Former chair of Vocus Group Ltd (ASX: VOC), Vaughan Bowen, has appeared in court accused of selling about $25.7 million in shares while possessing inside information.
He appeared with legal representation at the Melbourne Magistrates’ Court on Tuesday charged with 2 counts of insider trading.
According to the Australian Securities and Investments Commission (ASIC), the allegations relate to Bowen’s dumping of 5,617,554 Vocus shares on 4 June 2019.
In an unremarkable trading session, the telco’s stock opened at $4.56 and closed at $4.58 that day.
But the next day all hell broke loose after talks for EQT Infrastructure IV Fund to entirely acquire Vocus were revealed to have broken down.
The share price finished 5 June 2019 at $3.77 which represented a 17.7% plunge for the day.
$4.5 million saved after alleged illegal insider trade
Bowen would have cashed in about $25.7 million on 4 June 2019.
ASIC accuses Bowen of knowing that the takeover discussions were terminated when he disposed of those shares.
Selling on 4 June rather than on 5 June, after the public knew of the development, would have saved Bowen about $4.5 million.
Insider trading charges can attract a maximum penalty of 15 years in prison.
Bowen stepped down as chair in March 2018, which was well before the alleged insider trading occurred.
ASIC did not disclose how Bowen would have come across the inside information.
The case has been listed for a committal hearing on 7 December in the Magistrates’ Court of Victoria.
Vocus was delisted from the ASX on 23 July this year after it was eventually acquired by a consortium known as Voyage Australia Pty Limited.