A former IT consultant has been jailed for three years for engaging in insider trading after gaining unauthorised access to a stock tip publisher's network.
Steven Oakes was charged in May 2018 with 115 offences for allegedly accessing the Wi-Fi network of the Melbourne-based financial publisher Port Phillip Publishing (PPP) with the "intention of using the information to engage in insider trading".
He was sentenced by Melbourne County Court on 25 June and ordered that he be released after serving 18 months.
Oakes pleaded guilty to a total of 11 charges for insider trading, unauthorised access to data with the intention to commit a serious offence (insider trading) and the alteration of electronic devices required by the Australian Securities and Investments Commission (ASIC).
ASIC alleged that in January 2012, Oakes gained unauthorised access to inside information from the private computer network of a Melbourne-based financial publisher.
In a statement, it said that between January 2012 and February 2016, Oakes hacked into the private computer network of PPP and was found to have intercepted and decrypted Wi-Fi data to obtain the network login credentials of its staff.
"He did this with the intention of using PPP’s information to engage in insider trading," ASIC stated.
The inside information contained recommendations for purchasing shares in particular ASX-listed companies from unpublished PPP stock recommendation reports. The publication of a buy recommendation by PPP for a particular company typically caused an increase in that company’s share price.
"Mr Oakes used this inside information on 70 occasions to buy shares in 52 different companies, before the reports with the buy recommendations were published. He made profits from selling the shares soon after the publication of the reports," ASIC said in a statement.
During its investigations ASIC requested him to immediately produce particular electronic devices, which he only did at a later date with ASIC's forensics finding data had been deleted.
"Technology-enabled offending, including cyber-related market misconduct, has been a priority for ASIC’s Enforcement teams," ASIC Commissioner Cathie Armour said.
"Despite the sophistication of cyber criminals, ASIC can identify and investigate suspicious market activity connected to computer hacking activities, as it did in the case against Mr Oakes. Traders should be aware that ASIC continues to focus on cyber-related offending," Armour said.