ASIC action results in jail sentences
Action initiated by the Australian Securities and Investments Commission has seen two former industry players receive custodial sentences, with one commuted to a good behaviour bond.
John Hartman from NSW and Barry Patrick from Victoria were sentenced to prison in separate actions prosecuted by the Director of Public Prosecutions.
Hartman, a former employee of Orion Asset Management, has been sentenced to four years and six months imprisonment on 25 charges related to insider trading.
Hartman admitted to establishing positions in particular stocks through his contracts for difference (CFD) account at IG Markets prior to Orion trading in the same stocks on the open market. According to ASIC, he was then able to exit his CFD positions and profit from the effect of Orion’s trading on the underlying stock price — conduct often referred to as ‘front-running’.
Trades made by Hartman resulted in a total gross profit of approximately $1.59 million. He will have to spend a minimum of three years in jail before becoming eligible for parole.
Patrick’s four-month prison sentence was wholly suspended with a requirement to enter a five year, $10,000 good behaviour bond after he pleaded guilty to operating without an Australian Financial Services Licence and managing a corporation while disqualified.
According to the regulator, between August 2003 and December 2006, he induced approximately 40 investors to invest in three property development schemes, raising approximately $6.5 million in total.
None of the investors have been repaid.
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