Wednesday, 18 May 2016

Curtis’ insider trading conspiracy

You are likely to have heard that investment banker Oliver Curtis is on trial this week for conspiring to commit insider trading.

Most of people are familiar with the concept of insider trading; where an investor possesses confidential information that is not available to the market and uses that information to make a profit or avoid a loss.

Interestingly, Curtis has been charged with the offence of conspiring to commit insider trading rather than the doing of the act itself.  Unlike the insider trading laws, which are found in the Corporations Act 2001 (Cth), conspiracy is an offence under the Criminal Code Act 1995 (Cth).

Under the Criminal Code a person may be charged for conspiring with another person to commit an offence that is punishable by more than 12 months imprisonment. Insider trading is such an offence.
For a person to be found guilty of conspiracy:
  • the person must have entered into an agreement with one or more other persons
  • the person and at least one other party to the agreement must have intended that an offence would be committed pursuant to the agreement, and
  • the person or at least one other party to the agreement must have committed an overt act pursuant to the agreement. 

It is alleged that during May 2007 to June 2008, Curtis conspired with convicted insider trader John Hartman, a former equities dealer at Orion Asset Management Limited (Orion), to commit insider trading.

It is alleged that Curtis and Hartman had an agreement whereby Hartman would procure Curtis to trade based on inside information possessed by Hartman about Orion’s trading intentions.  In return, Curtis provided Hartman with a share of the profits from the trade.

Pursuant to this agreement, Curtis allegedly traded on 45 separate occasions and made a profit of approximately $1.4 million.

If Curtis is found guilty, he faces the same penalty as if he had committed insider trading.  At the time of the alleged offence, the maximum penalty was imprisonment for 5 years and/or a fine of $220,000.

Lawyer
+61 7 3233 8807
nhamrosi@mccullough.com.au

1 comment:

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