstances imply an adverse event affecting the issuer, that combined information can be sufficiently specific and credible to be regarded as inside information if a reasonable investor would likely use it when making investment decisions. The Court emphasized that the concept of inside information must be applied objectively: it is not decisive whether the issuer’s assessment of underlying circumstances was correct nor whether, in an ex post review, the information turned out to be inaccurate. What matters is whether, at the moment of disclosure, the information was credible and specific enough that an investor could reasonably rely on it and thus someone in possession of it would obtain an advantage over other market participants.

Why this matters for market abuse investigations

This ruling affects several investigative and compliance contours.

1. It widens the set of communications that can trigger insider dealing scrutiny: not only explicit leaks of planned transactions, financial data or corporate decisions but also signals about insider list placement combined with a sales prohibition or surrounding context implying material adverse events.
2. The decision reinforces that precision and credibility are fact-specific. Regulators and courts should look at the totality of circumstances – the exact wording, the identities and roles of sender and recipient, timing relative to other events, and any linked actions in the market.
3. The judgment clarifies that accuracy in hindsight is not determinative. An apparently incorrect communication may nonetheless have been credible when made and therefore capable of conferring an illicit advantage if acted upon.
4. The ruling reaffirms the relevance of Article 9 defences: transactions carried out to discharge pre-existing obligations in good faith may be lawful even when based on inside information; conversely, apparent contractual necessity will be scrutinized for illegitimate motives.

Bastian Schwind-Wagner _Follow

"The Court’s judgment highlights that even administrative-looking communications about insider list placements can be material when they include a sales prohibition or are conveyed in a context implying adverse events, and therefore may amount to inside information. This places greater responsibility on issuers and intermediaries to control wording, timing and distribution of such notices to avoid unintentionally creating tradable signals.

Compliance programs must therefore treat insider list handling as a potential market‑sensitive process, reinforcing access controls, recordkeeping and trade surveillance tied to such communications. Where trades follow contractual triggers, firms should document the objective necessity and good faith basis for those actions to reduce enforcement risk."

Key factual factors that will attract scrutiny

Investigators and compliance teams should pay particular attention to these factual elements when determining whether a communication may be inside information or whether subsequent trades constitute insider dealing:

• The content and specificity of the communication: a statement that someone is on an insider list plus an explicit sales prohibition or implication of adverse information is more likely to be precise.
• The credibility of the information at the moment it was disclosed: was the source reliable, and did the recipient have reason to believe the information was accurate or imminent?
• The role and position of the person named: communications about senior executives and major shareholders are more likely to be understood as material.
• Timing relative to market-sensitive events: e.g., market declines, pending disclosures, or corporate announcements that together create a plausible connection between the insider list notice and material adverse news.
• Market behaviour after receipt: while ex post price movement is not the only test, subsequent trading patterns and profits can be probative of whether an advantage was obtained.
• Contractual or legal obligations to trade: whether trades followed from pre-existing contractual triggers (and whether those obligations were genuine or pretextual).

Implications for compliance programs and internal controls

This ruling calls for a refinement of policies and practical procedures:

• Policies and training: Policies should explicitly cover communications about insider list status and sales prohibitions. Training must make staff aware that even seemingly administrative notices can be material if combined with a prohibition or adverse context.
• insider list governance: Companies should strictly control how insider lists are maintained and updated and ensure communications describing placements avoid unnecessary disclosure. When notifying counterparties or third parties, adopt templates and clearance processes to minimise ambiguous phrasing that could be interpreted as signalling material events.
• Channels and access controls: Limit distribution of any information that can be interpreted as indicating restricted trading status. Encrypt, watermark and track distribution of insider list updates. Maintain tight role-based access to lists and to internal communications about them.
• Trade surveillance and escalation: Expand surveillance rules to flag transactions coinciding with or immediately following insider list notifications or internal communications referencing sales prohibitions. Set up automatic escalation to compliance and legal teams for real-time review.
• Recordkeeping and provenance: Keep comprehensive logs that prove when and from whom any communication originated, and the exact timing of insider list updates. That evidence is critical where credibility and timing are determinative.

Handling suspicious trades where legitimate obligations exist

Article 9 provides defences when trades are necessitated by pre-existing contractual obligations or legal duties. But regulators will look closely at whether those obligations were “in good faith” and not crafted to circumvent the prohibition. Compliance teams should document the contractual basis for any forced or necessary trades, the timing of the contractual triggers, and contemporaneous decision-making records showing that trades were objectively required.

Investigative approach for enforcement and remediation

In cases where trading followed an insider list notice, investigators should build a timeline correlating the communication, insider list updates, the identity and capacity of recipients and actors, and market transactions. Key steps include forensic collection of emails and messaging apps, analysis of trading patterns, witness interviews to assess credibility and intent, and assessment of whether the recipient could reasonably infer an adverse event from the communication. Where breaches are found, remediation should combine disciplinary, regulatory reporting and process-fix measures – including revisiting contract terms that permit opportunistic liquidations following price movements.

Takeaways for banks, issuers and compliance officers

The judgment underscores that seemingly technical or administrative messages can carry materiality if they indicate that a named individual is barred from selling – a signal many investors will interpret as implying adverse, market-sensitive information. Firms must tighten controls over insider list handling and communications, broaden surveillance to include reaction to insider list notices, and maintain clear documentation when trades follow contractual triggers. For enforcement authorities, the decision offers a principled standard: focus on whether a reasonable investor would have used the communication in making investment decisions and whether the holder of the information thereby gained an advantage.

Conclusion

The Court’s ruling closes a legal gap and clarifies that notifications about insider list placements – especially those adding a prohibition on sales – can be inside information if they are sufficiently specific and credible to influence investment decisions. From a financial crime perspective, the judgment raises the bar for disciplined communication governance and more sophisticated surveillance of trades tied to insider list events. Firms that treat insider list updates as purely administrative will now face greater enforcement risk; the prudent response is to harden processes, document decisions, and ensure that any mandated trading driven by contractual triggers is transparent, well-documented and demonstrably in good faith.

Dive deeper

• EUR-Lex ¦ Case C‑363/24, Judgment of the Court (Fourth Chamber) of 19 March 2026. ¦ Link
• EUR-Lex ¦ Regulation (EU) No 596/2014 on market abuse (market abuse regulation, MAR) ¦ Link