The criminal liability of company directors in the financial services sector

Abstract

The study sets out to examine the criminal liability of company directors in the financial services sector. The position of the director under the Companies Act 1995, and the need to impose penal sanctions on his office is discussed in the introduction. The different duties of the director and the distinction between quasi-criminal and criminal offences are to be found in Chapter 1 of this dissertation. Chapter 2 looks at the insider dealing provisions, introduced into Maltese law through the enactment of the Insider Dealing Act, 1994. With the heralding of a financial services market in Malta, through the enactment of various special legislation, the position of the director has changed, some argue for the better, and as a result of this, the person holding office as director can now be subjected to imprisonment for a multitude of 'new' offences. As a result of this, a special look is made at the Prevention of Money Laundering Act, 1994, the Investment Services Act, 1994 and the Malta Financial Services Centre Act, 1988 and their application vis-a-vis the director. Chapter 4 deals with the investigations carried out by inspectors appointed under the Companies Act, 1995 and whether the right to silence of the director or person not to incriminate himself, when being interviewed by these inspectors is still operative. Finally, the study tries to conclude by putting forward the idea that the best way to avoid abuses on the market place is through regulation. Regulation has to be both external, as for example, with the help of a supervisory authority, and internal, by, for example, the imposition of obligations on directors. If the director fails to observe such obligations, then he might become criminally liable.