Former equities dealer John Hartman walks free

AUSTRALIA'S youngest convicted insider trader, former equities dealer John Hartman, has done his time.

John Hartman

AUSTRALIA'S youngest convicted insider trader, former equities dealer John Hartman, has done his time.

The 27-year-old walked free from his jail cell yesterday to be greeted by his girlfriend and older brother before returning to his Mosman family home after 15 months in Silverwater Correctional Centre.

Hartman was just a 20-year-old economics graduate from Sydney University when he was recruited by equities dealer Orion Asset Management in 2006 on a salary of $350,000.

Evidently it was not enough for Hartman, who between 2007 and 2009 engaged in insider trading that made him just over $1.9 million.

Engaging in a process called "frontrunning", Hartman passed on inside information of Orion Asset Management trades to his friend Oliver Curtis, and traded in contracts for difference using an account with IG markets without informing Orion.

The frontrunning -- in JB Hi-Fi, Great Southern, Goodman Group, Transpacific Industries Group and several trades in Oxiana -- netted Hartman about $90,000 per trade.

His cover was blown in early 2009 when IG Markets contacted him and demanded to see the trade approval he had from Orion for the trades he had completed with IG the year before.

The court heard that after he was contacted by IG, "in a state of desperation he approached his father, Dr Keith Hartman, and told him everything he had done". He was sacked the next day.

Dr Hartman walked his son into the Australian Securities & Investments Commission with a lawyer a short time after.

The youngest Australian convicted of insider trading, Hartman was originally sentenced to 4 1/2 years' prison with a minimum non-parole period of three years, after pleading guilty to 25 charges of insider trading and passing on information. But his sentence was reduced on appeal by 21 months in December with a new non-parole period of 15 months.

Despite noting that "we still have to deter 21-year-old masters of the universe", appeal judges found the initial sentence too harsh given his age and that the crime occurred "at a time of mental disturbance", characterised by depression, drug and alcohol abuse and gambling addiction.

Hartman also repaid $1.57m in profits under proceeds of crime legislation.

As part of the terms of his release, Mr Hartman must refrain from drugs and gambling and undertake a residential gambling program.