03-170 Rene Rivkin sentenced to jail
Thursday 29 May 2003
Mr Rene Walter Rivkin was today convicted and sentenced in the NSW Supreme Court on one count of insider trading in the shares of Qantas Airways Limited (Qantas).
Mr Rivkin was sentenced to nine months imprisonment, to be served by way of periodic detention, and was fined $30,000.
On 30 April 2003 Mr Rivkin was found guilty by jury on one count of insider trading in contravention of section 1002G(2) of the Corporations Act, following a 21-day trial in the NSW Supreme Court before Justice Whealy.
Justice Whealy today entered a conviction against Mr Rivkin and recorded a sentence.
A statement by Mr David Knott, Chairman of the Australian Securities and Investments Commission (ASIC) follows this release.
Background
ASIC alleged that Mr Rivkin contravened the insider trading provisions of the Corporations Act when, on 24 April 2001, he purchased 50,000 Qantas shares.
The shares were purchased in the name of Rivkin Investments Pty Ltd, a company of which Mr Rivkin is the sole director.
The charge followed an investigation by ASIC into the circumstances surrounding trading in Qantas shares shortly before Qantas announced that it would take over the operations of Impulse Airlines.
Mr Rivkin has lodged a notice of intention to appeal in respect of the jury decision.
End of release
Attachment to release: Statement on Conviction of Rene Rivkin
Mr Rene Rivkin was today convicted of the criminal offence of insider trading.
Insider trading is a serious offence that undermines the fairness and integrity of our stock market.
Mr Rivkin has sought to trivialise these proceedings from the time they were first instituted. In doing so he mocks every investor who expects fair dealing and proper disclosure in share markets transactions.
The fact that he made a relatively small profit from the transaction does not alter its criminal nature. The offence he committed was against the sellers of 50,000 QANTAS shares who thought they were dealing in a properly informed market. Instead they were dealing with a person who had gained inside information and withheld it from them. If those sellers had not sold until after the announcement about Impulse Airlines their shares could have increased by more than $30,000.
Over the past decade Australia has strengthened its determination to make our markets fairer for investors. Stronger insider trading laws, improved surveillance of suspect trading by the ASX and active enforcement by ASIC have all contributed to a market of increased integrity.
None of this should come as a surprise to Mr Rivkin. He is a stockbroker of long experience and influence in our markets. His deliberate decision to flout the law, even in a small transaction, was a betrayal of the market in which he has been a prominent trader for many years.
Mr Rivkin has attempted to divert attention from the serious implications of his misconduct with allegations that he was unfairly targeted by ASIC because he is a ‘tall poppy’. That is not correct. When ASIC commenced its investigation into suspect trading in QANTAS shares Mr. Rivkin's involvement was unknown to us. When the full evidence of the transaction emerged it was inevitable that he be charged. That evidence has now been considered and accepted by a jury, and a conviction recorded by the Supreme Court. Mr Rivkin has no-one to blame for this other than himself.
I want to acknowledge the very difficult task of the jury in this matter. Insider trading cases are among the most complicated types of offences under our corporations law. It is no easy matter for a jury to come to grips with the various legal ingredients of the offence, and I believe that the members of this jury deserve the thanks of all investors in our market. I also thank the office of the Commonwealth DPP for its professionalism in the preparation and prosecution of the case.
The decision of Justice Whealy to impose a sentence of nine months imprisonment to be served by periodic detention is the decisive judgement on the seriousness of Mr Rivkin's offence. By operation of law he is now banned from managing any corporation for the next five years, except by permission of the court.
To any who suggest that the absence of a full time custodial sentence somehow diminishes the seriousness of the offence, I say ‘think again’. Mr Rivkin broke the law and was caught. He now has a criminal conviction against his name. That fact will not be lost on others who may be tempted to test their luck with small inside trades.
In the light of today’s sentencing by Justice Whealy ASIC will review the status of any license held by Mr Rivkin or any company in which he has a relevant interest. Such review will be conducted in accordance with legal requirements which will include an opportunity for Mr Rivkin to make submissions to ASIC. While I expect this process to commence in the near future, ASIC will observe strict confidentiality until hearings are concluded and decisions finalised.
I conclude my statement by noting that Mr Rivkin has lodged a notice of appeal against the jury's verdict and is expected to also appeal today's sentence.
David Knott
Chairman
Australian Securities and Investments Commission
28 May 2003
ASIC Website: Printed 07/31/2010
