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16-202MR Insider trader sentenced to full time imprisonment
Former banker, 30-year-old Oliver Curtis was today sentenced to two years imprisonment after being found guilty by a Supreme Court jury earlier this month of conspiring to commit insider trading with his former best friend, John Hartman. The Court ordered that Curtis be released after serving one year of imprisonment upon him entering into a recognisance to be of good behaviour for 12 months.
Curtis used confidential information between May 1 2007, and June 30 2008 to trade on shifts in share prices—ultimately resulting in a total net profit of $1,432,228.85.
The conspiracy involved an agreement between Curtis and Hartman, that Hartman would procure Curtis to trade in Contracts for Difference (‘CFDs’) (a financial product), when Hartman held inside information about the trading intentions of his employer Orion Asset Management Limited.
Hartman agreed to provide Curtis with instructions (informed by the inside information Hartman held) to engage in CFD trading that the pair expected to be profitable. They further agreed that the instructions would be provided by way of the Blackberry to Blackberry communication system known as ‘pinning’.
It was alleged that on 45 occasions Curtis traded in CFDs after he received instructions from Hartman. The 45 sets of trades occurred at around the same time as Orion’s trading in the underlying stock.
In return for providing trading instructions, Curtis provided Hartman with a share of the profits in the form of cash and by using the funds to purchase items for Hartman.
The Australian Securities and Investment Commission (ASIC) launched its investigation in 2009 and their conspiracy was exposed when Hartman confessed his crime to ASIC.
In passing sentence, Justice McCallum stated, '… punishment by a sentence of imprisonment has real bite as a deterrent to others in the case of white-collar crime. … The threat of being sent to gaol, provided it is perceived as a real threat and not one judges will hesitate to enforce, is likely to operate as a powerful deterrent to men and women of business.'
Sarah McNaughton SC, Commonwealth Director of Public Prosecutions said close collaboration with ASIC investigators was paramount in ensuring the offender was brought to justice.
'Insider trading is a serious crime—deliberate, planned and unlawful conduct for personal gain', said McNaughton.
'There are very serious penalties involved for those who cheat. As this case clearly demonstrates, this conduct can result in significant terms of imprisonment' added McNaughton.
Federal Prosecutors worked very closely with ASIC investigators in successfully prosecuting the matter.
ASIC Chairman Greg Medcraft said 'ASIC is serious about market misconduct and this matter reinforces ASIC's commitment to pursue complex insider trading cases no matter how long they take and how vigorously they are defended.'
'ASIC appreciates the hard work done by the CDPP and our strong working relationship was critical in bringing the case to this point.'
Hartman had been prosecuted by the CDPP in 2010 and 2011 for a number of charges arising from his own insider trading, as well as communicating inside information to Curtis. Following an appeal against his sentence, Hartman was ultimately sentenced to an overall period of imprisonment of three years, to be released after serving 15 months, upon entering into a recognizance to be of good behaviour for 18 months, with a number of other conditions.. That sentence included a discount for Hartman’s undertaking to provide assistance to authorities in testifying against Curtis.
CDPP Media Contact: firstname.lastname@example.org or 02 6206 5708
ASIC Media Contact: email@example.com or 1300 208 215
Oliver Peter Curtis was convicted and sentenced in relation to:
- One count of conspiracy contrary to sub-section 11.5(1) of the Criminal Code (Cth) to commit an offence, being the contravention of the sub-sections 1311(1) and 1043A(1)(d) of the Corporations Act 2001 (Cth).
The offence carried a maximum penalty of imprisonment for 5 years and/or a fine of $220,000.
For insider trading offences committed since 13 December 2010, the maximum penalty has increased to 10 years imprisonment and/or a fine of $495,000 or three times the value of the benefits attributable to the commission of the offence (whichever is greater).
Since 2011, 35 persons have been criminally prosecuted for insider trading by the CDPP as a result of ASIC investigations, with a conviction rate of over 85%.
About the CDPP:
The Office of the Commonwealth Director of Public Prosecutions (CDPP) is an independent prosecution service established by Parliament to prosecute alleged offences against Commonwealth law that are referred by agencies, including the Australian Securities and Investment Commission. The CDPP aims to provide an effective, ethical, high quality and independent criminal prosecution service for Australia in accordance with the Prosecution Policy of the Commonwealth.
On 14 July 2016, Mr Curtis filed a Notice Of Application For Leave to Appeal against conviction. The application is listed for callover in the NSW Court of Criminal Appeal at 9:00 am on 21 July 2016.
Editor's Note 2:
Mr Curtis' application for leave to appeal against his conviction will be heard by the NSW Court of Criminal Appeal on 19 October 2016.
Editor's note 3:
On 19 October 2016, the NSW Court of Criminal Appeal heard Mr Curtis' application for leave to appeal against his conviction. Judgement was reserved.
Editor's note 4:
On 16 December 2016, Mr Curtis' appeal against conviction was dismissed.