A 42-year old Australian IT consultant is going to prison for three years on charges of “insider trading, unauthorized access to data with the intention to commit a serious offence (insider trading) and the alteration of electronic devices required by ASIC,” announced ASIC (Australian Securities & Investments Commission) on Tuesday.
As per ASIC, Steven Oakes gained unauthorized access to the private computer system of Melbourne financial publisher Port Phillip Publishing (PPP). By positioning himself within Wi-Fi range, he used hacking software known as Aircrack to intercept network data and steal employee credentials and share tips. Oakes had access to buy recommendations before they were published. He used the stolen information for insider trading on 70 occasions and bought shares in 52 companies.
“The inside information was buy recommendations for shares in particular ASX listed companies from unpublished PPP stock recommendation reports,” ASIC said “The publication of a buy recommendation by PPP for a particular company typically caused an increase in that company’s share price.”
Oakes has been under investigation since 2015 when he ended up getting rid of all the evidence, but in 2016 he started cooperating with ASIC and pleaded guilty to 11 charges. He could be released in 18 months on good behavior.
‘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.”