A West Australian man accused of insider trading offences is expected to appear in Perth Magistrate's Court today (9 April 2021).
The offences involve alleged communication of inside information to another person, and trading while in possession of inside information, relating to a Perth-based diamond exploration company.
The 50-year-old man was charged as a result of a joint operation involving the Australian Federal Police, Australian Securities and Investments Commission, Australian Taxation Office and the Australian Criminal Intelligence Commission.
Authorities will allege the man possessed inside information related to a significant discovery at the company's African diamond mining tenement in 2012.
It will be alleged that while in possession of that information, he acquired shares for a family member and communicated it to a client (who did not ultimately trade themselves).
The use of this inside information allegedly occurred 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, causing the value of the shares allegedly acquired by the man to increase by $6000.
He has been charged with two offences:
- Acquiring shares in a public company while in possession of inside information concerning that company, contrary to sections 1043A(1) and 1311(1) of the Corporations Act 2001 (Cth);
- 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 Detective Sergeant Andrea Coleman said insider trading is a serious offence because it can undermine the integrity of financial markets.
