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The impact of new technologies on insider trading

26 March 2018
An increase in 'outsiders' attempting to hack
New technologies are having a significant impact on insider trading, with implications for all companies and regulators.

Research highlights with Juliette Overland

Research by Dr Juliette Overland, Associate Professor in the Discipline of Business Law, highlights the way that insider trading is changing as a result of technological developments which have altered the way that people communicate and access information.

As the internet, smartphones and other personal devices provide a constant online connection, people have access to more information than ever before, and greater ease to communicate and share information with others.

Dr Overland has identified that while insider trading was once most commonly carried out by “insiders” - people who had an employment or professional connection to an organisation to which inside information related - there has been an increase in “outsiders” attempting to hack into computer networks to try to obtain market sensitive information held by companies and regulatory organisations.

Technological developments also have implications for regulators wanting to detect insider trading and enforce the law. With an increasing number of tools available, regulators can use technology to more effectively conduct surveillance of securities markets, and to investigate the “digital footprint” offenders may leave behind.

Dr Overland has noted that technological developments are likely to change the nature of insider trading activity, in Australia and overseas, and that companies and regulators will need to be ready to respond to these changes in order to protect valuable confidential information, and to effectively enforce insider trading laws.

If insiders can take advantage of the trading that’s occurring for our benefit, we can all potentially be the victims of insider trading, and it’s our future that will suffer if insider trading laws can’t be properly regulated and enforced.
Dr Juliette Overland

Published work

Overland J 2017 'Reforming Australian Insider Trading Laws: A New Model of Corporate Criminal Liability - Part 1', Australian Journal of Corporate Law, vol.32:3, pp. 314-32 [link]

Overland J 2018 Forthcoming 'Reforming Australian Insider Trading Laws: A New Model of Corporate Criminal Liability - Part 2', Australian Journal of Corporate Law