ASIC Media Release
Former NSW tax consultant, Nicholas Glynatsis, was today sentenced to jail following an appeal in a case investigated by ASIC and prosecuted by the Commonwealth Director of Public Prosecutions (CDPP).
In December 2012, Mr Glynatsis was sentenced to two years imprisonment to be served under an Intensive Correction Order (ICO) (refer 12-313MR).
Today the NSW Court of Criminal Appeal upheld a prosecution appeal that the original sentence was manifestly inadequate and resentenced Mr Glynatsis to imprisonment for a total period of 21 months with a minimum term (involving full-time custody) of 12 months.
Taking into account the time Mr Glynatsis had already served under the ICO since 12 December 2012, the court ordered that he be taken in full-time custody immediately and remain there until 11 December 2013.
In December 2011, Mr Glynatsis, of Russell Lea, Sydney, pleaded guilty to nine charges of insider trading while he was employed at PwC, which yielded profits to him and his relatives of about $50,000 (refer 11-302AD).
In making the decision, the court stated that Mr Glynatsis should be resentenced to a term of fulltime custody ‘because no other sentence will adequately reflect the seriousness of the offences’ and that 12 months was ‘the minimum period that justice requires’ that he spend in fulltime custody.
Justice McCallum (with whom Rothman J agreed) added:
‘The acquisition or disposal of financial products by people having the unfair advantage of inside information is criminalised because it has the capacity to unravel the public trust which is critical to the viability of the market. It is, as previously observed by this court, a form of cheating. The fact that people of otherwise good character and compelling personal circumstances are tempted to engage in such conduct emphasises the need for the clear deterrent that insider traders should expect to go to gaol.'
ASIC Deputy Chairman Peter Kell said the result highlighted ASIC's commitment to seeking appropriate penalties for such crimes.
'Insider trading is an insidious form of fraud which seriously damages market integrity. We will continue to push for substantial penalties to discourage this type of behaviour by others.
'We recognise that combating insider trading is largely to do with changing the way markets work and individuals behave. We won't resile from this long-term objective', Mr Kell said.
The CDPP, Mr Robert Bromwich SC said, 'The Court of Criminal Appeal has confirmed that insider trading is a serious criminal offence. It is a planned crime and would-be offenders must be deterred. The court has made it clear that the real bite of general deterrence occurs when an actual custodial sentence is imposed.
'The important message supported by this decision is that insider trading is simply not worth it. The Commonwealth Director of Public Prosecutions will continue to work closely with ASIC to prosecute these cases’.
Since 1 January 2009, ASIC and the CDPP have prosecuted 28 insider trading actions. Of those, 19 have been successfully prosecuted, comprising 17 matters finalised and two guilty pleas where the individuals are awaiting sentencing. Five individuals are awaiting trial and are contesting their charges. Four matters have been unsuccessful.
Mr Glynatsis' offending occurred when the maximum penalty for insider trading was imprisonment for 5 years and/or a fine of $200,000. Since then the maximum penalty has been increased to imprisonment for 10 years and/or a fine of $765,000 or three times the total benefit derived from the offence (whichever is greater).