Duncan Stewart, of Armadale, Melbourne has today appeared at the Melbourne Magistrates’ Court charged with multiple insider trading offences in connection with share market purchases made in Kidman Resources Ltd in 2019.
ASIC alleges that Mr Stewart engaged in insider trading on two occasions in April 2019, when he purchased shares in Kidman Resources while in possession of inside information regarding a proposal by Wesfarmers Ltd to acquire Kidman Resources prior to this information being announced to the market.
ASIC further alleges that Mr Stewart procured another person to commit insider trading on two occasions in March and April 2019, by encouraging a family member to buy Kidman Resources shares while in possession of confidential information about the Wesfarmers proposal and a second, earlier takeover offer that had been considered by the company.
When the Wesfarmers proposal was announced to the market on 2 May 2019, Kidman Resources’ share price jumped from $1.29 to $1.84. ASIC alleges this resulted in Mr Stewart realising profits of $68,114.
Kidman Resources was ultimately acquired by Wesfarmers in September 2019 in a deal worth $776 million. It was subsequently delisted from the ASX and is now known as Australian Light Minerals Pty Ltd.
The matter is next listed for mention at the Melbourne Magistrates Court on 4 December 2023.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions following a referral from ASIC.
Background
Trading while in possession of inside information is an offence under section 1043A(1) of the Corporations Act.
Procuring another to trade while in possession of inside information is an offence under section 1043A(1)(d) of the Corporations Act.
At the time of the offending, each breach of s1043A of the Corporations Act carried a maximum penalty of either 10 or 15 years imprisonment due to an increase in the penalties for insider trading between the dates of the alleged offences.
Editor's note 1:
On 4 December 2023, the matter was listed for a committal hearing to commence on 28 May 2024, for three days.