Insider Trading !

It is not uncommon for younger age business people keen to adopt a fitness programme to regularly jog during the lunch break.  The vice president of one leading bank often jogged with a more junior employee and there was friendly chatter as they peeled off the calories.   It seems that this junior employee was using the opportunity to go on a " fishing expedition ".    The senior man was involved in highlevel deals financed by the bank and gaining knowledge of how these were progressing opened up profitable stock exchange trading possibilities.

The ever watchful Australian Securities and Investment Commission ( ASIC ) noticed an emerging pattern in this junior employees trades - and began to keep watch, gaining a pattern of the timing of purchases corresponding with the times he was jogging with the bank vice president.   He had been careful to keep mention of his stock market forays secret as he pumped for additional information during these exercise sessions.

This younger man had form for insider trading and had served a period in prison much earlier in his career.  ASIC confronted him - and did a " deal  ".He agreed to give evidence against the bank vice president in exchange for his own freedom from a prison sentence.  At that time, the vice president was blissfully unaware that talking " shop " during jogs was snaring him in a devastating encounter with the law.

In a sensational development this week the charge against the vice president was thrown out of court.  He was cleared by the local court of  procuring or encouraging his jogging buddy to commit insider trading.  ASIC was devastated.  It seems that the evidence their witness was giving was " critical " to the case and without it the case simply collapsed.

The Magistrate was unimpressed.  ASIC was suggesting that the vice president would risk his family and career " for nothing " ?   There was no financial benefit whatsoever and it was not an offence to pass inside information to a person unless tipping or procuring was also involved, and clearly neither was involved in this case.

Many people are suspicious of the legality of " deals " where prison is waived in exchange for giving evidence in court against another person.  There is a strong incentive to tell a lie.   The prosecution is virtually putting words into their mouth and they will receive a reward if they do so in a manner accepted by the court.

Unfortunately,  just like other professions the law progresses those who constantly win.   Both prosecutors and defence lawyers achieve fame - and keep their jobs - by being successful and they can quickly become indifferent to the actual guilt or innocence of the accused.

In this instance, the magistrate was made aware that such a deal was part of the prosecution case - and decided accordingly.   What is completely unacceptable is where such deals are made behind the scenes and kept secret from both judges and juries.    It should be part of automatic court procedure for the judge or magistrate to question if any such deal is involved in all cases before the court.  If such a deal was not disclosed, that would be automatic reason for any verdict to be set aside.