33-year old Sydney man Fei Yu has pleaded guilty to insider trading in the District Court of New South Wales.

On 11 March 2016, Mr Yu pleaded guilty to one charge of insider trading, with a second charge of insider trading to be taken into account on sentence.

Mr Yu procured the acquisition of shares and contracts for difference (CFDs) in Veda Advantage Limited (Veda) in January 2007 while he possessed inside information about a proposed takeover of Veda by Pacific Equity Partners.  The accounts used to acquire the shares and CFDs were held in the name of Mr Yu’s mother and an associate.

Mr Yu received the inside information from a close friend, Mr Bo Shi Zhu, who was an executive in the corporate finance advisory division of Caliburn Partnership Pty Ltd (now Greenhill & Co, Inc) who were advising Veda regarding the proposed takeover.

Mr Yu invested approximately $35,000 in Veda shares and CFDs and made more than $20,000 in profit from the trades.

The matter has been adjourned until 21 July 2016 for a sentencing hearing.

The Commonwealth Director of Public Prosecutions is prosecuting the matter.

Background

On 12 August 2014, Mr Yu appeared before court charged with eight counts of insider trading, following an ASIC investigation (refer: 14-197MR).

The alleged insider trading was identified by ASIC’s market surveillance team and referred to ASIC’s markets enforcement team for investigation and enforcement action.

The maximum penalty for the alleged offence at the time it was committed was 5 years jail and/or a fine of $220,000. For offences committed on or after 13 December 2010, the maximum penalty increased to 10 years jail or a fine of $495,000, or both.

Editor's note 1:

On 21 July, the sentencing hearing was adjourned until 15 November 2016.