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Inside information gained on a 2021 share placement planned by Genesis Minerals (ASX: GMD) has led to the Supreme Court imposing a two-year sentence on former Perth-based corporate advisor Cameron Kerr Waugh who pocketed just $57,000 from the deal.
The Supreme Court of Western Australia sentenced Waugh this week after he pleaded guilty to charges of insider trading brought by the Australian Securities and Investments Commission.
Waugh will be released after nine months, upon entry into a recognisance to be of good behaviour for 15 months.
Waugh pleaded guilty to acquiring 747,626 shares in Genesis between 14-21 September 2021 when he became aware of a funding proposal that included a $20.8 million share placement and a restructure of the company’s board that would see seasoned mining executives – former Northern Star Resources (ASX: NST) Raleigh Finlayson and former Fortescue Metals (ASX: FMG) CEO Neville Power - join the board.
Finlayson was subscribing to $7 million worth of shares in the Genesis placement announced by the company.
Waugh learned of the company’s internal plans through his role at Omnia Company where he received email correspondence of the proposal and a draft ASX announcement for Genesis outlining the funding package and the changes to the board.
After Genesis released the information to the ASX on 22 September 2021, shares in Genesis surged 187 per cent.
The court was told that Waugh had sold 747,626 shares in Genesis between 1 and 19 November 2021, with the sales realising him a profit of $57,256.44.
Waugh was arrested and charged for insider trading in December 2022.
At the time of the offence, the insider trading breach carried a maximum penalty of 15 years’ imprisonment and/or a maximum fine that is the greater of either $999,000 or the benefit derived multiplied by three. In Waugh’s case, that could have been $171,769.32.
Following his conviction, Waugh was automatically disqualified from managing corporations for five years.
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