Russell Andrew Johnson, former director of former Saxo Bank A/S IB Sonray Capital Markets has been committed to six years imprisonment as a result of the company’s $46 million demise.
The series of events which led to the final sentencing of Russell Johnson, former director of Sonray Capital Markets, by the Australian authorities has finally concluded today, with the sentencing of Mr. Johnson to six years imprisonment for multiple offences, including false accounting, theft and deception and conspiracy to steal.
Sonray Capital Markets was one of the very first companies offering advice on Contracts for Difference (CFDs) to be regulated by the Australian Securities and Investments Commission (ASIC), having acquired its license in 2003. The company failed in 2010, owing more than $46 million.
Sonray Capital Markets had at previously been an introducing agent to Saxo Bank A/S, which provided its trading platform to Sonray Capital Markets. In February 2012, ASIC conducted an investigation focusing on the risk management practices of Saxo Bank A/S, subsequent to which additional licence conditions were applied to the AFS licence of Saxo Capital Markets (Australia) Pty Ltd.
Mr Johnson is the second person to be jailed following the collapse of Sonray. In October 2011, former CEO, Mr Scott Kenneth Murray, was sentenced to five years jail with a non-parole period of two years and six months for 10 charges brought by ASIC.
Mr Johnson, whose sentence was handed down by the Commonwealth Director of Public Prosecutions, will serve a minimum of three-and-a-half years before he is eligible for parole.
In sentencing Mr Johnson, Justice Macaulay said that the conduct engaged in was a serious example of the crimes charged, and that they had been committed with ‘a sophisticated degree of orchestration and planning’.
Chairman Greg Medcraft said, “The collapse of Sonray, which held millions of dollars in funds for several thousand clients, was in part due to the complete disregard of the law by senior members of the company.”
“Today’s sentence reinforces ASIC’s commitment to ensuring that company officers act at all times in the interests of a company. Where they fail to do so, the consequences will be significant.”
Client protection has become a matter of extreme importance for ASIC, insofar as circumstances such as this have almost no chance of occurring today, with strict capital adequacy requirements having been applied to firms over the last two years, plus the implementation of real-time surveillance by ASIC via two systems which notify the regulator on an ongoing basis of irregularities in procedure carried out by brokers.
This jail sentence demonstrates Australia’s commitment to ensuring that those who transgress face grave consequences, serving to uphold the region’s reputation as well organized financial markets center.