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In the course of his employment he had become party to inside information about a proposed takeover. He passed the information to his father-in-law, through whom he procured the purchase of just under 154,000 shares in the company at 13p per share on May 30, 2006.

On June 1, 2006, the takeover was made public. The offer price stood at 45p per share. The profit on the purchase of the shares was £48,919. A cheque for half that amount was given to the appellant by his father-in-law.

In passing sentence, the judge observed that the appellant’s offence was not to be treated as a victimless crime.

Their Lordships agreed. The person who sold the shares at 13p might have been determined to sell on that date at that price or at any price. However, he would not have sold at that price if he had known that the takeover was already agreed and would become public within 48 hours.

Those who involved themselves in insider dealing were criminals: no more and no less. The principles of confidentiality and trust, which were essential to the operations of the commercial world, were betrayed by insider dealing and public confidence in the integrity of the system which was essential to its proper function was undermined by market abuse.

Takeover arrangements were normally kept secret. Very few people were permitted to have advance knowledge of them. Those who were entrusted with advance knowledge were entrusted with that knowledge precisely because it was believed that they could be trusted.

When they sought to make a profit out of the knowledge and trust reposed in them, or indeed when they did so recklessly, their criminality was not reduced or diminished merely because they were individuals of good character.

As a result of that breach of trust, the appellant made a substantial profit for himself and for his father-in-law. Only one transaction was involved but the profit arising from his single act of dishonesty was virtually £50,000. That fact demonstrated that profits from even a single transaction of insider dealing could be very high indeed.

Their Lordships emphasised that such conduct did not merely contravene regulatory mechanisms. If there ever was a feeling that insider dealing was a matter to be covered by regulation, that impression should be rapidly dissipated.

The message must be clear: when it was done deliberately, insider dealing was a species of fraud; it was cheating. Prosecution in open and public court would often, and perhaps much more so now than in the past, be appropriate.

Although those who perpetrated the offence might hope, if caught, to escape with regulatory proceedings, they could have no legitimate expectation of avoiding prosecution.

The appellant submitted that his sentence should be reduced because his case happened to be under consideration by the Financial Services Authority when it decided to change policy in relation to whether to proceed by way of prosecution rather than, as before, regulation.

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