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It was generally agreed that Matthew's wife was involved in insider dealing as she had traded in stocks of Manfold after learning the confidential information from her husband as a company director. As for Matthew's liability, it would depend on his intent of disclosing such price-sensitive information to his wife. |
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Company directors should not pass on sensitive information they acquire through their role as a company director to any other persons, including their spouses, under any circumstances. They have a fiduciary duty and liability to ensure that sensitive information be kept confidential. |
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To prevent insider dealing, company code of ethics can be issued to provide guidelines for employees of all levels in handling confidential information. The code should be subject to regular review. |
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Companies may also prepare an induction package or handbook for new directors. It can lay down the policy on stock dealing, handling of price-sensitive information and declaration of conflict of interest situations clearly for and to be signed by new directors. |
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All in all, integrity management and ethical leadership should start from the top. |
