Central Bank of Ireland
Credit: William Murphy [CC BY-SA 2.0] 

Mr Dalton breached MAR by engaging in insider dealing on two separate occasions, by successfully selling shares he owned in HealthBeacon PLC (the Company and his former employer) in circumstances outside of the normal exercise of his employment, profession, or duties. He sold the shares whilst in possession of price sensitive, material, inside information, relevant to the Company. Neither the Company nor any of its other employees or agents were the subject of this investigation.

Central Bank Director of enforcement Karen O’Leary said: “Trading while in possession of inside information, especially when an individual is in a privileged position to hold such information, is an abuse of the system and undermines the integrity of the market and as such is viewed very seriously by the Central Bank.

“This outcome demonstrates the Central Bank’s willingness to investigate suspicious transaction and order reports (STORs) received from market intermediaries and follow our investigations through to the appropriate conclusion, holding those engaging in market abuse to account.

“The submission of STORs under Article 16 of MAR is a key safeguard in our systems to protect securities markets from abuse. The timeliness and quality of STORs being submitted to the Central Bank is important to ensuring the Central Bank’s ability to reinforce market integrity.”

Mr Dalton breached Article 14(a) of the MAR by selling his shares while in possession of confidential, price-sensitive information about his former employer.

During his employment, he became aware of supply-chain issues that would prevent the Company from meeting its previously announced production forecasts. Despite resigning on 24 June 2022, he retained this inside information and contacted his broker on 27 June and 4 July 2022 to sell his shares.

On 6 July 2022, the Company publicly announced the supply-chain delays, causing its share price to fall sharply. By selling before this announcement, Mr Dalton avoided a loss of approximately €21,800.

Mr Dalton admitted the contraventions and agreed to resolve this matter with the Central Bank, resulting in overall sanctions being imposed by the Central Bank in the sum of €87,200. This figure is made up of €21,800 disgorgement and a separate monetary sanction in the amount of €65,400. Following the application of a 30 per cent settlement discount, which under legislation is only applied to the monetary sanction, Mr Dalton will pay a total sanction of €67,580.

In deciding the appropriate sanctions to impose, the Central Bank considered all relevant circumstances, including the need to impose a penalty proportionate to the privileged position Mr Dalton was in, being in possession of specific information that was not in the public domain, which, when made public, had a direct negative impact on the Company’s share price. Due to his actions, Mr Dalton did not suffer this impact and avoided a financial loss.

This marks the first occasion on which the Central Bank has imposed disgorgement as a sanction. Disgorgement is a distinct and separate administrative sanction to a monetary penalty, which restores market parity by reversing unjust enrichment, as opposed to a fine, which is imposed to punish an act itself.