Hefty sentence for big inside rig
An eight-year sentence has been handed down in Australia's biggest-ever insider trading case.
Steven Xiao, former managing director of Chinese company Hanlong Mining, pleaded guilty to carrying out more than 100 illegal trades during his time in the role, and has been sentence to 8 years and 3 months’ jail.
Justice Peter Hall said Xiao was a “true insider”, guilty of a “gross breach of trust and confidentiality”.
Justice Hall said a $US1 million loan that Xiao used to finance some of his illegal trades was “a most serious aggravating factor”.
The judge said Xiao enacted “a planned and strategic exploitation of his position of trust”.
Justice Hall took into account submissions from the defence stating Xiao was “ashamed” of his actions, and had told his grandmother that he wanted “to make it up to Australia”.
“I am prepared to accept he has made expressions of some contrition for his offending,” Justice Hall said.
Mr Xiao’s dodgy deals happened around Hanlong Mining’s takeover discussions with Perth-based Sundance and uranium explorer Bannerman Resources in July 2011.
He was accused of using his director who used highly sensitive information garnered from bid negotiations to simultaneously make illegal trades, his case was in the worst category of offending.
The prosecution said Xiao, through two companies incorporated in the British Virgin Islands and one in Australia as well as his wife Xike Hu, traded in Bannerman contracts for difference and shares in Bannerman and CFDs in Sundance CFDs.
The $1.3 billion takeover bid smashed Sundance's shares in April 2013, after it was determined that Hanlong was unlikely to meet its funding obligations and the deal fell apart.