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Former director sentenced for insider trading

by Martha.Ware 27. June 2011 09:11

Former director of WHL Energy Ltd (WHL), Dr Jeffery James Bateson, has been sentenced to a term of two years imprisonment to be served by way of an Intensive Correction Order after pleading guilty to one charge of insider trading brought by ASIC. Dr Bateson was also fined $70,000.

Dr Bateson appeared in the Supreme Court of New South Wales on 24 June 2011. On sentencing, Justice Buddin noted that Dr Bateson had entered a plea of guilty at the earliest opportunity.

As a result of his conviction for this offence, Dr Bateson is automatically disqualified from managing a corporation for a period of five years.

ASIC had alleged that between 11 and 16 May 2008, Dr Bateson acquired 550,000 shares in WHL in the name of a self-managed superannuation fund of which he and his wife were the sole beneficiaries. Dr Bateson acquired the shares when he was in possession of price-sensitive information relating to a joint venture agreement proposal that WHL had not, at the relevant time, publicly announced.

Dr Bateson was a director of WHL (then known as Wind Hydrogen Ltd) at the time.

‘Investor confidence in our markets is at the heart of ASIC’s market regulation agenda. ASIC has recently increased its focus on insider trading and market manipulation, successfully prosecuting eleven individuals since 1 January 2009
with another 12 individuals currently before the Courts. ASIC is currently investigating a further 62 cases of alleged markets offences’, ASIC Commissioner, Shane Tregillis, said.

The matter was referred to ASIC by the Australian Securities Exchange and was prosecuted by the Commonwealth Director of Public Prosecutions (CDPP).

Background

1. Since 1 January 2009, ASIC and the CDPP have successfully prosecuted the following matters in relation to insider trading or market manipulation:

NameOffenceDate
Andrew Dalzell Insider Trading 23 May 2011
Oswyn de Silva Insider Trading 31 March 2011
Tamara Newing Market Manipulation 18 January 2011
John Hartman Insider Trading 2 December 2010
Noel Stephenson Insider Trading 20 July 2010
Newton Chan Market Manipulation 13 July 2010
John O'Reilly Insider Trading 16 April 2010
Geoffrey Newing Market Manipulation 18 March 2010
Mukesh Panchal Insider Trading 27 April 2009
Rocco Musumeci Market Manipulation 16 February 2009
Richard Wade Market Manipulation 16 February 2009


In all but one of these matters, the offenders were sentenced to terms of imprisonment. Five of these offenders served, or are currently serving, jail terms of between four months and three years.

2. Intensive Correction Orders were introduced recently in New South Wales and have replaced periodic detention as a sentencing option. An Intensive Correction Order can only be made when the offence is a serious one and a sentence of imprisonment up to two years is appropriate.

3. Further information about ASIC’s three outcomes for markets, including our deterrence of market misconduct, is outlined in
a speech given by ASIC Commissioner, Shane Tregillis, to the Stockbrokers Association of Australia Conference on 26 May 2011.

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