Ex-chair faces 15 years’ jail, accused of ASX insider trading

The man is accused of selling shares while having information the market didn’t know about.

| More on:
a gavel is placed on a stand on a desk with a legal representative wearing a suit in the background.

Image source: Getty Images

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.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News