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Monday 20 June 2022

22-149MR Caloundra man sentenced for insider trading

Mr Jin Xi Li, of Caloundra, Queensland, has been sentenced to nine months imprisonment for insider trading. The Court ordered Mr Li be released forthwith on recognisance upon the condition that he be of good behaviour for a period of two years. 

Mr Li traded in Contracts for Difference (CFD) of PanAust Limited (ASX: PNA) while he was in possession of inside information regarding a takeover bid for PanAust by Guangdong Rising H.K (Holding) Limited (GRAM) (17-390MR). He made $343,000 profit as a result of his criminal conduct.  

ASIC Deputy Chair Sarah Court said ‘This outcome demonstrates the criminal consequences that come from using inside information to trade on Australia’s financial markets. Investigating and pursuing insider trading is an enduring priority for ASIC to ensure our markets are strong and fair.’ 

In sentencing, Judge Rinaudo said Mr Li ‘took an unfair advantage when trading, and having regard to the principles of general and specific deterrence, a term of imprisonment is the appropriate sentence.’ 

In April 2014, GRAM made a takeover bid for PanAust which did not eventuate. Less than a year later, Mr Li contacted an acquaintance in China to assist him to determine whether it was possible GRAM would make another takeover bid for PanAust. The contact confirmed that loan documents were being prepared for GRAM to obtain finance for another takeover bid and later confirmed a contract would be signed.  

Prior to the announcement made by PanAust on 30 March 2015 regarding the takeover bid, Mr Li: 

  • acquired 390,000 PanAust CFDs between 19 March 2015 and 26 March 2015; and
  • procured his wife to acquire 265,000 PanAust CFDs between 22 March 2015 and 26 March 2015.

Mr Li had previously pleaded guilty to the two insider trading charges (22-010MR). 

The Commonwealth Director of Public Prosecutions prosecuted the matter after a brief and referral from ASIC. 

Last updated: 20/06/2022 12:13