ASIC charges Insider Traders: Two Traders jailed


6 June AtoZForex, Vilnius — One of the main focus points on the agenda of Australian Securities and Investment Commission (ASIC) is insider trading. The regulator lives by its quote “confidence in the integrity” and is actively monitoring the market of any violations. In its attempt to keep the market clean from insider trading, the regulator has recently discovered a news case. ASIC charges insider traders from Sydney with jail sentences up to 3 years.

What is Insider Trading?

Before jumping into the story, let’s get clear on the term insider trading. Illegal insider trading happens when someone tries to buy or sell the security, breaking the fiduciary duty or other relationship of confidence and trust, while having the material and non-public information about the security. Insider trading includes “tipping” others when you possess any kind of non-public information. It’s not only directors or CEO’s who can be charged for it, but also brokers and even their family members can be found guilty. Building further, ASIC's Commission Cathie Armour stated:

“Insider trading is a very serious crime and the penalties involved for those who may be tempted to take the risk are significant, through loss of reputation, employment opportunity and as this case demonstrates imprisonment.”

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The case of Michael Hull

The Sydney resident, Michael William Hull had previously confessed on trading in the shares of several companies like Jabiru Metals Ltd, Mac Services Ltd., and Giralia resources NL. He traded shares while possessing inside information during the period of September 2010 to February 2011.

The Australian watchdog got a referral from its market surveillance team in 2011 and immediately started an investigation into Hull’s share trading. As a result, Hull was charged in 2014 for insider trading activities. Allegedly, the inside information was passed to Hull by a friend, who was an employee in the investment banking of a global financial services firm. This firm worked on the major corporate transactions, which involved the companies.

Curtis traded on 45 occasions making $1 Million Profit

Another Sydney-based trader, Oliver Curtis, was found guilty of conspiring to commit the same conduct after a three-week trial. The offence was related to the agreement between Curtis and another convicted insider trader John Hartmann. Allegedly, his part of the agreement states that Curtis traded on 45 occasions between May 2007 and June 2008, in which he made an overall profit of $1 million.

Hartman was at that time an equities dealer at Orion Asset Management Ltd. Allegedly, the pair conspired that Hartmann would provide Curtis with information about Orion’s trading intentions, so Curtis would be able to trade contracts for difference (CFD) using it. Both men tried to take advantage of expected changes in share price, caused by Orion’s trading plans. As a payback, Curtis agreed to procure Hartman with a share of the profit in cash and to buy him items using the assets.

ASIC charges insider traders: What is next?

Michael Hull pleaded guilty in the South Wales Supreme Court and he was sentenced on 3rd of June to the effective head sentence for 17 months. Curtis is currently facing the perspective of five years imprisonment (maximum) and/or fine equal to $220,000. Hartman pleaded guilty on April 6, 2010, and was sentenced to three years in prison.

Having successfully exposed the case of Michael Hull and Oliver Curtis, ASIC adds another solved insider case to its database. Since 2009, ASIC has revealed 39 insider trading cases before the Courts. In 32 of them, the regulator succeeded to achieve a conviction, guilty plea or guilty finding.

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