The Economic Crimes Law replaces the crimes and penalties that the Securities Market Law originally established, replacing it with a broader, stricter and more schematic catalog.
In the context of the entry into force of the Economic Crimes Law (LDE), it is important to bear in mind that there are a series of conducts related to the securities market that now acquire the category of “first category economic crimes” and, consequently, are subject to the rules and penalties provided by the new regulation.
Thus, the LDE replaces the crimes and penalties originally established by the Securities Market Law (LMV) with a new, broader, stricter and more schematic catalog.
This includes crimes related to misrepresentation to the market, to the Financial Market Commission (CMF), obstruction to the CMF, stock market manipulation, fraudulent acquisition of shares without making a public offering of shares, carrying out operations in the stock market without authorization and improper use of securities in custody, among others.
In this opportunity, we will focus on the crimes related to the use and disclosure of privileged information in the context of the securities market, which criminalizes any of the following three assumptions:
- Insider trading.
- Improper disclosure of inside information.
- Recommendation of an insider trading transaction.
Thus, the most relevant new elements in relation to this crime, which were not contemplated in the previous version of the LMV, are as follows:
- It imposes a higher degree of control and responsibility on the obliged subject, being obliged to ensure that his subordinates and third party collaborators are also subject to the duty of confidentiality and the lawful use of privileged information.
- It is not a requirement to obtain a pecuniary benefit or avoid a loss to configure the crime of insider trading, in such a way that for the commission of the crime it is sufficient to carry out the conduct.
- The type of persons with respect to whom it is presumed that they possess insider information is extended to include spouses, civil partners, cohabitants and persons who live in the same domicile as directors, managers, administrators, main executives and liquidators of the issuer or of the institutional investor.
Finally, it is important to point out that the penalties with which the EDL punishes this crime are:
- Maximum imprisonment in its maximum degree to minimum imprisonment in its minimum degree, in case the information used or disclosed is possessed in any of the circumstances set forth in Article 166, that is, by any of the persons with respect to whom it is presumed that they handle such information; or medium to maximum imprisonment in its medium to maximum degrees for cases in which a subject in the same circumstances indicated above recommends an operation mediated by privileged information.
- Minor imprisonment in its medium to maximum degrees in other cases of use or disclosure of privileged information.
To discuss the implications of both regulations, please contact our Corporate and Business group:
Alvaro Rosenblut | Partner | arosenblut@az.cl
Stephanie Cruz | Legal & Business Director | scruz@az.cl
Vicente Martínez | Senior Associate | vmartinezw@az.cl
Pablo Méndez | Associate | pmendez@az.cl
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