The former managing director of a listed company has been found guilty on two counts of insider trading and faces the prospect of up to 10 years behind bars.
ASIC investigated the actions of South Australian man Darren James Lind, who in 2014 had been the managing director of listed mining company Golden Fields Resources.
The company had a joint venture with Minotaur Exploration to explore for copper-gold at its Eloise Project site at Cloncurry in Queensland.
ASIC launched legal action against Mr Lind, alleging that he “came into possession of inside information” during a meeting with Minotaur on 25 July 2014 and used this to his advantage to trade in Minotaur shares.
Days later on 31 July 2014, an ASX announcement of a discovery of copper-gold at the site saw Minotaur’s share price almost double in value.
Mr Lind was charged in July 2016, but was only committed to stand trial in June last year, and that trial took place this month.
Following the two-week trial, the District Court of South Australia found Mr Lind guilty of two counts of procuring another person to purchase financial products whilst in possession of inside information.
According to ASIC, Mr Lind is currently on bail, and will be sentenced on 27 September 2018. He could face as much as 10 years in jail or a hefty fine equivalent to three times of the total value of benefits obtained for each of the two charges.
According to an information leaflet by the Australian Institute of Company Directors, insider trading is “the trading of securities [shares] or a wider set of financial products while in possession of information which is not generally available; and if it were, would be likely to have a material effect on the price of value of the security.”
The institute notes that “insiders can be anyone and they do not have to be directly related to the company. However, because of their roles, directors are more likely to be in possession of inside information, so they need to exercise great care”.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
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