ASIC alleged that between 20 December 2006 and 26 April 2007, Mr de Silva, while employed as a portfolio manager and associate director for Macquarie Investment Management Ltd (MIML), acquired shares and contracts for difference (CFDs) in respect of the following entities listed on the Singapore Exchange while possessing inside information:
- Ascendas Real Estate Investment Trust
- The Ascott Group Ltd
- Hong Kong Land Holdings Ltd
- Yanlord Land Group Ltd
- Gallant Venture Ltd
- CDL Hospitality Trusts
- Hotel Properties Ltd
- Mapletree Logistics Trust
At the time he acquired the shares and CFDs, Mr de Silva knew that MIML intended to acquire large volumes of the same securities and knew, or ought reasonably to have known, that MIML’s acquisitions would be likely to cause the price of the securities, and the value of the CFDs, to increase. Shortly after acquiring the securities and CFDs he disposed of them for substantial profits, often selling the securities directly to MIML. This type of insider trading is commonly known as ‘front running’.
The gross profit made by Mr de Silva from the insider trading was AUD$1,412,975.
The charge carries a maximum penalty of five years’ imprisonment, a $220,000 fine, or both.
Mr de Silva did not apply for bail and the matter returns to the Central Local Court on 29 September 2010.
ASIC’s civil penalty proceedings against Mr de Silva in the Supreme Court of New South Wales have been automatically stayed as a result of this criminal action.
The matter was initially referred to ASIC by the Monetary Authority of Singapore (the MAS) and ASIC acknowledges the ongoing assistance of the MAS during its investigation. ASIC also acknowledges the assistance of Macquarie Bank during its investigation.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.
Background
On Friday 26 February 2010, ASIC obtained ex-parte orders from the Supreme Court of New South Wales restraining Mr de Silva from leaving or attempting to leave Australia.
On 1 March 2010, Mr de Silva attempted to leave Australia from Perth but was stopped by the Australian Federal Police. Mr de Silva ultimately pleaded guilty to a charge of being in contempt of the court’s orders.
On 24 March 2010, Mr de Silva was sentenced to nine months imprisonment with a non-parole period of six months for contempt of court.
