A former executive vice president of BG Group plc, a large international gas company, has today been jailed for insider trading following an ASIC investigation.
New South Wales Supreme Court Justice Lucy McCallum sentenced Dr Stuart Alfred Fysh to two years imprisonment and ordered he spend at least 12 months in prison before being eligible for parole.
On 14 November 2012, after a four week trial, a jury found Dr Fysh guilty of two counts of insider trading. The charges against Dr Fysh related to his purchase of 250,000 shares in Queensland Gas Company (QGC) in December 2007. The jury found that Dr Fysh had been in possession of inside information relating to BG Group’s interest in QGC at the time he purchased the shares. BG Group and QGC announced an A$870 million strategic alliance in February 2008.
Dr Fysh purchased the QGC shares at an average price of $3.19 per share. In November 2008, he sold 250,000 shares in QGC at $5.75 per share for a total amount of $1,437,500, resulting in a net profit of $640,000.
Dr Fysh was ordered to pay a pecuniary penalty order in the amount of $640,857.18 as a result of separate proceedings conducted by the Australian Federal Police under the Proceeds of Crime Act 2002.
Dr Fysh will also be disqualified from managing a corporation in Australia, including acting as director of a company, for a period of five years from the date of his release from prison, pursuant to section 206B of the Corporations Act.
ASIC Deputy Chairman, Belinda Gibson said the jailing of Dr Fysh for up to two years should send a solemn warning to the corporate community that using inside information for personal gain is a serious offence that cannot be tolerated.
‘The jailing of Dr Fysh reflects the very serious consequences of insider trading. ASIC will continue to use its systems, people and powers to catch insider traders and to achieve fairness in the marketplace’, Commissioner Gibson said.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
Dr Fysh has filed a notice of intention to appeal against his conviction.
Insider trading actions
Since 1 January 2009, ASIC has prosecuted 26 insider trading actions. Of those, 16 have been successfully prosecuted, comprising 12 matters finalised and four guilty pleas where the individuals are awaiting sentencing. Eight individuals are awaiting trial and are contesting their charges. Two matters have been unsuccessful.
Background
Dr Fysh was convicted and sentenced for insider trading, contrary to section 1043A(1) of the Corporations Act. The maximum penalty for each offence at the time of the offending was five years imprisonment and/or a $20,000 fine. The maximum penalty has since been increased to 10 years imprisonment and/or a $495,000 fine.
Refer to ASIC’s statement MR12-280 Former BG executive guilty of insider trading for further details relating to this matter.
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ASIC: Former BG Executive Jailed For Insider Trading
Date 19/12/2012
