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When the limelight dropped on Oliver Curtis - 8 July 2016

Nine years after the fact, Oliver Curtis has been found guilty of conspiring to commit insider trading.  He was recently sentenced to two years’ imprisonment (to serve at least one year).  While Curtis attended his trial and sentencing, his wife’s designer outfits seemed to attract more (media) attention than any question of Curtis’ culpability and later, his lack of contrition. 

At least in sentencing, Justice McCallum of the NSW Supreme Court threw some tough punches where they were due.  A jury had found that the conspiracy charge stood up: Curtis made 45 trades over a 14 month period on instructions he understood were based on inside information.  He had received that information from his former best bud, Hartman.  Curtis was 21 at the time of the offending and Hartman, 20.

Hartman had had access to inside information about the trading intentions of his employer, Orion Asset Management Limited.  Hartman had paid particular attention to the purchase or sale of shares in certain companies.  The pair crafted a handsome (and unlawful) conspiracy that, ‘from time to time, when Hartmann possessed such information, he would procure Curtis to acquire or dispose of contracts for difference in the same shares, in effect front-running Orion’s trading.’[1]  The key here was the trading in CFDs allowed the pair to ‘make substantial profits within a short period of time from relatively small movements in the price of the underlying share.’[2] 

No surprise that the pair communicated by pinning (through Blackberry’s communication system) to make their correspondence untraceable. 

Curtis amassed a $1,400,000 profit from their unlawful dealings.  The scathing sentencing remarks highlight Curtis’ motivation ‘to fund a lifestyle of conspicuous extravagance.’[3]  Her Honour also did not shy away from pointing out the painfully obvious: white collar crime is often a ‘choice freely made by well-educated people from privileged backgrounds...’[4]

In testifying against Curtis, Hartman gave the Crown the edge it needed to prove its case.  Without the insider’s evidence (here, with Hartman), in the case of non-standard securities such as CFDs, ASIC is hard pressed adequately detecting and investigating these offences, let alone prosecuting them. 

If it is so, as we are told by ASIC (constantly, it seems) that the culture of the banking and finance sector needs a severe overhaul, then where to from here?  Top-down messages from the Regulator insist that banks and the like need to hone a stronger focus on risk and compliance not as a killjoy but to enable ‘confident and informed decision making by consumers of financial products.’[5]  Objectively then, domestic and international investors’ trust remains intact and the integrity of the market uncompromised.

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[1]      R v Curtis (No 3) [2016] NSWSC 866 [3].
[2]      R v Curtis (No 3) [2016] NSWSC 866 [11].
[3]      Misa Han, ‘Trader jailed after nine years of denial’, The Australian Financial Review, 3, 25 – 26 June 2016.
[4]      R v Curtis (No 3) [2016] NSWSC 866 [51].  See also Misa Han, ‘Trader jailed after nine years of denial’, The Australian Financial Review, 3, 25 – 26 June 2016.
[5]      Greg Medcraft, ‘Just why ASIC had to bring Oliver Curtis to justice’, The Australian Financial Review, 25 – 26 June 2016.