A WhatsApp Group is Being Investigated for Insider Dealing: I Posted but Never Traded. Am I in Trouble?

Could I Be Investigated for Insider Dealing if I Never Traded?

Yes. Insider dealing is not limited to buying or selling shares. Under the Criminal Justice Act 1993, a person with inside information may commit an offence by dealing in price-affected securities, by encouraging another person to deal, or by disclosing the information. 

However, the prosecution must prove the relevant elements of the offence. Simply participating in a WhatsApp group is not enough.

For offences committed on or after 1 November 2021, the maximum prison sentence is ten years, alongside an unlimited fine. Earlier offences carried a maximum of seven years.

The FCA may also investigate under the UK Market Abuse Regulation (UK MAR), which provides for civil penalties, including unlimited fines and restrictions on working in financial services.

Can WhatsApp Messages Link Me to an Insider Dealing Case?

Yes. The FCA now routinely uses messaging app data as part of its evidence-gathering in market abuse and insider dealing cases. 

WhatsApp messages have featured as evidence in recent enforcement action, and the FCA has been explicit about the risks posed by unmonitored messaging apps, particularly for those with access to inside information.

How the FCA Obtains and Uses Messaging Data

The FCA has legal powers to request relevant communications and documents, including information held on personal devices where the requirements are met.

Investigators may compare messages with trading records to establish whether information was passed on before particular transactions.

For example, a message sent shortly before another group member buys shares may be examined alongside other evidence. The timing may raise questions, but it does not prove insider dealing on its own.

What Investigators Look for in a Group Chat

Investigators consider who originally shared the information, how precise the shared content was, whether reactions or follow-up messages suggest the recipients understood its significance, and whether any member’s trading pattern changed after a particular message was sent.

The fact that a chat was private, conducted on a personal phone or expressed in informal language does not limit the evidential use that can be made of it.

What Is the Difference Between Market Colour and Inside Information?

Market colour generally involves legitimate market commentary, while inside information is confidential, price-sensitive information that meets specific legal requirements.

The distinction matters because calling a message market commentary does not automatically make it lawful.

What Market Colour Means in Professional Markets

Market colour refers to general views shared between market participants about the state of the market, including possible developments, anonymised and aggregated flow information, and publicly available analysis. 

The timely and appropriate exchange of market colour can contribute to an efficient and transparent market. 

It is legitimate when provided by a member of staff with appropriate knowledge, under appropriate oversight, and without disclosing price-sensitive specifics about a particular issuer or instrument.

What the Law Defines as Inside Information

Under UK MAR, inside information is information of a precise nature which has not been made public, which relates directly or indirectly to one or more issuers or financial instruments, and which, if it were made public, would be likely to have a significant effect on the price of those instruments. 

A further condition applies: the information must be of a kind that a reasonable investor would be likely to use as part of the basis of their investment decisions. All four conditions must be met for the legal definition to be satisfied.

Why the Distinction Is Fact-Specific, Not Label-Specific

Describing a message as “market colour”, “banter” or “general chat” does not determine whether it contains inside information.

Investigators consider the content, its source and what the sender knew.

For example, sharing a personal opinion about a company’s prospects differs from hinting at a confidential takeover learned about through work.

Could Posting or Encouraging Others to Trade Create Insider Dealing Liability?

Yes. You may face allegations for encouraging someone else to trade or unlawfully disclosing inside information, even without placing a trade yourself.

The criminal and civil regimes apply different legal requirements, which must be considered separately.

The Criminal Offence of Encouraging Insider Dealing

Under the Criminal Justice Act 1993, a person commits this offence if, while possessing inside information as an insider, they encourage another person to deal in price-affected securities, knowing or having reasonable cause to believe that dealing would take place. 

There is no requirement that you profit from the dealing. There is also no requirement that the person you encouraged knew they were acting on inside information.

The Criminal Offence of Unlawful Disclosure

A person who possesses inside information as an insider also commits a criminal offence by disclosing that information to another person, unless the disclosure is made in the proper performance of their employment, office or profession. 

For example, sharing confidential information obtained through work with friends in a WhatsApp group may lead to an investigation.

However, not every informal disclosure establishes an offence. The prosecution must prove the legal requirements, and statutory defences may apply.

The Civil Prohibition on Recommending or Inducing

UK MAR prohibits a person who possesses inside information from using that information to recommend or induce another person to acquire or dispose of financial instruments. 

This prohibition mirrors the criminal encouraging offence in its reach and does not require personal trading. It carries its own civil sanctions, including unlimited fines and a prohibition from working in financial services.

What Investigators Focus on in a Posting Case

Investigators examine what you knew, how you obtained the information and what your messages communicated.

They may consider whether you encouraged trading, disclosed confidential information or merely discussed publicly available news.

The full conversation can be important because an isolated message may not explain its intended meaning.

Should I Use My Employer’s Lawyers or Get Independent Advice?

Your employer may offer legal support during an insider dealing investigation. Before accepting, establish whether the solicitor represents you, the company or both.

Independent advice is particularly important where your interests may differ from your employer’s.

When Your Employer May Offer Legal Support

Employers commonly offer joint legal support when an external investigation arrives at the firm, when an internal review is under way or when a regulator requests interviews. 

The offer may be genuine and appropriate, particularly at an early stage where your employer’s position and yours appear consistent.

Why a Conflict of Interest Can Arise

A conflict may arise where the employer wants to establish whether an employee disclosed information without authorisation, while that employee needs to protect their own legal position.

Solicitors must comply with professional rules concerning conflicts of interest and confidentiality.

If one solicitor represents both parties, there may be limits on what can remain confidential between them.

The Two Situations Where Independent Advice Is Most Important

The first is where your responses risk self-incrimination or amount to admissions of a regulatory breach. In that situation, a solicitor who owes duties to the firm cannot give you advice that is solely directed at protecting you. 

The second is where your employer may be seeking to establish that responsibility for what happened lies with an individual employee rather than with the firm itself. In either situation, relying on representation that is also answerable to your employer creates a structural problem that independent advice avoids.

What Independent Representation Gives You

An independently instructed solicitor can advise on criminal liability, regulatory obligations and employment concerns without also representing your employer.

They can explain what information you must provide, what protections apply and how to respond to investigators.

What Should I Do With the Chat History on My Phone?

Preserve the complete chat history. Do not delete messages, alter records or reset your device.

Seek legal advice before handing over personal devices or taking steps that could affect the evidence.

Why Preserving the Full Chat Record Matters

Investigators can reconstruct deleted messages from other group members’ devices, platform backups, cloud storage and data held by the messaging service. 

Deleting messages after you know or suspect an insider dealing investigation is under way is itself capable of constituting a criminal offence, including perverting the course of justice or concealing evidence. 

It will also be treated as seriously adverse by any tribunal or regulator that subsequently reviews your conduct.

What to Preserve and How

Keep the complete conversation, including all attachments, link previews, reactions and any related emails or messages on any device. 

Do not alter, delete, forward selectively or capture screenshots in a way that removes context or metadata. 

If your employer asks you to hand over a personal device, take legal advice first about the scope of any such request and your rights in relation to personal data on that device.

What Not to Do

• Do not delete messages or reset devices. Do not discuss what the chat records show with other group members or coordinate your account of events with them. 
• Do not use employer-confidential material to gather evidence you think might support you. 
• Do not take any action on your accounts or devices before speaking to a solicitor, because those actions may have consequences you cannot fully assess without advice.

How Should I Respond to Investigators or My Employer?

The appropriate response depends on whether you are facing an FCA interview or an internal employer investigation. The two processes have different obligations and legal protections.

FCA Compulsory Interviews and Voluntary Interviews

The FCA can require individuals to attend interviews and answer questions under its statutory powers.

In a compulsory interview, cooperation may be legally required. Answers obtained under compulsion are generally subject to restrictions on their use against you in criminal proceedings, although exceptions apply. A voluntary interview is different, and you are not normally under the same obligation to attend or answer questions.

Before attending either type of interview, establish which procedure applies and obtain legal advice.

Internal Employer Interviews

An employer may interview you under its internal policies or employment procedures.

Your contractual obligations and any right to be accompanied depend on the circumstances. What you say may be recorded and could later be disclosed to investigators where legally permitted or required.

Do not assume an internal interview carries the same protections as an FCA compulsory interview.

The Risk of Inconsistent Statements

Your explanations to your employer and the FCA may later be compared.

Differences can arise when questions are asked differently or when you have not yet reviewed the relevant records. However, significant inconsistencies may affect your credibility.

A solicitor can help you understand the questions and available evidence before giving an account.

The General Principle

Do not ignore lawful requests from investigators.

Where cooperation is required, you must comply with the applicable obligations. However, you can seek independent advice before providing a substantive response.

A solicitor can explain your rights, the information you may need to provide and how the different proceedings could affect one another.

How a Fraud Defence Solicitor Can Help You

A fraud defence solicitor can review your WhatsApp messages, assess whether they contain inside information and advise on any potential criminal or regulatory allegations.

They can examine the circumstances in which information was shared, whether your messages encouraged trading and what investigators may be able to establish from the evidence.

If the FCA or your employer requests an interview, a solicitor can explain your obligations and help you prepare. They can also advise where your interests differ from those of your employer.

Our Fraud and Financial Crime solicitors can assist with insider dealing investigations, including questions about disclosure, trading recommendations, evidence preservation and regulatory interviews.

Speak to an Insider Dealing Defence Solicitor

If a WhatsApp group you participated in is being investigated for insider dealing, obtaining independent advice can help you understand whether your messages create any legal risk.

Ashmans Solicitors can review your position, advise on communications with the FCA or your employer and explain what steps to take before responding to an investigation.

Book a consultation to discuss your circumstances.