A former investment banker who released fake news to the stock market about a small mining explorer getting a $100 million line of credit from China has been sentenced to one year in jail.
Benjamin David Kirkpatrick, 44, the former executive chairman of Waratah Resources, was on Monday sentenced to 12 months imprisonment to be served as an intensive correction order.
Mr Kirkpatrick pleaded guilty to aiding and abetting Waratah to breach its continuous disclosure requirements and to authorising the false information being released to the market.
The charges related to Waratahs October 2013 announcement that it had established a $100 million trade finance facility with the Bank of China when no such facility had been established or agreed upon, according to the Australian Securities and Investments Commission.
Mr Kirkpatrick then failed to correct the announcement for 11 days leading to the company to breach its legal obligations.
As a result of his conviction, Mr Kirkpatrick is automatically banned under the Corporations Act from managing a corporation for five years.
Before his role at Waratah, Mr Kirkpatrick was a senior investment banker at Macquarie Bank and a director at UBS in Sydney.
The announcement came a time of deep financial problems for Waratah which had been its share price dwindle from 42.5 cents in 2011 to just 3.6c at the time of the announcement.
However, the announcement did not lift Waratahs share price above 4c. Waratah has since changed its business focus from minerals exploration to the technology sector through a deal with CSB Engage.
This prosecution highlights the importance of the continuous disclosure obligations to directors and officers of listed companies, ASIC Commissioner Cathie Armour said.
The integrity of our markets requires company officers to ensure that material information is made available in a timely and accurate way, she added.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.