Australian financial services regulatory authority ASIC has reported that two Sydney men, including a former analyst with ratings agency Moody’s, were today convicted of insider trading.
In December 2014 Daniel Joffe, of Vaucluse, and Nathan Stromer, of Bondi, each pleaded guilty to two counts of insider trading.
Mr Joffe, in the course of his duties as an associate analyst with Moody’s, learned that two companies were going to be, or likely to be, subject to takeover bids. Mr Joffe passed this sensitive information to Mr Stromer who used this information to buy and sell shares and contracts for difference (CFDs) in the companies that were about to be, or likely to be, subject to takeover bids.
Appearing in the Supreme Court of NSW, Mr Joffe was sentenced to 27 months imprisonment. Mr Stromer was sentenced to 24 months imprisonment. Both sentences were fully suspended on the condition that they pay a $1,000 bond and be of good behaviour for 2 years. Mr Stromer also paid a pecuniary penalty order in the amount of $229,349.87.
ASIC Commissioner Cathie Armour said, ‘ASIC is committed to pursuing cases of insider trading and has the systems to effectively detect, analyse and investigate any form of misconduct that seeks to undermine confidence in our markets.’
In 2010, the maximum penalty for insider trading was doubled from five to 10 years imprisonment. In sentencing, Justice RA Hulme emphasised that Mr Joffe and Mr Stromer were subject to the former lesser maximum penalty.
ASIC laid charges in this matter in February 2010. The Commonwealth Director of Public Prosecutions prosecuted the matter.
Mr Stromer and Mr Joffe admitted that between 10 November and 14 November 2006 Mr Joffe received inside information relating to a proposed takeover of Alinta Infrastructure Holdings Limited (AIH) by Alinta Limited and passed this information to Mr Stromer who acquired 962,000 CFDs in AIH.
Mr Joffe has also admitted that between 20 September and 27 September 2006 he communicated inside information relating to upcoming price-sensitive announcements contemplated by the Australian Wheat Board Limited (AWB) to Mr Stromer and procured him to short sell 135,000 AWB CFDs.
For the official announcement from ASIC, click here.