## Facts

- Spector Photo Group NV was a publicly listed Belgian company; Chris Van Raemdonck was a manager of the company.
- Shortly before a planned public announcement of a takeover of a competitor, Spector repurchased its own shares.
- The repurchases were described as serving a corporate need to have shares available for an employee stock-option plan.
- At the time of the buy-backs, Spector and its management possessed non-public, price-sensitive information about the intended acquisition.
- After the acquisition was announced, Spector’s share price rose, increasing the value of the repurchased shares.
- The Belgian financial regulator (CBFA) investigated and imposed administrative fines on Spector and Van Raemdonck for insider dealing under Directive 2003/6/EC (Market Abuse Directive).
- Spector and Van Raemdonck challenged the fines; the Brussels Court of Appeal referred interpretive questions to the Court of Justice of the European Union (CJEU).

## Issues

1. Whether, under Article 2(1) of Directive 2003/6/EC, trading in a financial instrument while in possession of inside information implies “use” of that information, or instead requires proof of a specific subjective intent.
2. Whether a national-law rebuttable presumption that a person who trades while possessing inside information has “used” it is compatible with EU fundamental rights, including the presumption of innocence.
3. Whether a trader’s stated legitimate purpose (e.g., share buy-back for an employee stock-option plan) excludes insider dealing, or is relevant only to rebuttal.

## Decision

- The CJEU interpreted Article 2(1) to mean that a person who possesses inside information and trades (or attempts to trade) in the related financial instruments is presumed to have “used” that information.
- The prohibition in Article 2(1) is framed objectively and does not require the regulator to prove a particular intent (such as intent to obtain an improper advantage) as an additional element.
- The presumption of “use” is permissible only if it is rebuttable and the rights of the defense are respected, including a genuine opportunity to contest the inference.
- A legitimate transaction purpose does not automatically remove the conduct from Article 2(1), but may be relevant evidence to rebut the presumption in the circumstances of the case.
- The CJEU provided interpretive guidance and left application to the national court, including assessment of whether the administrative fines should stand.

## Legal Principles

- Under Directive 2003/6/EC, possession of inside information plus trading in the related instrument supports a rebuttable presumption that the information was “used.”
- Article 2(1) defines insider dealing in objective terms; Member States may not add a requirement of specific intent as a necessary element of the infringement.
- Rebuttable presumptions in enforcement are compatible with the presumption of innocence if confined within reasonable limits and if the defense can effectively rebut and is afforded procedural protections.
- A lawful or corporate rationale for a transaction does not, by itself, negate insider dealing; it can function as evidence relevant to rebutting the presumption of use.
- Effective and uniform market-abuse enforcement may justify evidentiary mechanisms that avoid making liability depend on proof of subjective purpose, so long as defense rights are preserved.

## Conclusion

The CJEU held that, for insider dealing under the Market Abuse Directive, a regulator may treat trading while in possession of inside information as presumptive “use” of that information, without proving a separate intent element, provided the presumption is rebuttable and the affected party can meaningfully defend against it; legitimate motives may rebut but do not automatically exempt the conduct.


Spector Photo Grp. NV v. Comm’n voor het Bank-, Fin.- en Assurantiewezen (CBFA), Case C-45/08 (C.J.E.U. Dec. 23, 2009)