A mining managing director was involved in an insider trading case that belongs “in the most serious category in all the circumstances,” NSW Supreme Court judge Peter Hall has heard.
Prosecutor Robert Bromwich made the remark of former Hanlong Mining director Steven (Hui) Xiao, who pleaded guilty to three charges of insider trading on September 2.
Xiao is said to have made 102 illegal trades in shares and contracts for difference (CFDs) in two companies with which Hanlong Mining was conducting takeover discussions. The companies were uranium explorer Bannerman Resources and Sundance, which is based in Perth.
A Chinese national, Xiao was extradited to Australia on October 10 2014 after his arrest in Hong Kong in January that year. He now faces a potential maximum 10 year jail term for each count.
Although others were also involved in the same insider trading acts, the prosecution has argued that this did not diminish Xiao’s breach of trust.
“There’s simply no evidence the controllers of the parent or subsidiary companies knew what was going on,” Bromwich said.
“That a number of individuals knew does not diminish the breach of trust, it worsens it because it means there are a number of people working in concert against the interests of the company.”
While Xiao’s involvement in insider trading is not in question, the prosecution and his defence are debating the severity of his crime, and what the resulting punishment should be.
The prosecution compared Xiao’s case to that of Lukas Kamay, the former National Australia Bank employee who back in March 2015 received the heaviest sentence yet brought down for insider trading.
Kamay was sentenced to seven years and three months in jail back in March, with a non-parole period of four-and-a-half years.
Xiao’s defence barrister, Malcolm Ramage, said it was “an exaggeration to say this is approaching the worst case.”
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