A businessman has been convicted of insider trading in the first case of its kind in the Republic. Declan Service was charged with two offences and pleaded guilty to one, resulting in the first insider trading court conviction in the history of the State.
Service appeared before the courts last week and pleaded guilty to one offence after a previous court hearing heard he had told gardaí he was not guilty.
The 63-year-old appeared before Dublin Circuit Criminal Court last Thursday and pleaded guilty to one of two almost identical offences. His case was initially only intended for mention last Thursday, meaning a brief procedural appearance, rather than a substantive hearing of the case.
However, he entered a guilty plea on one charge of possessing information used in acquiring and disposing of financial instruments. The offence occurred between May 18th and May 22nd, 2020, and was contrary to the European Union (Market Abuse) Regulations 2016 and section 1368 Companies Act 2014.
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Service, of Sunnyvale Avenue, Portrush, Co Antrim, was arrested following a market abuse investigation by the Garda National Economic Crime Bureau (GNECB).
The investigation was into suspect transactions involving shares in a pharmaceutical company. It was alleged the transactions were informed by protected information about the future of the company. The inquiry carried out by the GNECB, with the assistance of personnel attached to the Central Bank of Ireland, resulted in Service being arrested for questioning last year.
At a court appearance early last month, he was sent forward for trial. On that occasion, Det Garda John Farrelly told Judge Treasa Kelly that Service’s reply to the charges was “not guilty”. The Director of Public Prosecutions had directed a trial on indictment. Accordingly, the judge granted a return for trial order.
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She said she was sending Service forward to the Dublin Circuit Criminal Court, with the case listed for mention last Thursday, though he pleaded guilty to one of the offences at that hearing. He was remanded on continuing bail and is due to be sentenced on December 20th.
Last year, Philip Lynch, a former chairman of An Post, One51 and IAWS, was found to have engaged in insider dealing, though he was not convicted in the courts. Instead, an inquiry was conducted by the Central Bank’s enforcement division. The outcome was assessed by a panel, which recommended he be fined €75,000, disqualified from being involved in a regulated financial services company for five years and publicly cautioned.
The sanctions were then confirmed by the High Court, in what was effectively the final step of the Central Bank process. Mr Lynch was a former non-executive director of drinks group C&C. He was found to have contravened regulations by using inside information in 2008 to acquire 200,000 C&C shares for the account of his approved retirement fund.
