By Mark Hawthorne
THE former Macquarie Equities senior client adviser Newton Chan will spend four months in prison after pleading guilty to eight counts of market manipulation of the share price of the collapsed electronic payments company Bill Express.
Chan, 46, of Balwyn in Victoria, once earned more than $500,000 a year in his senior role with the Macquarie Group, but was led from the Supreme Court of Victoria in handcuffs yesterday morning as friends and former colleagues looked on.
A declared bankrupt, Chan has been banned from providing financial services for five years. In total, Chan was sentenced to 20 months' imprisonment on eight counts of market manipulation and one count of providing false or misleading information to the Australian Securities and Investments Commission.
He will serve just four months of that sentence after co-operating with ASIC's investigation, including handing over a memory stick that contained a scripted story given to him by the former Bill Express chief executive, Ian Christiansen.
''Your career is in ruins,'' said Justice Terence Forrest in sentencing Chan. ''I consider that it is only by the imposition of such a sentence … that others considering manipulating the market in some way will pause to think about the potential consequences of their actions.''
ASIC is investigating the $250 million collapse of Bill Express in July 2008, and will now focus on the role Mr Christiansen and at least two other executives played in the market manipulation of Bill Express's share price.
Between May 3, 2006, and March 28, 2008, Chan used trading accounts to buy more than 34 million Bill Express shares worth $6.1 million via 904 separate transactions. These transactions created an artificial price for Bill Express shares, and helped company directors to avoid margin calls.
During his plea hearing, Chan told the court that he performed the transactions on the orders of Mr Christiansen, the company accountant Peter Couper and an employee, Enzo DiDonato.
Chan told the court that he met the three men at a Balwyn coffee shop just weeks before the collapse of Bill Express.
Asked if the purpose of that meeting was ''to get your stories together so that you could each tell the same story to ASIC'', Chan replied ''yes''.
''Was it clear to you that you were being asked by Ian Christiansen and indeed by Mr Couper, essentially, to tell lies to protect them both?'' Chan was asked.
''Correct,'' he replied.
Chan said he was later invited to Mr Christiansen's home and provided with a ''false story to be given to ASIC and anybody else who might investigate'' the manipulation of Bill Express's share price.
That story was provided on a memory stick, which Chan later handed over to ASIC.
Chan also told the court that, just weeks before Bill Express collapsed, Mr Christiansen informed him he had ''a legal document'' signed by his brother Hal Christiansen, who was the chairman of Bill Express, in which ''Hal admitted to being the perpetrator''.
Hal Christiansen was diagnosed with terminal cancer at the time of the discussion and died not long after the collapse of Bill Express.
''The blaming of Hal, so to speak, is more about Ian then anybody else,'' Chan told the court.
Mr Christiansen and Mr Couper did not return BusinessDay's calls last night.