Sigma M&A manager charged with insider trading

An executive at Sigma is accused of selling shares before the company ended its wholesale contract with Chemist Warehouse.

Sigma operates the Amcal Chemist brand.

A business development and M&A manager at Sigma Healthcare has been charged with insider trading relating to the cancellation of a distribution agreement between the pharmacy wholesaler and Chemist Warehouse.
The Australian Securities and Investments Commission said on Friday that Michael Story, general manager of business development and M&A at Sigma, had been charged with two counts of insider trading.
ASIC said that the Victorian man’s charges, which each carry a maximum penalty of 10 years’ imprisonment, relate to two market transactions he made on May 9, 2018 and June 21 2018.
On July 2, 2018 Sigma announced that it would no longer serve as wholesaler to retail giant Chemist Warehouse as of June 30 2019, triggering a plunge in the company’s share price, which fell 40 per cent by the close of trade.
The charges allege that on May 9, 2018 Mr Story, having inside knowledge relating to the wholesale agreement, sold 645,047 shares in the company, which also operates the Amcal Chemist brand.
At the time the value of the shares was just under $500,000.
Mr Story then disposed of a further 250,000 Sigma shares on June 21, 2018, worth just over $121,000 at the time.
ASIC said that due to Mr Story’s alleged position of insider information, his actions represented a violation of the Corporations Act.
“ASIC alleges that, at the time he disposed of the two tranches of Sigma shares, Mr Story was in possession of inside information relating to the status of negotiations to renew the wholesale supply agreement between Sigma and CWG,” ASIC said.
“At the time of the alleged offences, each of the charges of insider trading contrary to section 1043A of the Corporations Act 2001 carried a maximum penalty of 10 years’ imprisonment.”
Sigma acknowledged the charges in a statement to the market on Friday afternoon.

“Sigma Healthcare Limited is aware of the commencement of court proceedings in respect of allegations of insider trading against Michael Story, who is a Sigma employee,” the company said.

“While Sigma is not party to the proceeding, we are taking this matter seriously and will continue to monitor the court process.

“Sigma has been assisting ASIC with its inquiries, and no other Sigma employees are under investigation in relation to this matter.”

Sigma said Mr Story remained an employee of the company.

“Sigma is committed to upholding high standards in corporate governance. Michael remains an employee of Sigma at this point in time.

“Sigma will make no further comment pending the outcome of the court proceedings.”

Mr Story will appear in front of the Melbourne Magistrates Court on December 18 for a committal hearing.