Does an email regarding an insider list and a trading ban amount to inside information?

Introduction

In the world of European financial markets, inside information plays a central role in the Market Abuse Regulation (“MAR”). It constitutes the basis for both the issuer’s disclosure obligations and the prohibition on inside trading, whilst also regulating the unlawful disclosure of inside information pursuant to Article 10 of the MAR.¹ Article 7(1)(a) of the MAR defines it as:

“information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments”

In its recent judgment in Finansinspektionen v Carnegie Investment Bank AB (Case C-363/24), the Court of Justice of the European Union (“CJEU”) specifically analysed whether a procedural notification of an individual’s inclusion on an insider list possesses the “precise nature” required to transform a routine communication into legally binding inside information.

Facts of the Case

The case centred on the CEO of Starbreeze AB (“Starbreeze”), a Swedish video game developer and publisher, who also owned Varvtre AB (“Varvtre”), a holding company serving as Starbreeze’s majority shareholder. Varvtre had a depository loan with Carnegie Investment Bank AB (“Carnegie” or the “Bank”), supported by a SEK 35 million credit line. As a collateral, Varvtre pledged its shares in Starbreeze. Following a drop in the price of Starbreeze’s shares, Varvtre’s credit with Carnegie became overindebted, and on 15 November 2018, Carnegie initiated a sale of the pledged shares.

On the same day, at 13:32, Starbreeze’s head of communications, who also assisted the CEO and Varvtre in their dealings with Carnegie, sent an email to the Bank. The email stated that the CEO had been logged on Starbreeze’s transparency register and was prohibited from selling shares after 13:33. Shortly thereafter, an official insider list was opened at 13:35, and the CEO was formally registered on that list at 13:37.

While the head of communications later justified the CEO’s inclusion because the CEO had been informed of the CFO’s resignation, this specific underlying reason was never disclosed to Carnegie in the email. Carnegie argued that the information provided was factually incorrect, as the CEO had not yet been officially added to the insider list at the exact moment the email was sent. Carnegie initially suspended the sale of Starbreeze shares that it had initiated that morning, but it resumed transactions later that afternoon. On 23 November 2018, Starbreeze issued a public press release announcing that its sales revenue was lower than anticipated and confirming that the CFO no longer held their post

Sweden’s Financial Supervisory Authority (the “Authority”) brought an action against Carnegie and issued a fine of SEK 35 million, claiming that Carnegie infringed the prohibition against insider trading provided for in Articles 8 and 14 of the MAR, on the basis of the email sent of 15 November 2018, which the Authority deemed it to be inside information. The case was eventually appealed to the Högsta domstolen (Sweden’s Supreme Court), which referred the case to the CJEU for a preliminary ruling.

Preliminary Questions brought by the Högsta domstolen

The Högsta domstolen referred the following questions to the CJEU:

1. Can a communication that a particular person has been included in an insider list and is prevented from selling shares in an issuer be of a sufficiently specific nature to constitute inside information under Article 7(2) of [Regulation No 596/2014], even if the reasons for the person’s inclusion are not clear?
2. If that is the case, then under what conditions?
3. Is it relevant to the assessment of whether a communication of the kind referred to in Question 1 constitutes inside information, if the issuer’s assessment that the circumstances which led to the person’s inclusion in the insider list constituted inside information was correct?
4. Is it relevant to the assessment of whether a communication such as that referred to in Question 1 constitutes inside information, if the information contained in the communication was correct?

First and Second Questions

Regarding the first two questions, the CJEU focused on whether a communication from an issuer identifying a person’s inclusion on an insider list, who is prevented from selling shares in that issuer, even if the reason for the person’s inclusion is not clear, is capable of constituting information which is “of a precise nature”. The CJEU began by clarifying its interpretation of inside information under Article 7(1) of the MAR and that inside information is “of a precise nature” if it:

1. indicates a set of circumstances or an event that has occurred or is reasonably expected to occur; and
2. is specific enough to enable a conclusion regarding its possible effects on prices.

The CJEU distinguished between the mere administrative act of placing someone on an insider list and the substantive signal sent by a trading restriction. While a notification of inclusion on a list is, in principle, a neutral procedural event that does not inherently impact share prices, the addition of a specific prohibition on selling shares fundamentally changes its character. Such a restriction necessarily implies that the individual possesses knowledge of a non-public event likely to have adverse implications for the company. Consequently, the CJEU concluded that a communication stating a person is on an insider list and subject to a sales prohibition is capable of being “of a precise nature” even if the underlying reasons are not disclosed. The essential test is whether a reasonable investor would be likely to use such a communication as part of their investment decisions to gain an advantage over others who do not have that information.

Third and Fourth Questions

In addressing the third and fourth questions, the CJEU examined whether the legal classification of “inside information” depends on the issuer’s subjective assessment or the factual accuracy of the communication. The CJEU ruled that the concept of “inside information” must be applied in an objective manner. Therefore, an issuer’s own assessment, whether accurate or inaccurate, as to whether certain circumstances constitute inside information is irrelevant to the legal determination of whether the information falls within the scope of Article 7(1) of the MAR.

Furthermore, the CJEU held that the actual correctness of the information is not one of the four essential elements required to define inside information. Instead, the accuracy of the information is a factor to be considered when evaluating its “precise nature”. For information to meet the threshold of precision, it must possess a certain degree of credibility, meaning there is a reasonable likelihood that the event or circumstances referred to will occur. The CJEU emphasised that information which turns out to be incorrect following an ex post investigation can still be classified as inside information if it appeared credible on the date of disclosure and was capable of conferring an economic advantage on the recipient relative to other investors. This principle was applied directly to the facts of the case, where the five-minute discrepancy between the email and the official registration on the insider list did not prevent the communication from being considered inside information, as the event was imminent and the information remained credible.

Outcome of the Judgment

Since the proceedings were considered a step in the action pending before the Högsta domstolen, the CJEU indicated that the decision on costs is a matter for that court.

¹ Marco Ventoruzzo and Chiara Picciau ‘Inside Information, Insider Dealing, Unlawful Disclosure of Inside Information, and Market Manipulation’ in Marco Ventoruzzo and Sebastian Mock (eds), Market Abuse Regulation Commentary and Annotated Guide (2^nd edn, OUP 2022).

Disclaimer: Ganado Advocates is responsible for contributing this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report. This article was first published in ‘the Independent’ on 15/04/2026.