27 November 2025
6 min read
#White Collar Crime & Regulatory Investigations, #Corporate & Commercial Law
Published by:
Earlier this month, ASIC announced that strengthening the investigation and prosecution of insider trading will continue to be one of its 2026 enforcement priorities.
For people working in or around listed companies, information often passes through their hands before it is publicly available. The risk of utilising this insider knowledge can have significant consequences.
At its core, insider trading involves dealing in financial products, such as company shares, while in possession of ‘inside information’. The law is set out at section 1043A of the Corporations Act 2001 (Cth) (the Act) and prohibits two main forms of conduct:
‘Inside information’ is information that is not generally available (that is, ‘public’) and that, if it were generally available, a reasonable person would expect it to have a material effect on the price or value of the financial product. Most commonly, this will involve knowledge that could move a company’s share price, such as an upcoming merger or takeover.
The penalties for insider trading are severe. Individuals can face both civil and criminal penalties, including up to 15 years in prison, massive financial penalties, and orders to return any profits made. More specifically, in civil penalty proceedings, the Act provides that the pecuniary penalty applicable to an individual is the greater of 5,000 penalty units or three times the value of the benefit derived, or detriment avoided.
As of 2025, one penalty unit is $330, meaning the maximum civil penalty for individuals is $1,650,000. For companies, the maximum penalty is the greater of:
ASIC and the courts repeatedly stress that insider trading ‘shatters public confidence’ in financial markets. Even where the financial gain is small, the offence itself is seen as corrosive to fairness and market integrity. Therefore, ASIC vigorously enforces these provisions.
Two recent examples illustrate the message that even relatively modest profits do not insulate offenders from serious sanctions.
Commonwealth Director of Public Prosecutions v Duncan John Stewart [2025] VCC 1306 (Stewart case)
In August 2024, Duncan Stewart pleaded guilty to insider trading involving shares in Kidman Resources Limited. At the time, Kidman was the subject of a proposed takeover by Wesfarmers Limited.
While in possession of inside information about the deal, in April 2019 Mr Stewart purchased approximately $130,000 worth of Kidman shares. After the takeover became public, he sold those shares for a profit of nearly $65,000.
The court sentenced him to 18 months’ imprisonment, released immediately on a $10,000 recognisance for two years of good behaviour, and ordered him to repay the profit. The judge made clear that without a guilty plea, the sentence would have been substantially longer, around two years and three months.
CDPP v Gregory Campbell [2021] VCC 1839 (Gregory case)
Mr Campbell, a 63-year-old executive at Healthe Care Australia, pleaded guilty to one count of insider trading. After being told a “deal had been done” regarding Healthe Care’s proposed acquisition of Pulse Health shares, he purchased 392,257 Pulse shares at $0.325 each. When Pulse announced the indicative offer the next day, the share price rose to an average price of $0.4063 per share, and Campbell sold his shares for a profit of $31,996.78.
Although he did not know the full transaction details, Campbell admitted he was aware of the information he acted on. Healthe Care’s in-principle agreement to purchase a major share parcel, was “not generally available and if the information were generally available, a reasonable person would have expected it to have a material effect on the price or value of Pulse shares”. The court accepted that the profit was relatively small, that Mr Campbell had cooperated extensively making full and open admissions to ASIC in 2018, and that the five-year delay had caused significant ongoing stress. His prior good character, loss of ability to hold corporate roles, and the publicity he already suffered were also noted.
Campbell was convicted and sentenced to 12 months’ imprisonment, fully suspended on a 12-month recognisance release order of $10,000. He was also fined $10,000 and ordered to forfeit the $31,996.78 profit. The judge emphasised that, without the guilty plea, no suspended sentence would have been granted, and a two-year custodial sentence would have been imposed.
Key takeaways:
Ultimately, insider trading provides little to gain but much to lose. Even a single unlawful trade can end a professional career, attract public penalties and destroy personal credibility.
In Australia today, insider trading remains one of the most serious market-integrity offences. For anyone who has access to price-sensitive information (executives, directors, advisers, contractors or connected persons) the rules under section 1043A must be front of mind. Any level of trading can trigger serious civil and criminal consequences. For legal practitioners advising corporate clients: prevention, training, monitoring and swift response are imperative. For individuals: if in doubt, seek advice or abstain, the risk simply is not worth the reward.
If you have any questions regarding insider trading or seek advice on how to prevent this risk, please contact us here.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
Published by:
