A Victorian man has been sentenced to 18 months’ imprisonment for insider trading linked to the 2019 takeover of Kidman Resources Limited by Wesfarmers Limited, but will be released immediately on a recognisance.
Duncan Stewart, of Armadale, pleaded guilty on 22 August 2024 to buying $130,635.87 worth of Kidman shares on 3 and 10 April 2019 while in possession of confidential information about a proposed Wesfarmers acquisition, prior to the information being made public. After Kidman announced the deal on 2 May 2019, he sold his holding, realising a profit of about $64,975.48.
Under the sentence, Stewart is to be released forthwith upon entering into a $10,000 recognisance to be of good behaviour for two years, conditional on paying a penalty of $64,975.48.
He also admitted being privy to a separate, confidential bid for Kidman from Chile’s Sociedad Química y Minera de Chile in March 2019 and encouraging a family member to buy shares while in possession of that information. He was not sentenced for this conduct, but it was taken into account by the court.
ASIC Deputy Chair Sarah Court said, ‘Insider trading is a serious corporate crime. A sentence of imprisonment is the most severe penalty a court can order and, in this case, is coupled with a financial penalty, automatic directorship disqualification for 5 years, and the general consequences of having a criminal record.
‘When someone exploits inside informational to gain a financial advantage, the rest of the market unfairly miss out on gaining a profit or avoiding a loss. This crime affects all Australians’ investments in the share market and in their super funds.’
Judge Manova said insider trading ‘shatters’ public confidence and undermines the integrity of Australia’s financial markets. Her Honour indicated that, without the guilty plea, she would have imposed a term of two years and three months with release after serving two months, followed by three years on a good behaviour order.
ASIC has named stronger insider trading enforcement as a priority for 2025 and, in late 2024, established a new criminal investigation taskforce to bolster resources and expertise in such cases. The prosecution was conducted by the Office of the Director of Public Prosecutions (Cth).
Stewart first appeared on the charges on 24 August 2023. At the time of the offending in April 2019, insider trading carried a maximum penalty of 15 years’ imprisonment and a potential fine of up to $945,000.
