Duncan Stewart, of Armadale, Victoria, has been sentenced to 18 months imprisonment for insider trading in relation to mining company, Kidman Resources Limited (Kidman) and a takeover offer from Wesfarmers Limited (Wesfarmers).
He is to be released forthwith upon entering a recognisance in the amount of $10,000 to be of good behaviour for a period of 2 years. This is under the condition Mr Stewart pays a penalty of $64,975.48.
On 22 August 2024, Mr Stewart pleaded guilty to purchasing $130,635.87 worth of Kidman shares on 3 and 10 April 2019 while in possession of inside information about Wesfarmers' proposal to acquire Kidman, before the information was made public.
Following Kidman's public takeover announcement on 2 May 2019, Mr Stewart sold all his Kidman shares, making a realised profit of approximately $64,975.48 from his insider trading activity.
Mr Stewart also admitted to being privy to a second, confidential Kidman takeover bid, from Chilean mining company, Sociedad Química y Minera de Chile in March 2019, and encouraged a family member to purchase Kidman shares while in possession of this deal information. Mr Stewart was not sentenced for this offence, but it was taken into account by the Court in passing sentence.
ASIC Deputy Chair Sarah Court said, 'Insider trading is a serious corporate crime. A sentence of imprisonment is the most severe penalty a court can order and, in this case, is coupled with a financial penalty, automatic directorship disqualification for 5 years, and the general consequences of having a criminal record.
'When someone exploits inside informational to gain a financial advantage, the rest of the market unfairly miss out on gaining a profit or avoiding a loss. This crime affects all Australians' investments in the share market and in their super funds.'
In handing down the sentence, Judge Manova said that insider trading 'shatters' public confidence and undermines the integrity of Australia's financial markets.
Her Honour noted that had Mr Stewart not pleaded guilty, she would have imposed a sentence of two years and three months, with release after having served 2 months imprisonment, and to be of good behaviour for three years.
Strengthening the investigation and prosecution of insider trading is one of ASIC's 2025 enforcement priorities.
In late 2024 ASIC established a new criminal investigation taskforce to boost resources and expertise for investigating insider trading cases.
The matter was prosecuted by the Office of the Director of Public Prosecutions (Cth).
Background
Mr Stewart first appeared on insider trading charges on 24 August 2023 (23-227MR).
At the time of the offending in April 2019, the maximum penalty for insider trading was 15 years imprisonment. The Court could also impose a fine of up to $945,000.
