Perth business executive Steve Noske faces the possibility of a gaol term after being found guilty and convicted on one count of insider trading in takeover target Westside Corporation.
The conviction was recorded yesterday after a two week trial before a jury in the WA Supreme Court.
The charge related to the acquisition of 750,000 WestSide Corporation shares between 6 and 10 February 2012.
The Australian Securities and Investments Commission alleged Mr Noske was in possession of inside information relating to a proposed takeover bid by ASX-listed Liquefied Natural Gas Limited at the time he traded.
Mr Noske was alleged to have come into possession of the inside information while he was being consulted by LNG’s then managing director Maurice Brand on some aspects of the proposed deal.
At the time, both Perth-based LNG and Brisbane-based Westside were pursuing development opportunities tied to coal seam gas projects in Queensland.
Mr Noske’s former employer, Mitsui & Co, held a 49 per cent interest in Westside’s main CSG assets.
The price of WestSide shares increased by nearly 60 per cent following the announcement of the proposed takeover, earning Mr Noske a profit of $182,430.
At the time of the insider trading, Mr Noske was managing director of Perth-based WHL Energy, which paid him a cash income of $598,000 in the year to June 2012.
ASIC Commissioner John Price said Mr Noske's conviction was a timely reminder for professionals who come into possession of market-sensitive information as a result of their work to take particular care in how they communicate and act upon such information.
“Trading in shares while in possession of inside information is a criminal offence,” he said in a statement.
“ASIC has the systems and expertise to detect and pursue insider trading, even where the subject matter is commercially complex, and will ensure those who flout the law are brought to account.”
Mr Noske has been bailed to appear for a sentencing hearing in the Supreme Court on 20 April.
He faces a maximum penalty of up to 10 years’ imprisonment and/or a fine of up to three times the value of the profit he obtained, which would be $547,290.
