The German Bundesgerichtshof has referred questions to the European Court of Justice on the timing of inside information disclosure.

  • Under EU rules, for "inside information" to exist the information has to be of a precise nature. Information is deemed to be of a 'precise' nature if it indicates a set of circumstances which may reasonably be expected to come into existence (article 1 Directive 2003/124/EC). Such information must be disclosed immediately. The Bundesgerichtshof has asked the ECJ at what point in time it is reasonable to assume that a set of circumstances will come into existence.
  • The Bundesgerichtshof has also asked the ECJ if there is a duty to immediately disclose the steps preceding a future event (such as the signing of a letter of intent for a proposed acquisition), even if it as yet uncertain whether that future event will actually occur. In referring this question, the Bundesgerichtshof appears to be reconsidering its earlier position that inside information does not have to be disclosed until there is a reasonable expectation that the event will actually take place.  

These questions have arisen in a case where investors allege that they were informed too late about the departure of a company's CEO. The CEO's departure was made public after the meeting of the company's supervisory board in which meeting the decision was taken. Various shareholders claim that they were prejudiced because the CEO had already informed the chairman of the supervisory board at an earlier date that he wanted to leave.

If the ECJ were to follow the new position of the Bundesgerichtshof, inside information would in certain instances have to be disclosed at an earlier stage than is currently assumed.