WA man sentenced for insider trading

Australian Federal Police, Australian Securities and Investments Commission, Australian Taxation Office, Australian Criminal Intelligence Commission

A West Australian man has been sentenced to a 13-month suspended prison term by the WA Supreme Court for insider trading.

The man, 52, who was sentenced yesterday (30 November 2022) and released under a two-year good behaviour bond, is banned from being a company director for five years because of his conviction. 

He previously pleaded guilty to illegally providing a client with market-sensitive information about a significant discovery by a Perth-based diamond exploration company.

AFP officers charged the man in March 2021 over the 2012 incident, after a joint operation involving the AFP, Australian Securities and Investments Commission, Australian Taxation Office and the Australian Criminal Intelligence Commission.

The man communicated the inside information about the discovery at a company’s African diamond mining tenement in 2012, a day before the company’s shares were put in a trading halt and five days before the discovery was made public.

The public release of the inside information increased the company’s share price. The client did not ultimately trade in the shares.

The man pleaded guilty in June (2022) to communicating inside information to a person, when he knew, or ought reasonably to have known, that person would be likely to acquire shares, contrary to sections 1043A(2) and 1311(1) of the Corporations Act 2001 (Cth).

The maximum penalty for these offences is 10 years’ imprisonment and a $495,000 fine.

AFP Inspector John Whitehead said insider trading was a serious offence because it could undermine the integrity of financial markets.

“We work with our partner agencies to uphold the integrity of Australia's financial and regulatory systems,” he said.

“This matter is a reminder that anyone who tries to take advantage of sensitive information will be identified and prosecuted.”