Donvale man Antonio Stella has been found guilty of two counts of insider trading involving a medicinal cannabis company.\u00a0<\/p>\n
He pleaded guilty to having knowledge of an upcoming share placement for medicinal cannabis company Cann Group Limited, before it was publicly announced in July 2021.<\/p>\n
Cann Group is a company that researches, cultivates and manufactures medicinal cannabis via its facilities in Bundoora, in northern Melbourne, and near Mildura in north-west Victoria.\u00a0<\/p>\n
The Mildura facility will be capable of producing up to 12,500 kilograms of medicinal cannabis annually at full capacity.<\/p>\n
Cann Group had intended to raise up to $20 million while offering a 27.6 per cent discount to the prevailing share price.<\/p>\n
The Australian Securities and Investments Commission (ASIC) alleged that between July 19, 2021 and July 20, 2021, Stella sold 2,561,286 Cann Group shares for $954,886.<\/p>\n
<\/p>\n
The share placement raised capital for Cann Group’s Mildura medicinal cannabis facility. (Supplied: Cann Group)<\/p>\n
Timeline of announcements<\/p>\n
Cann Group entered a trading halt on July 22, 2021.<\/p>\n
The company then announced a share placement on the Australian Securities Exchange on July 26, 2021.<\/p>\n
Institutional investors were offered shares at a price of $0.275 per share.<\/p>\n
A proposed Share Purchase Plan, attempting to raise a further $10 million, was also announced on that day.<\/p>\n
The share placement raised $10 million by August 2, 2021, and a further $8.69 million was raised by the Share Purchase Plan by October 15, 2021.<\/p>\n
Cann opted to raise the capital to expand production capabilities, including at its newly commissioned medicinal cannabis facility near Mildura, in north-west Victoria.<\/p>\n
Stella gained from selling, court hears<\/p>\n
After allegedly selling his shares between July 19 and July 20, 2021, Stella reacquired 2,090,909 shares at a discounted rate during the share placement period.<\/p>\n
<\/p>\n
Stella made a $204,490 profit from his trading activity. (ABC News: Ebony Tenbroeke)<\/p>\n
The trading activity resulted in Stella making a $204,490 profit.<\/p>\n
He avoided losses of $20,986, as the share price fell in the wake of the placement announcement.<\/p>\n
“This crime affects all Australians who invest in the share market and ASIC will continue to take strong action to combat insider trading,” ASIC deputy chair Sarah Court said.<\/p>\n
“If someone unfairly makes a gain from insider trading, other investors are losing.<\/p>\n
“Financial markets can only operate fairly if information is available to all investors at the same time.”<\/p>\n
Judge says guilty plea mitigated sentence<\/p>\n
Stella was sentenced to 11 months’ imprisonment and ordered to pay $225,447.24.<\/p>\n
He was given time served and was placed on a good behaviour bond for 12 months.<\/p>\n
ASIC said County Court Judge Duncan Allen’s sentence balanced the seriousness of the offending against factors including Stella’s cooperation, ill health, age, exemplary character and the level of remorse shown.<\/p>\n
<\/p>\n
A man inspects a medicinal cannabis plant at Cann Group’s Mildura facility. (ABC News: Else Kennedy)<\/p>\n
Judge Allen also said he would have imposed a 16-month sentence for each charge if Stella had not entered an early guilty plea, and would have had a 12-month sentence per charge if he had not consented to paying the fine.<\/p>\n
The matter was prosecuted by the Director of Public Prosecutions after an ASIC investigation and referral.<\/p>\n
Cann Group declined to comment.<\/p>\n","protected":false},"excerpt":{"rendered":"Donvale man Antonio Stella has been found guilty of two counts of insider trading involving a medicinal cannabis…\n","protected":false},"author":2,"featured_media":198487,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,70900,124362,20806,124366,1108,124363,124364,44,1610,124365],"class_list":["post-198486","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-australian-securities-and-investments-commission","tag-cann-group","tag-corporate-crime","tag-county-court-judge-duncan-allen","tag-court","tag-insider-trading","tag-medicinal-cannabis","tag-news","tag-trading","tag-white-collar-crime"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/198486","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=198486"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/198486\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/198487"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=198486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=198486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=198486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}