Lawyers are set to come under even more intense scrutiny with regards to insider trading following the Australian Securities and Investments Commission’s (ASIC) announcement that it will be doubling its investigations.

All professionals associated with providing advice to companies including bankers, lawyers, accountants and consultants will be targeted by ASIC which has already launched 35 investigations into insider trading, market manipulation and disclosure to the market since January.  While further investigation might seem unnecessary to a profession already highly regulated in terms of professional obligations and ethical behaviour, president of the NSW Law Society, Stuart Westgarth, says lawyers should not be excluded. “I can understand that ASIC needs to look at a range of professionals which receive confidential information,” he said.

However, he also noted that the legal profession has very strong educational requirements in terms of its obligations around legal and ethical requirements with regards to confidential information and, “the legal profession would be one of the professions more likely to comply with the law than other groups,” he added.

Litigation partner at Freehills, Andrew Eastwood agrees, stating that lawyers should not only be applying but also advising on policies and procedures with regards to the handling non-public price sensitive information. “At one level it should not be difficult because any information gained as part of the development of the transaction will be confidential and should not be disclosed outside the deal team,’ he said. “ Once the deal is announced, things can change, as the information will then be public.”

Eastwood has seen a slight shift in ASIC’s behaviour in investigating deals involving bankers, lawyers and financial advisors recently. “Historically, it has tended to be more the financial advisors and investment bankers who have been targeted,” he said. But he added that it’s not uncommon in the wash up of a deal for ASIC to make inquiries.