A Sigma general manager could be facing 20 years in jail after Australia’s top regulator, ASIC charged him with insider trading.
October 30, 2020 | AtoZ Markets – The Australian Securities and Investments Commission (ASIC) said on Friday that the general manager of business development and M&A at Sigma, Michael Story had been charged with two counts of insider trading.
Sigma Healthcare (ASX: SIG) is a wholesale and distribution pharmaceutical business servicing pharmacies and hospitals throughout Australia and during 2018 was the main supplier to the Chemist Warehouse Group (CWG).
Sigma general manager charged with insider trading
Sigma publicly announced on July 2, 2018, that the wholesale supply agreement between Sigma and CWG would cease on June 30, 2019. Following the announcement, Sigma shares fell 40% lower compared to the previous day. Mr. Story disposed of 645,047 Sigma shares on 9 May 2018 and a further 250,000 Sigma shares on June 21, 2018.
ASIC alleges that at the time he disposed of the two tranches of Sigma shares, Mr. Story was in possession of inside information relating to the status of negotiations to renew the wholesale supply agreement between Sigma and CWG.
At the time of the alleged offenses, each of the charges of insider trading contrary to section 1043A of the Corporations Act 2001 carried a maximum penalty of 10 years’ imprisonment.
The maximum penalty for insider trading was increased to 15 years imprisonment in March 2019. The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
At the time of writing, Story remains an employee of Sigma. The matter has been adjourned to a committal mention hearing in the Melbourne Magistrates Court on 18 December 2020 at 10 am.
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