ASIC: Former Investment Bank Employee And Friend Sentenced For Insider Trading

A former JP Morgan Chase employee and her friend have been sentenced for engaging in an insider trading scheme that netted over $24,000.

Ms Elisa Rietbergen, of Kensington, NSW, and Mr Joseph Levi, of Surry Hills, NSW, were today each sentenced by the District Court of New South Wales to 18 months imprisonment, to be released immediately on their own recognizance in the sum of $1,000, to be of good behaviour for two years.

In December 2011, Ms Rietbergen, 38, formerly a relationship services associate with JP Morgan Chase Bank N.A., and Mr Joseph Levi, 39, of Surry Hills, NSW each pleaded guilty to insider trading charges brought by ASIC.

The charges related to inside information concerning the acquisition of Valad Property Group Limited by affiliates of the Blackstone Group L.P. announced on the Australian Securities Exchange on 29 April 2011.

The charge brought against Ms Rietbergen involved tipping Mr Levi with inside information she gained while with JP Morgan between about 21 and 27 April 2011. In sentencing Ms Rietbergen, the Court took into account her admission of procuring Mr Levi’s acquisition of Valad securities on 27 April 2011.

The charge brought against Mr Levi involved the acquisition of 40,000 Valad securities on 27 April 2011 while in possession of the inside information he received from Ms Rietbergen. In sentencing, the Court took into account Mr Levi’s admission of encouraging his father, Mr Eli Levi to also acquire Valad securities. Mr Eli Levi acquired 20,000 Valad securities on 27 April 2011. It was not alleged that Mr Eli Levi was criminally involved.

In March 2012, Mr Levi forfeited $24,280.28 to the Commonwealth under the Proceeds of Crime Act 2002. This was the net post-tax benefits derived from the trading Mr Levi conducted and procured.

ASIC Deputy Chairman, Belinda Gibson said the result illustrated ASIC’s commitment to taking action against gatekeepers in the financial sector who acted dishonestly.

‘Industry insiders have important responsibilities to act honestly, diligently and competently - not least, corporate advisers who must not take their client’s confidential information and use it for their own benefit. Those who fail to take these responsibilities seriously risk the prospect of a criminal conviction.’

Ms Gibson added, ‘Today’s outcome shows ASIC’s sustained commitment to fighting insider trading in Australia’.

ASIC has prosecuted 24 individuals in relation to insider trading since January 2009. Of those, 14 have been successfully prosecuted, with ten cases now finalised and a further four awaiting sentencing. Two have been unsuccessful and a further eight defendants are awaiting trial and will contest their charges.

‘We’ve put more resources and energy into fighting insider trading and our determination is paying dividends as shown with another conviction today.

‘As I’ve said before, my message to the business community is simple: insider trading will not be tolerated. ASIC has the systems, the people and the powers to detect and prosecute breaches.’

The charges arise out of an ASIC investigation which commenced in June 2011. ASIC’s Market Surveillance team identified the alleged insider trading in May 2011.

ASIC acknowledges the assistance of Blackstone Group LP, Valad Property Group Limited, National Australia Bank and JP Morgan in relation to this matter.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.