CFD trader sentenced to 9 months in prison for inside trading

Jin Xi Li, a trading trader CFDs based on shares of PanAust Limited, was sentenced to nine months in prison for insider dealing, it announced on Monday Australian Securities and Investments Commission (ASIC). As a result of these actions, Li earned 343. $.

Inside trading with CFDs

According to ASIC, Li was in possession of inside information in relation to an offer to acquire PanAust (a copper and gold mining company) by Guangdong Rising HK (Holding) Limited (GRAM). GRAM submitted a preliminary bid to acquire PanAust in April 2014, which ultimately did not materialize. Less than a year later, Li contacted "his" man in China to help him determine if GRAM would make another bid to acquire PanAust. Li's contact confirmed that GRAM is preparing financing for another takeover bid.

Prior to PanAust's official announcement of its takeover offer on March 30, 2015, Li purchased 390 PanAust stock CFDs between March 000 and March 19, 26. He also forced his wife to acquire 2015 CFDs MrAust between 22 and 26 March 2015. After the announcement of the public information on the acquisition, the total of open positions brought a profit of over PLN 340 thousand. $.

In summing up the sentence, the judge said:

"[Jin Xi Li] used an unfair advantage in trade, and taking into account the principles of general and specific deterrence, the appropriate penalty is imprisonment."

ASIC Vice President Sarah Court commented:

“This verdict shows the criminal ramifications of insider trading in Australian financial markets. Insider dealing is an ongoing priority for ASICs to ensure our market is strong and fair. ”