Melbourne man accused of insider trading to face trial, court
A Melbourne man will face a criminal trial amid allegations he used inside knowledge to buy shares in ASX-lithium major Kidman before a massive takeover deal.
A Melbourne man accused of insider trading has been committed to stand trial.
Magistrate Rohan Lawrence ruled Duncan Stewart will face four charges relating to insider trading, following a years long investigation conducted by the Australian Securities and Investments Commission.
Asked to stand in the court to declare how he pleaded to the charges, Mr Stewart said: “not guilty, your honour”.
Mr Stewart declined to comment outside the court on Wednesday morning and has been ordered to attend a directions hearing at Melbourne’s County Court in July.
ASIC has alleged Mr Stewart received information from his brother-in-law and Kidman Resources boss Martin Donohue about possible bids from Chilean major SQM and Wesfarmers in 2019, which he used to buy shares in the company and urged his brother Ashley Stewart to do the same.
The corporate cop’s case hinges on a text message sent on March 1, 2019 they said showed Mr Stewart “clearly (had) inside information obtained at about the time … relating to a potential takeover of Kidman by SQM”.
Mr Stewart faced a committal trial in the Melbourne Magistrates Court in late June to determine if there was enough evidence in ASIC’s criminal case against him.
After considering the matter for about a month, Magistrate Lawrence said in his view Mr Stewart and Mr Donohue were in frequent contact around the time of the takeover offers.
“I will commit Mr Stewart for trial on all charges,” he said.
Mr Stewart must reside at one of two addresses supplied to the court before the trial takes place and must give ASIC 72 hours notice if he intends to travel overseas.
During the committal hearing, the court heard ASIC was eyeing a number of persons of interest in the case, but “a distinction was drawn with Duncan Stewart because located on his phone was a text message of 1 March 2019 which was referred to and considered … as a potentially incriminating message”.
The court heard has previously heard Mr Stewart allegedly owed his brother “a kind of debt and had a hope or expectation that by giving him a tip about Kidman and urging him to buy Kidman shares that some of that … may be forgiven”.
Mr Donohue was not called to give evidence in the matter, but ASIC alleged that as soon as the SQM deal fell through in 2019 he started passing on inside information about other bids Kidman was receiving, including one from Wesfarmers. That deal did go ahead in September 2019 for $1.90 per share, all up worth $776m.
ASIC have alleged Mr Stewart made $68,000 with information about the Wesfarmers deal.
Documents released to The Australian in early June showed Mr Stewart was interviewed by ASIC investigators for about 20 minutes on February 24, 2021 during a raid on his property.
Two iPhones were seized, along with a Lenovo laptop belonging to Dominique Stewart in addition to a hard drive was also seized that contained “extracted and downloaded materials” from a MacBook Air, an iPhone Xs and iPhone 7 cloud backup belonging to Ms Stewart.
Ashley Stewart also handed his iPhone Xs, iPhone 12 mini and iPad pro to ASIC in late November 2021. As well, Samuel McCardle handed over an iPhone 12 to ASIC for evidence.
The corporate cop first launched its investigation on November 1, 2019.
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