The Federal Court in Sydney has sentenced a former investment manager for an ASX-listed asset management firm to a total sentence of 6 years’ imprisonment for insider trading and procuring others to trade in listed securities. The sentence also took into account a further offence involving unlicensed financial services over a 9-month period.
The case shows how quickly misconduct can move from detection to sentencing. The Australian Securities and Investments Commission (ASIC) also notes this case as the first outcome for its new specialist insider trading team, which investigated and finalised the case within 16 months of the offence.
The fund manager was hired by the Chairman of the affected asset management company in the capacity of an investment analyst. The fund manager gained unauthorised access to the Chairman's personal computer, reading and photographing confidential documents detailing a takeover proposal of the company by a rival firm. He then traded and encouraged others to trade in more than $3 million AUD of the firm’s securities, even leaking details of the takeover to the media. Upon public release of the takeover proposal, the company’s shares jumped 12.5% prior to market opening following the media story. The financial gains for the fund manager totalled $309,572 AUD profit.
The misconduct follows a pattern compliance teams know well: unauthorised access to confidential and potentially market-moving material, rapid trading activity while in possession of material non-public information (MNPI), and disclosure of that information before the market receives official announcements.
ASIC Chair Joe Longo linked the outcome to ASIC’s intent to move faster on criminal insider trading briefs. He noted, “While some insider trading cases can take several years … [this offender] went from crime to jail time in just over a year, underscoring ASIC’s determination to fast-track criminal cases of this type.” He added that ASIC will continue “cracking down on insider trading and other misconduct that damages market integrity.”
In line with its 2026 enforcement priorities, ASIC is taking important steps towards strengthening investigation and prosecution of insider trading conduct.
Why Firms Need a Preventive Approach to Insider Trading
Even the most well-communicated policies on personal account dealing are rarely enough to deter bad actors. However, firms can take a more preventative and defensible approach with robust oversight across disclosure, pre-clearance, monitoring, escalation, and remediation. When a firm relies on email, spreadsheets, and fragmented attestations, it becomes much harder to answer basic internal and regulatory investigation questions quickly, such as:
- Which employees hold, trade, or seek to trade in a relevant issuer?
- Who accessed material non-public information, and when?
- Did the employee request pre-clearance, and did the firm apply restricted list controls?
- Did monitoring detect unusual patterns, and did the firm document review and escalation?
Even when firms have basic policies and systems in place, the association with publicised cases of regulatory enforcement action can be enough to tarnish reputations and shake investor confidence. Additionally, ASIC notes that the maximum penalty for insider trading is now 15 years’ imprisonment. From 2009 to January 2026, 46 people have been criminally convicted of insider trading following ASIC investigations, including senior executives and company chairs. Firms should take all possible precautions, such as implementing dedicated compliance management systems, to reduce insider trading risk and prevent potentially life-changing penalties for individuals involved.
How Firms Can Strengthen Oversight with RegTech
To improve oversight, firms need a system of record that brings personal trading controls and evidence of compliance together. Regulatory technology (RegTech) such as MCO’s Know Your Employee suite brings together crucial data across personal trades, MNPI, and multiple other areas of employee conflicts of interest into an integrated compliance management platform.
In practice, firms are using MCO to tighten three key areas of insider trading risk that often break under pressure:
- Attestations that connect policy to action
MCO’s Attestations Manager lets firms send attestations that cover personal accounts and trades, access to MNPI, and related conduct obligations, while embedding policies directly into the workflow.
- Workflow, escalation, and audit-ready evidence
MCO’s Personal Trade Manager (PTM) automates personal account dealing through configurable pre-clearance and post-trade rules, while capturing 100% of employee trading and holding data via brokerage feeds, OCR, manual entry, and online access. Firms can monitor activity against restricted lists and insider trading requirements, receive alerts for potential conflicts, and gain a complete audit history of pre-clearances and order attempts to inform regulatory investigations.
- A centralised conduct-risk-based view
The MCO platform uses an integrated approach that supports monitoring and recordkeeping across a wide range of employee compliance activities. The platform includes workflows, case management, dashboards, document management, and more to create a consolidated view of employee conflicts of interest and conduct risk.
A Practical Takeaway for Compliance Leaders
ASIC is sending a strong message that it will detect suspicious activity faster and take immediate action to remove bad actors from Australia’s financial markets.
To further support regulatory priorities, financial firms should go beyond periodic certifications and build robust oversight mechanisms that incorporate automated workflows and alerts and a complete, defensible audit trail.
