Mr Michael John Story, of Elwood, Victoria, a general manager employed by Sigma Healthcare Limited (Sigma), has been charged with two counts of insider trading.
Sigma is a wholesale and distribution pharmaceutical business servicing pharmacies and hospitals throughout Australia and during 2018 was the main supplier to the Chemist Warehouse Group (CWG).
On 2 July 2018, Sigma publicly announced that the wholesale supply agreement between Sigma and CWG would cease on 30 June 2019. Following the announcement, Sigma shares closed 40% lower compared to the previous day. Mr Story disposed of 645,047 Sigma shares on 9 May 2018 and a further 250,000 Sigma shares on 21 June 2018.
ASIC alleges that, at the time he disposed of the two tranches of Sigma shares, Mr Story was in possession of inside information relating to the status of negotiations to renew the wholesale supply agreement between Sigma and CWG.
At the time of the alleged offences, each of the charges of insider trading contrary to section 1043A of the Corporations Act 2001 carried a maximum penalty of 10 years’ imprisonment.
In March 2019 the maximum penalty for insider trading was increased to 15 years imprisonment.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
The matter has been adjourned to a committal mention hearing in the Melbourne Magistrates Court on 18 December 2020 at 10am.
