Economic crimes | Another admission of misuse of insider information – YIT’s head took advantage of Lemminkäinen’s 43 percent price increase

Listed company YIT’s manager-level employee has admitted that he used insider information. It is about another event within a short period of time, involving a securities market crime the accused make a full confession.

The new event concerns the merger of two listed companies, which the manager found out about a week in advance. When the listed companies Lemminkäinen and YIT announced the merger in June 2017Lemminkäinen’s course rose by 43 percent in a day.

The manager admitted in a written procedure in the Helsinki district court at the beginning of April that he had received advance information about the upcoming merger from his colleague. The man bought Lemminkäinen’s share for 14,000 euros and sold the share pot for 19,000 euros after the merger was announced.

The man received a 50-day fine for the misuse of insider information, which means he had to pay 1,800 euros.

Inside information you can get a verdict for misuse when it is about information related to the value of a listed company’s stock. Judgment comes if you use insider information for your own benefit or tell others about it.

The crime is punishable by a fine or imprisonment for a maximum of two years.

To the same another suspected securities market crime is also connected to the merger project of listed companies.

The police and the prosecutor suspect that the Danske Bank banker shared insider information about the merger between Lemminkäinen and YIT to his father and spouse. When Lemminkäinen’s price went up, the banker’s father and spouse received a profit of tens of percent.

The chief and those close to him have denied having committed the crime.

HS told about the incident in January. The trial against the former banker and his relatives will begin in January 2023.

Also The former head of the renovation construction company Const, listed on the Helsinki Stock Exchange, has been charged with misusing insider information. This suspicion is not related to the merger of Lemminkäinen and YIT and has not been public before.

According to the indictment, the manager is guilty of misusing insider information on September 15, 2017. At that time, Consti published a profit warning, which means that the charge may be related to, for example, selling securities before the profit warning was published.

Master worked in positions where he had the opportunity to obtain unpublished information affecting the stock market price.

According to the indictment filed in July, Const’s head has benefited from insider trading to the tune of thousands of euros. During interrogations, he has denied that he committed the crime.

To the public there have recently been several convictions and charges of misuse of insider information. Helsingin sanomat newspaper reported on Saturday about an unusually extensive securities market crime. The head of the state-owned investment company Solidium had a year’s worth of information on a total of six listed companies, and he and three other Finns were convicted of gross or ordinary misuse of insider information.

All four defendants admitted their crimes after a plea bargain last March and therefore received lighter fines and prison sentences than usual. It was reportedly the first time that a securities market crime has been convicted in a so-called confession trial.