Former stockbroker sentenced to jail for $7.5 million fraud
A former broker from Hogan and Partners Stockbrokers Pty Ltd, Jonathan Kur, was sentenced in the Perth District Court on 21 February 2013 to four years' jail, to serve at least 2 years before being eligible for parole on three counts of fraud worth $7,556,773.
The charges related to options trading by the broker for a number of clients based on Botswana. Mr Kur attempted to hide trading losses across numerous other client accounts between May 2005 and December 2008.
The rogue trading by Kur almost singlehandedly brought down his broking firm. Hogan and Partners directors closed the firm's doors just two days after Kur quit in December 2008, and revealed details of options trades that he had disguised for more than three years. Mr Kur reported the rogue trading to the Australian Securities and Investments Commission (ASIC) and pleaded guilty to the charges.
In sentencing, Judge Fenbury said that Kur’s success and community standing were to be put to the side as there needed to be an example set with his sentence.
In 2009, ASIC also permanently banned Mr Kur from providing financial services.
ASIC crackdown on insider trading
The Australian Securities and Investments Commission (ASIC) is about to update its market surveillance system to keep up with market offenders. In last year’s budget, ASIC was allocated an additional $43 million to replace its market supervision system. The new system will include additional components, giving it better visibility of the whole market, including data mining capabilities and the ability to look at futures trading real time and compare them with equities trading to detect people slipping between the two markets.
ASIC’s market surveillance operation starts from before the opening of market, reviewing recent and forthcoming company announcements under the Australian continuous disclosure regime and set algorithms for their system that alert ASIC of undue trading based on volume, price or movements.
ASIC has brought 26 insider trading cases in the last four years, triple the number in the previous 15 years.