John Kay Jin Khoo. Photo: Sahlan Hayes
Former high school friends have pleaded guilty to insider trading in illegal trades worth more than $250,000.
John Kay Jin Khoo, of Bulimba, Queensland, and Jia Yao Mathew Tan, of Waterloo, Sydney, pleaded guilty on Tuesday to insider trading charges in Sydney’s Downing Centre Local Court.
The charges were brought by the Australian Securities and Investments Commission.
The alleged offences occurred between 2010 and mid-2011, when Mr Khoo was working as an investment banking associate at the Royal Bank of Canada (RBC) in Sydney.
Mr Khoo pleaded guilty on Tuesday to four charges of communicating inside information to his friend, Mr Tan, and a second man about a series of proposed takeovers and acquisitions in the resources sector.
It is alleged Mr Tan used that information to acquire, and to profit from, a large number of shares and financial derivatives products known as “contracts for difference,” or CFDs.
It was while working at RBC that Mr Khoo gained inside information on:
- The proposed acquisition Macarthur Coal Limited, by Peabody Energy Corporation and ArcelorMittal SA.
- The proposed takeover of Caledon Resources PLC, by Guangdong Rising Assets Management Co.
- The proposed takeover of Mantra Resources, by JSC Atomredmetzoloto.
It is alleged that Mr Khoo’s told his friend Mr Tan about those takeovers, and that Mr Tan used that information to acquire financial products relating to Macarthur, Caledon, and Mantra with a total value of $257,880.
As a result of those trades, it is alleged Mr Tan made a total gross profit of $85,230.
It is not alleged that Mr Khoo received any financial reward in return for providing Mr Tan with information which led to the illegal trades.
The two friends have known each other for about 15 years, since attending high school together, and have been “very close friends” throughout this period.
They lived together between 2007 and 2010, and Mr Khoo was the best man at Mr Tan’s wedding in 2011.
ASIC investigations are still ongoing into the above-mentioned second man, who was identified in the statement of facts tendered by the court as David Thien Anh Luong.
An ASIC spokesman said the corporate regulator had no comment on Mr Luong.