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14-320MR Former Genetic Technologies CEO jailed for market manipulation
Former Genetic Technologies Ltd chief executive Dr Mervyn Jacobson was today sentenced to a total term of two years and eight months imprisonment after being convicted of manipulating the share price of GTG on the Australia Securities Exchange (ASX:GTG).
Dr Jacobson will serve 12 months in jail before being released on a recognizance release order to be of good behaviour for a period of 20 months.
Earlier this month Dr Jacobson was convicted on all 35 charges relating to his involvement in the manipulation of GTG shares over a six month period. Two of these charges involved Dr Jacobson conspiring with others to manipulate the GTG share price.
Dr Jacobson’s conviction and sentence follows an eight-week jury trial in the Supreme Court of Victoria where evidence was heard of Dr Jacobson’s actions to manipulate the GTG share price on the ASX to help him minimise and manage margin calls on loans totalling approximately $12 million (refer: 14-291MR).
In sentencing Dr Jacobson, Justice Stephen Kaye said the offences for which he had been convicted are serious, and ‘The express objective of section 1041A of the Corporations Act 2001 is to promote a fair, orderly and transparent market for registered securities. As part of that objective, section 1041A is directed to ensuring that the market price for registered securities truly reflects the genuine interaction of the forces of supply and demand for those securities on a free market. The conduct, in which you indulged, and to which you were a party was calculated to undermine that objective. In that way, your conduct had the capacity to erode the integrity of, and public confidence in, the securities market, and thereby to cause damage to members of the community, who have invested their savings in that market.’
ASIC Commissioner Cathie Armour said, ‘Today’s outcome reflects ASIC’s determination to take action against market misconduct and to protect the integrity of our financial markets.
‘This was a difficult case to investigate and prosecute and the result reflects ASIC’s markets enforcement capabilities. I also wish to acknowledge the prosecution team lead by the Commonwealth Director of Public Prosecutions for their role in this outcome’, Ms Armour said.
ASIC’s investigation into this matter followed a referral from the ASX. The Commonwealth Director of Public Prosecutions prosecuted this matter.
All of Dr Jacobson’s co-conspirators have previously been convicted and received sentences of imprisonment for their role in the conduct, following ASIC’s investigations.
In 2009 Rocco Musumeci was sentenced to a term of imprisonment of seven months, fully suspended, following pleas of guilty to three counts of market manipulation of GTG shares. He was released immediately on a recognizance order (refer: AD09-19).
In 2009 former ABN Amro client advisor Richard Wade was sentenced to a term of imprisonment of 15 months, fully suspended, following pleas of guilty to six counts of market manipulation of GTG shares. He was released immediately on a recognizance order (refer: AD09-19).
In March 2010 Geoffrey Edgar Newing was sentenced to 22 months imprisonment with a minimum period to serve of 6 months, following pleas of guilty to five counts of market manipulation of GTG shares (refer: AD10-58).
In February 2011 Tamara Newing was sentenced to a term of 21 months imprisonment, fully suspended, following pleas of guilty to 10 counts of market manipulation of GTG shares. She was released immediately on a recognizance order (refer: 11-30AD).