A Sigma Healthcare (ASX: SIG) general manager could be facing 20 years in jail after Australia's corporate cop charged him with insider trading.
The Australian Securities and Investments Commission (ASIC) has thrown the book at Michael Story accusing him of allegedly selling a raft of the pharmaceutical group's shares before an ASX announcement that had a significant impact on the company's share price.
According to ASIC, on 2 July 2018, Sigma announced its wholesale supply agreement with Chemist Warehouse Group would cease on 30 June 2019.
Sigma shares fell 40 per cent following the announcement.
ASIC alleges Story disposed of 645,047 Sigma shares on 9 May 2018 and a further 250,000 Sigma shares on 21 June 2018.
According to ASIC, 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 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 has been adjourned to a committal mention hearing in the Melbourne Magistrates Court.
In a statement to the ASX Sigma Healthcare said it was aware of the start of court proceedings and that no other Sigma employees were under investigation.
"Michael remains an employee of Sigma at this time."
Business News Australia