Legal Updates

A person convicted of using inside information may be sentenced to imprisonment if such punishment is imposed on the insider

February 13, 2025
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A woman with no experience in the capital market who was in financial distress was convicted of using inside information she received from a person with whom she was in contact and who urged her to use the information. The use of the inside information was made numerous times by making active investments that yielded her a profit of ILS 184,000. The insider received a sentence of imprisonment.

The Court sentenced the defendant to imprisonment. The offense of using inside information seriously harms the public who invests their wealth in the capital market, and there is importance in maintaining equality and fairness among investors. Therefore, Israeli law stipulates a severe punishment for offenses of this nature. In determining the punishment, the punishment imposed on the insider himself must be taken into account as well as the scope of the offenses, the defendant's closeness to the insider and his connection to the capital market, including his status. Here, the woman took advantage of her closeness to the insider who was sentenced to imprisonment, and carried out active purchasing actions in the company's shares following the information she received. On the other hand, the woman was inexperienced in the capital market and was in financial distress and under the influence of the insider. Therefore, the woman was sentenced to 3 months in prison.