A Victorian man has been sentenced to 11 months in prison and fined A$225,000 for insider trading in relation to Cann Group.
Last week, Dr Antonio Stella pleaded guilty to two counts of insider trading while in possession of information about an upcoming Cann Group share placement before it was publicly announced in July 2021.
The placement was intended to raise $20 million at a discount to the prevailing share price.
ASIC alleges that between July 19 and 20, 2021, Dr Stella sold 2,561,286 Cann Group shares for $954,886 while in possession of the inside information.
Cann Group announced the share placement on July 26 that year.
Dr Stella then reacquired 2,090,909 shares at a discounted rate through the placement resulting in him making a $204,490 profit and avoiding losses of $20,986.
ASIC Deputy Chair Sarah Court said: “If someone unfairly makes a gain from insider trading, other investors are losing. Financial markets can only operate fairly if information is available to all investors at the same time.
“This crime affects all Australians who invest in the share market and ASIC will continue to take strong action to combat insider trading.”
Dr Stella will be released immediately upon entering a recognisance of $1,000 to be of good behaviour for 12 months.
Presiding Judge Allen balanced the seriousness of the offending against mitigatory factors including Dr Stella’s cooperation, ill health, age, exemplary character and remorse and noted that the sentence imposed was significantly lower than it would have been otherwise.
He added that, but for the consent to make a pecuniary penalty order, he would have increased the sentence to 12 months for each charge and imposed 16 months for each had it not been for Dr Stella’s early guilty plea.
Cann Group did not respond to a request for comment.