Former Vanguard portfolio manager jailed
A former Vanguard Investment Australia Ltd portfolio manager will serve at least eight months in jail after pleading guilty to personally profiting from trades he made at the expense of Vanguard.
Mark Hildebrandt admitted placing orders of the Bourse de Montreal for futures contracts based on the Canadian S&P/TSX60 Index on behalf of Vanguard, whilst also placing opposite, but substantially matching orders for the same futures contracts on his personal trading account, following an investigation by the Australian Securities and Investments Commission (ASIC).
The Supreme Court of Victoria heard that Hildebrandt made the trades over the course of 63 days between May and December 2010, which enabled him to make a personal profit of approximately $630,000 at the expense of Vanguard's registered schemes.
Justice Karin Emerton sentenced Hildebrandt to 22 months imprisonment, to be released after serving eight months on a recognisance of $500 to be of good behaviour for 12 months.
"A custodial sentence is the only appropriate sentence having regard to the need for general deterrence and the moral culpability exhibited by your offending, which involved repeated instances of dishonesty over a protracted period of time and a significant breach of trust," Justice Emerton said.
Justice Emerton said Hildebrandt could have faced a 37 month sentence had he not pleaded guilty to the offences.
ASIC Commissioner, Cathie Armour, said the case showed the vigour with which the regular would pursue those who fail to uphold their duties and act illegally for personal gain.
"ASIC's investigation in this matter was complex and far-reaching, extending to a number of overseas jurisdictions, but demonstrates our commitment to pursuing wrongdoing," she said.
Mr Hildebrandt has since repaid Vanguard $575,000.
Recommended for you
As ASIC chair Joe Longo pushes firms to prepare for the upcoming mandatory climate disclosure regime, what skills are necessary if firms are looking to expand their ESG teams?
First Sentier Investors has announced it will close four of its Australian investment teams amid a simplification of the business, with $14 billion expected to be returned to investors.
Over 90 finalists have been chosen to compete at the 36th annual Fund Manager of the Year Awards, to be held in Sydney on 13 June.
Clients may be asking their adviser whether there is still value in the US technology names after their rally, but Fidelity International’s Lukasz de Pourbaix believes they can still offer upside.
