Harts director charged with insider trading
Former Harts Australasia executive director Maxwell John Sweetman appeared in the Brisbane Magistrates Court today after being charged with two counts of insider trading.
TheAustralian Securities and Investments Commission(ASIC) alleges that Sweetman, responsible for Harts finance and administration-related activities, contravened the insider trading provisions of the Corporations Act when he sold 350,000 Harts Australasia shares on January 8 and 9 2001.
Soon after, on January 25 2001, Harts announced an anticipated before-tax loss of $9.7 million to theAustralian Stock Exchange.
Sweetman is not the first Harts executive to face criminal charges - founder and former executive chairman Steve Hart was arrested and charged with 11 counts of tax-related fraud in October 2001.
Harts exited the financial services industry in disgrace after ASIC applied to have the company liquidated in October 2001, and revoked the group’s securities licence the following month.
With losses of around $93 million in the preceding 12 months, the Harts group was then split up with its 36 subsidiaries, including First Mortgage Corporation andHarts Securities, wound up or sold off.
Liquidators John Greig and Robert Duff ofDeloitte Touche Tomatsupresented a report to the Federal Court during the liquidation which stated that the company may have been trading while insolvent, and recommended a further investigation into Harts and its directors.
ASIC’s investigation into the collapse of Harts is continuing, and Sweetman will appear in court again on August 1.
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