Former company director Steve Noske has been sentenced today to 18 months' imprisonment and fined $20,000 after being found guilty early this month of insider trading in takeover target Westside Corporation.
The Supreme Court ordered that Mr Noske be released after serving nine months' of his sentence on a recognisance of $10,000, subject to good behaviour for the balance of the term.
As a result of this conviction, Mr Noske is also automatically disqualified from managing corporations for five years.
The charge related to the acquisition of 750,000 WestSide Corporation shares in February 2012.
Mr Noske purchased the shares while he was being consulted by the managing director of LNG Limited on that company's proposed takeover of WestSide Corporation.
The price of WestSide shares increased by nearly 60 per cent following the announcement of the proposed takeover.
Mr Noske's trading resulted in an actual profit of $51,246 but would have been significantly higher had he sold his entire holding shortly after the announcement.
The Australian Securities and Investments Commission began an investigation into Mr Noske's share trading in 2012, following a referral from ASIC's market surveillance team, and charged him with insider trading in 2015.
ASIC commissioner John Price said the custodial sentence confirmed the seriousness with which insider trading was viewed by the courts, and was a reminder of the significant obligations on those with access to market-sensitive information in the course of their work.
“ASIC's surveillance of the market, aided by sophisticated analysis and improved technology, means that anyone who attempts to profit from insider information runs a very real risk of being convicted and jailed,” he said in a statement.
Since 2009, ASIC has brought 41 insider trading actions before the courts and achieved either a conviction, guilty plea or guilty finding before a jury in 33 of these matters. Two matters are still before the courts.