Former Northern Star Resources director Peter Charles Pritchard Farris today was sentenced for insider trading.
Appearing before the Supreme Court of Western Australia, Mr Farris, of the Perth suburb of Karrinyup, was sentenced to a total of 2 years and 9 months imprisonment, fully suspended. In addition, Mr Farris was fined $65,000 by way of a pecuniary penalty order. Mr Farris also consented to forfeiting the amount of the loss which he avoided by trading at the time and in the manner he did.
ASIC Commissioner John Price said, ‘Insider trading harms market integrity. The law has high expectations of people in positions of trust such as company directors, who receive price sensitive information.
‘ASIC has the people, the systems and the power to take action against this misconduct.’
Since 2009, 38 persons have been prosecuted for insider trading as a result of ASIC investigations, with a success rate of 82% (28 convictions) in the 34 cases in which liability has been determined (4 persons are currently awaiting trial).
The Commonwealth Director of Public Prosecutions prosecuted the matter.
Background
In October 2014, Mr Farris pleaded guilty to two counts of insider trading relating to sale of 750,000 Northern Star shares between 28 and 29 November 2012 but disputed the facts of the matter (refer: 14-186MR).
Following a hearing in May 2015 to determine the question of Mr Farris’ level of knowledge at the time of the trades, specifically, whether Mr Farris knew or ought reasonably to have known that the information he possessed was inside information, the Court found Mr Farris traded when he knew that the information he possessed was inside information.
Mr Farris had traded prior to an Australian Securities Exchange announcement by Northern Star on 30 November 2012 that revealed its major shareholder at the time, InvestMet Limited, as well as Northern Star’s managing director, chairman and a non-executive director had conducted a sell down of their Northern Star shares. The transaction involved the sale of 37 million Northern Star shares at a discounted price of $1.35 per share.
Mr Farris was a director of Northern Star and InvestMet at the time of the announcement. As a result of the trades, Mr Farris avoided a loss of $123,975.