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Australia fines Hochtief for insider trading

Staff Writer | December 10, 2016
The Federal Court in Australia has found that German construction group holding company Hochtief engaged in insider trading and has ordered it to pay a financial penalty of $400,000, as well as ASIC's legal costs.
Hochtief
Down Under   $400,000 plus legal costs
In reaching its decision, the Federal Court found that:

- on 14 January 2014, at a meeting of the Audit Committee of Leighton Holdings Limited (now called CIMIC Group Limited), Hochtief AG, through its chief financial officer, came into possession of information in relation to LEI’s expected financial result for the year December 31, 2013, which information it ought reasonably to have known was inside information;

- on January 27, 2014, whilst in possession of the inside information, Hochtief AG extended the completion date for the acquisition of Leighton Holdings shares by its subsidiary Hochtief Australia Holdings Limited (Hochtief Australia) from January 31, 2014 to February 14, 2014 (Variation of Instruction);

- on January 29, 2014, whilst in possession of the inside information, Hochtief AG issued the Variation of Instruction to various directors and officers of Hochtief Australia, thereby procuring Hochtief Australia to acquire shares in Leighton Holdings as a result; and

- Hochtief AG procured Hochtief Australia to acquire 200,000 Leighton Holdings shares for $3,244,156.97 (including fees).

- ASIC commenced its proceedings against Hochtief AG on February 2, 2016. Hochtief AG admitted the alleged contravention in a Statement of Agreed Facts.

On April 18, 2016, the Court found, as contended for by Hochtief AG, that Hochtief AG procured Hochtief Australia to acquire Leighton Holdings shares on one trading day being 3 February 2014.


 

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