Former Gunns chair guilty of $3m insider trading but only gets a $50k fine
By Juliette Overland
The former chairman of Gunns Ltd John Gay has received a $50,000 fine for insider trading but will not serve time in jail. Will such a sentence really deter others who might be tempted to engage in insider trading?
Earlier this month, Mr Gay entered a guilty plea to charges of insider trading resulting from the sale of 3.4 million Gunns' shares for about $3 million in late 2009. At the time he sold the shares Mr Gay was aware of a private management report which indicated an expected drop in Gunns’ profits. When the report was later released, Gunns’ share price dropped significantly. This means that Mr Gay avoided a significant loss by selling the shares when he did.
It's very interesting.
I thought Courts and judges were able to impose fines or paybacks if criminals made large sums of money from their crime.
Doesn't seem to be any evidence of that in this case. Why no appeal ?
+1. His medical prognosis was poor and he was legitimately found to have sold on advice to get his affairs in order prior to dying.Couple of mitigating factors to the case.
1. Inside trading fine at that time was $250kish max
2. Court found that he had a legit reason to sell stock, which would have arguably been done regardless of whether he had inside info or not.
3. Plus plea bargaining with the prosecutor + health issues
In this case he didn't 'make' any money per se, but reduced losses which is a bit different.
Couple of mitigating factors to the case.
1. Inside trading fine at that time was $250kish max
2. Court found that he had a legit reason to sell stock, which would have arguably been done regardless of whether he had inside info or not.
3. Plus plea bargaining with the prosecutor + health issues
In this case he didn't 'make' any money per se, but reduced losses which is a bit different.
Sydney stockbroker Oliver Curtis found guilty of conspiring to commit insider trading
http://www.abc.net.au/news/2016-06-02/oliver-curtis-found-guilty-of-insider-trading-charges/7461780
I could never undertand what his defence actually was.
I could never undertand what his defence actually was.
It was along the lines of he was told what Orion was buying, but that wasn't moving the price. What was moving the price was that Hartman was doing large block trades. Because Curtis didn't know this, he claimed, unsuccessfully, that he wasn't privy to market sensitive inside information.
It was along the lines of he was told what Orion was buying, but that wasn't moving the price. What was moving the price was that Hartman was doing large block trades. Because Curtis didn't know this, he claimed, unsuccessfully, that he wasn't privy to market sensitive inside information.
I could never undertand what his defence actually was.
The Crown's case was when Mr Hartman was an equities dealer at Orion Asset Management he would give information about Orion's trading intentions and Curtis would then trade contracts for difference on those shares before Orion's deal went through to take advantage of the share price movement.
Read more: http://www.afr.com/news/oliver-curtis-found-guilty-of-insider-trading-20160527-gp5yqf#ixzz4AQ3ggReY
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WHAT IS "INSIDE INFORMATION"?
Broadly, "inside information" refers to "information" that is not "generally available", and if it were "generally available", a reasonable person would expect it to have a material effect on the price or value of particular listed securities or other financial products. It does not matter if the information is false.
They got that kid from NAB and ABS for trading on ABS stats in the forex market so I assume Australia's insider trading laws must be broadly drafted (I don't remember studying them much in uni). Incidentally I understand the NAB guy lost on at least a few trades because even though he had the info ahead of time he guessed wrong about which way it would move the market.
Yes but there's got to be a big difference in materiality (is that a word?) between
1. Unpublished official statistics compiled by a major government department.
2. Undisclosed trading intention of a minnow asset manager.
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