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Aussie Court Sends CFDs Trader to Prison for Insider Trading

An Australian court has sentenced an Aussie man to nine months imprisonment for insider trading with contracts for differences (CFDs) contracts, the Australia Australian Securities and Investments Commission (ASIC) announced on Monday.

Jin Xi Li, a resident of Queensland, traded CFDs of PanAust Limited when he had insider information about an upcoming takeover bid for the company by Guangdong Rising H.K (Holding) Limited (GRAM).

The sentencing came after Li pled guilty to the charges of insider trading.

“[He] ‘took an unfair advantage when trading, and having regard to the principles of general and specific deterrence, a term of imprisonment is the appropriate sentence,” Judge Rinaudo stated in the sentencing.

Prior to the official announcement of the takeover bid, Li bought 390,000 PanAust CFDs between 19 March 2015 and 26 March 2015 and also procured his wife to acquire 265,000 PanAust CFDs between 22 March 2015 and 26 March 2015.

The company publicly announced the takeover bid on March 30, 2015.

He made a total profit of AU$343,000 from the trade.

The Insider Information

GRAM first takeover bid for PanAust in April 2014 did not materialize. Li received insider information when he contacted an acquaintance in China for assistance in determining whether a second bid from GRAM is possible. He then received confirmation that GRAM is already preparing the finance for another takeover bid.

Commenting on the court judgment, ASIC Deputy Chair Sarah Court said: “This outcome demonstrates the criminal consequences that come from using inside information to trade on Australia’s financial markets. Investigating and pursuing insider trading is an enduring priority for ASIC to ensure our markets are strong and fair.

Meanwhile, ASIC also fined another former Queensland-based financial adviser AU$1,500 for branching a banning order. He was banned from providing financial services for seven years, but he continued to offer such services.

An Australian court has sentenced an Aussie man to nine months imprisonment for insider trading with contracts for differences (CFDs) contracts, the Australia Australian Securities and Investments Commission (ASIC) announced on Monday.

Jin Xi Li, a resident of Queensland, traded CFDs of PanAust Limited when he had insider information about an upcoming takeover bid for the company by Guangdong Rising H.K (Holding) Limited (GRAM).

The sentencing came after Li pled guilty to the charges of insider trading.

“[He] ‘took an unfair advantage when trading, and having regard to the principles of general and specific deterrence, a term of imprisonment is the appropriate sentence,” Judge Rinaudo stated in the sentencing.

Prior to the official announcement of the takeover bid, Li bought 390,000 PanAust CFDs between 19 March 2015 and 26 March 2015 and also procured his wife to acquire 265,000 PanAust CFDs between 22 March 2015 and 26 March 2015.

The company publicly announced the takeover bid on March 30, 2015.

He made a total profit of AU$343,000 from the trade.

The Insider Information

GRAM first takeover bid for PanAust in April 2014 did not materialize. Li received insider information when he contacted an acquaintance in China for assistance in determining whether a second bid from GRAM is possible. He then received confirmation that GRAM is already preparing the finance for another takeover bid.

Commenting on the court judgment, ASIC Deputy Chair Sarah Court said: “This outcome demonstrates the criminal consequences that come from using inside information to trade on Australia’s financial markets. Investigating and pursuing insider trading is an enduring priority for ASIC to ensure our markets are strong and fair.

Meanwhile, ASIC also fined another former Queensland-based financial adviser AU$1,500 for branching a banning order. He was banned from providing financial services for seven years, but he continued to offer such services.

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