Dissemination of information about illegal transactions

Offence title:

Dissemination of information about illegal transactions

Act:

1041D Corporations Act

Offence:

A person must not, in this jurisdiction, or elsewhere, circulate or disseminate, or be so involved, a statement or information to the effect that the price for trading in financial products in financial market, in this jurisdiction, will or is likely to, rise, fall or be maintained, because of a transaction, or other act or thing done, in relation to those financial products, if:

(a)   The transaction, or thing done, would be a contravention of s. 1041A, 1041B, 1041C, 1041E or 1041F; and

(b)   The person or their associate:

                         i.         Has entered the transaction or done an act or things; or

                       ii.         Has or may receive, directly or indirectly, a consideration or benefit for circulating or disseminating, or authorising the circulation or dissemination or, the statement or information.

Note: Failure to comply with this subsection is an offence: s. 1311(1).

Note: Failure to comply with this subsection is a contravention: s.1317E and 1317S.

Penalty:

15 years imprisonment

Summary/Indictable/mixed:

Indictable

Jurisdiction:

District or Supreme Court

How committed:

A managing director publishes a document that explains the company has invented a widget and directly distributes this to the market with the suggestion it will increase share values by 25%. In making the announcement, it breaches the relevant section. The managing director’s partner has commenced trading in the shares to take advantage of the announcement.

Important note:

Defence: For defences to a prosecution based on this section, see Division 4 - Defences, relief and limits on liability: s.1044A General defence or relief for publishers and 1044B Limit on liability for misleading or deceptive conduct.