Two steps forward, one step back: assessing recent developments in the fight against insider trading

After many years of infrequent prosecutions and few convictions for insider trading, the Australian Securities and Investments Commission had some recent successes. This article will review the decisions in R v Doff (2005) 23 ACLC 317; [2005] NSWSC 50 – a criminal prosecution resulting in a conviction – ASIC v Petsas and Miot (2005) 23 ACLC 269; [2005] FCA 88 – the first set of civil penalty proceedings for insider trading – and ASIC v Vizard (2005) 145 FCR 57; [2005] FCA 1037 – a somewhat contentious case involving civil proceedings for breaches of directors’ duties in respect of conduct which appears to amount to insider trading – and will also consider the civil penalty proceedings for insider trading which ASIC instituted against Citigroup in March 2006. These cases have brought issues concerning insider trading into the public arena once more and this article will examine their contribution to the law of insider trading in Australia, in particular in relation to the elements of the insider trading offence and sentencing and penalty considerations relevant to convicted insider traders, as well as to the debate on insider trading regulation. The likely future impact of these cases will also be considered, as each of these cases has the potential to have a significant effect on future insider trading cases, either in the way in which such proceedings are likely to be pursued or in relation to their possible outcomes.