A FORMER senior executive with British Gas has been found guilty of using inside information when trading in shares of Queensland Gas Co before its takeover by the British-based company.
A Supreme Court jury found Stuart Fysh, formerly an executive vice-president at British Gas, now known as BG Group, guilty of two insider trading charges.
The charges were brought by the Australian Securities and Investments Commission, relating to the purchase of shares in Arrow Energy in mid-2007 and in Queensland Gas in late 2007.
ASIC argued that Fysh was in possession of inside information relating to British Gas' interest in Arrow and Queensland Gas at the time he acquired the shares. He made approximately $640,000 from his trades in Queensland Gas, ASIC said.
Regarding the purchase of shares in Arrow, Fysh had told the court he had been impressed by the company's prospects while visiting a trade fair. He also said he had looked at some presentations on Arrow's website, documents available on the Australian Securities Exchange and a petroleum industry news website that helped him decide to invest in the company.
He was found guilty of two charges relating to his trading in Queensland Gas shares but not guilty of two charges regarding his purchase of Arrow shares.
Based in London at the time of the trades, Fysh has lived in Melbourne since being charged and having to surrender his passports by court order.
He faces a prison sentence of up to 10 years and will be sentenced on a date to be fixed.
ASIC has more than a dozen criminal cases for insider trading and market manipulation under way, with an increasing number of suspects pleading guilty to avoid lengthy jail terms.
Former PwC senior consultant Nicholas Glynatsis pleaded guilty recently to nine charges of insider trading, while Hanlong Mining executive Calvin Zhu pleaded guilty to three insider trading charges in July.
ASIC has called recently for extra powers to tap telephone calls and access emails as it seeks to crack down further.