CDirector of Public Prosecutions v Stewart
[2025] VCC 1306
•15 September 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CR-24-01043
| COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| DUNCAN JOHN STEWART |
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JUDGE: | HER HONOUR JUDGE MANOVA | |
WHERE HELD: | Melbourne | |
DATE OF PLEA HEARING: | 22 August 2025 | |
DATE OF SENTENCE: | 15 September 2025 | |
CASE MAY BE CITED AS: | CDPP v Stewart | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 1306 | |
REASONS FOR SENTENCE
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Subject:CRIMINAL LAW
Catchwords: Insider Trading
Legislation Cited: Corporations Act 2001 (Cth), s1043A(1), s1311(1); Crimes Act 1914 (Cth), s16BA; Corporations Amendment (No. 1) Bill 2010; Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018; Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018
Cases Cited:DPP v O’Reilly [2010] VSC 138; R v Glynatsis (2013) 230 A Crim R 99; Kamay v The Queen (2015) 47 VR 475; DPP (Cth) v Gregory (2011) 34 VR 1.
Sentence: 18 months imprisonment to be released on recognisance of $10,000 and to be of good behaviour for 2 years. Pecuniary Penalty order in the sum of $64,975.48
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APPEARANCES: | Counsel | Solicitors |
| For the DPP (Cth) | Mr P Doyle SC with Mr E Dober | Solicitor for the Office of Commonwealth Public Prosecutions |
| For the Offender | Ms R Shann SC with Ms J Wang | Gadens Lawyers |
HER HONOUR:
Introduction
1Duncan John Stewart, you have pleaded guilty to one rolled-up charge of insider trading contrary to s1043A(1) and s1311(1) of the Corporations Act 2001 (Cth). You committed this offence between 3 April 2019 and 10 April 2019.
2The maximum penalty for this offence is fifteen years’ imprisonment.[1]
[1]Schedule 3 of the Corporations Act 2001 (Cth)
3In addition, pursuant to s16BA of the Crimes Act 1914 (Cth), on 1 March 2019 you are believed to have committed a separate insider-trading offence. You possessed information about a proposed takeover of Kidman Resources Limited (“Kidman”) by SQM (a Chilean company). That information was not generally available and it might have had a material effect on the share price if publicly known. In that context, you procured or encouraged your brother to acquire securities. I have taken into account this separate offence, which you have admitted.[2]
[2]Section 16BA(4) of the Crimes Act. The sentence passed today for the offences on the Indictment does not exceed the maximum penalty that the Court would have been empowered to impose if no offence had been so taken into account.
Circumstances and summary of offending
4The circumstances of your offending are set out in the Summary of Prosecution Opening for Plea dated 18 August 2025 (“the Crown Opening”) and tendered on your plea,[3] the contents of which were agreed by your counsel. I will briefly set out the pertinent facts below.
[3]Exhibit 1
5Kidman was a small mining company based in Melbourne. It was founded by your brother-in-law. Its operations focused on the exploration and development of copper, gold and rare-earth element prospects in New South Wales and the Northern Territory.
6Kidman held a 50 per cent of lithium asset at Mount Holland in Western Australia. The other 50 per cent was held by SQM, as the world’s largest lithium producer. Kidman and SQM operated at Mount Holland, as joint venture partners.
7Between January 2011 and September 2019, Kidman was listed on the Australian Securities Exchange.
8At the relevant time, your wife worked as an operations manager and your brother-in-law was chief executive officer at Kidman.
9By January 2019, Kidman and SQM were in discussions about SQM making a takeover offer. At around this time, SQM sent a non-binding proposal to Kidman offering $1.90 cash per fully-paid ordinary share in Kidman. A counterproposal of $2.50 per share was made.
10By mid-February 2019, the Kidman board had met to consider a proposed timetable for SQM’s due diligence on the company. A proposed price of $2.30 per fully-diluted Kidman shares had been put forward.
11By late February 2019, you discussed your wife’s ongoing employment with Kidman with your brother-in-law. He told you that if Kidman was bought out by SQM she would not have a job. An SQM takeover of Kidman could happen in early March, with a forecast bidding war starting at $2.40 per share.
12On 1 March 2019, SQM withdrew its proposal to acquire Kidman. On the same day, you exchanged a series of text messages with your brother, Ashley. You confirmed the proposed takeover and encouraged your brother to purchase stock. Significantly, you indicated that, over the coming fourteen days, you and he should accumulate as much stock as possible. You told him you had very little spare cash and asked your brother to fund it, indicating “‘we’ could make a decent gain”. You indicated to him this was ultra-sensitive information and to exercise the required discretion.
13Although the prosecution does not allege that any shares were in fact purchased as a result of those messages, pursuant to s16BA of the Crimes Act, they constitute conduct which meets the definition of insider trading and which, you have admitted.
14The proposed acquisition by SQM fell through. After this, Kidman commenced negotiations with Wesfarmers.
15Wesfarmers is a diversified business operating in various enterprises, including resources, chemicals, energy and fertilisers.
16On 11 March 2019, Kidman and Wesfarmers entered into a confidentiality agreement relating to the proposed takeover. The agreement recognised the exchange of information pursuant to the agreement as inside information.
17On 1 April 2019, Kidman officers were advised that it was almost certain Wesfarmers would make a proposal for takeover, following a meeting of its board that week.
Possession of inside information
18The prosecution alleged, and you accept, that some time from late March, but prior to 3 April, you became aware that Wesfarmers was intent on acquiring Kidman. The prosecution made no allegation as to the source of this information.
19Between 10 January and 1 May 2019, Kidman’s trading price range varied, having traded as low as $1.05 on 15 January 2019 and as high as $1.48 on 4 March 2019.
20On 3 April 2019, you placed a purchase order for Kidman shares through your broker. The order was executed that day and you acquired 65,845 Kidman shares for a total of $80,635.47.
21On 9 April 2019, you placed a further order through your broker. The order was executed the following morning and you thereby acquired a further 38,760 Kidman shares for a total of $50,000.40.
22The total of both transactions was $130,635.87, the sum relevant to the rolled-up charge to which you have pleaded guilty.
23On 2 May 2019, it was publicly announced to the Australian Securities Exchange that Wesfarmers had made a takeover bid for Kidman, with numerous media outlets reporting that the cash for share price was $1.90.
24Later that day, you placed an order to sell all of your 320,821 Kidman shares. On that day 100,000 of the shares were sold at $1.85 and the balance was sold at $1.88 on 3 May 2019. The profit realised by you from the purchase and subsequent sale of the shares was approximately $64,975.48, or around 50 per cent of the investment, in the space of about one month.
25On 24 February 2021, you participated in a voluntary recorded interview with investigators regarding the purchase and sale of the Kidman shares in the period 11 April 2019 to 2 May 2019. During that interview, you provided information to investigators about your share-trading account and your agent, and details about your family. You told investigators there had been:
“… ‘speculation generally at the time, all around the place … it was even in the news that, there may have been a takeover coming for that particular company’.”[4]
[4]The Crown Opening at paragraph [40g.]
26You made no admissions to having committed any offence and have provided no other assistance to police.
27On 28 July 2023, you were charged with a number of offences which were ultimately resolved to one rolled-up charge on indictment.
28A contested committal was held between 28 and 30 May 2024.
29On 26 June 2024, you were committed to stand trial in this court.
30On 21 July 2025, you accepted my sentence indication, namely, that if you were to plead guilty to the rolled-up charge, the Court would not impose on you a sentence more severe than imprisonment with release forthwith on a recognisance release order.
31Your plea of guilty has significant utilitarian value. By it, you have saved the State the cost of a trial which would not have been without complexity. You have been willing to facilitate the course of justice. Your plea is evidence of remorse and preparedness to take responsibility for your actions.
32Although a committal was held in this matter, it is conceded by the prosecution that the committal was not a waste of time and enabled the matter to be sensibly resolved.
33I accept the submission on behalf of the prosecution that your preparedness to cooperate by paying a pecuniary penalty order also reflects your willingness to facilitate the course of justice.
Current sentencing practice
34The offence originally carried a five-year maximum term of imprisonment.
35On 13 December 2010,[5] this was increased to ten years. In the Second Reading Speech for the Corporations Amendment (No. 1) Bill, the parliamentary secretary to the treasurer said:
“The bill contains two separate but related sets of measures, both aimed at improving investor trust and confidence in the Australian share market as well as targeting misconduct.
…
It is essential that the penalties reflect the serious impact that breaches of these provisions have on financial markets.
[5]Schedule 1 Cl 20 of the Corporations Amendment (No. 1) Bill 2010. This Bill received Royal Assent on 24 November 2010. The provisions came into force on 13 December 2010 by Proclamation of the Governor General dated 8 December 2010.
The benefit that can be gained from engaging in insider trading or market manipulation often far outweighs the maximum penalty that can currently be imposed for a breach.”[6]
[6]Commonwealth Parliamentary Debates, House of Representatives, 29 September 2010 Member for Lindsay, David Bradbury, 112-113
36On 12 March 2019,[7] less than a month before the dates on the indictment, the penalty was again increased, this time to 15 years. The Explanatory Memorandum to the amending Bill provided that the existing penalties for a range of white-collar criminal offending under the Corporations Act did not currently reflect the seriousness of the offences.[8]
[7]Clause 2 of the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 set out that Schedule 1 commenced on 12 March 2019 (receipt of Royal Assent). Schedule 1 of the Bill amended the penalty of s1043A.
[8]Explanatory Memorandum Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 Cl 1.16
37The 15 year maximum shows the seriousness with which Parliament regards offending of this type. It provides a yardstick by which an appropriate sentence is to be measured.
38The prosecution and your counsel each provided helpful reference to a number of relevant cases setting out current sentencing practice, spanning the changes to the maximum penalties. These provide a useful guide as to penalty in similar cases, but my task is to sentence you in your unique circumstances.
39I have been greatly assisted by all counsel with regard to current sentencing practice and on the plea generally.
Sentencing considerations – the Commonwealth Sentencing Scheme
40Pursuant to s16A of the Crimes Act, the Court must have regard to a number of matters in imposing a sentence that is of a severity appropriate in all the circumstances of the case.
Nature, circumstances and objective gravity of the offence
41By your plea, you admit that between 3 and 10 April 2019, you purchased the Kidman shares while in possession of information which was not generally available and knowing that, if available, it might have had a material effect on the market price of those shares. The rolled-up charge relates to two instances of purchase of shares while in possession of the insider information.
42This offending was calculated. You were on notice of the proposed takeover by SQM and aware of the potential for profit. When the tide changed to Wesfarmers, you took advantage of the situation. I accept the submission by the prosecution that the offending cannot be described as spontaneous, ill-considered or opportunistic. You had time to think about what you were doing and its potential consequences.
43The message to your brother in the lead-up to the offending allows an inference to be drawn that you were looking to make a “fast buck”. You encouraged him to gradually accumulate as much purchased stock of Kidman as possible and said “‘we’ could make a decent gain here”.[9] I accept this relates to a proposed takeover by SQM which did not in fact occur. However, I consider it relevant to the charged offence, because the context in which the takeover by Wesfarmers actually occurred was the failed takeover by SQM, only a month after the messages were exchanged. There is a significant temporal and contextual connection between the message you sent and the matters which make up the rolled-up charge.
[9]This statement relates to the s16BA notice and relates to the proposed takeover by SQM which is not the subject of the rolled-up charge.
44As it turned out, you ultimately did make a gain as a result of the insider trading when the Wesfarmers takeover was announced, but your bother never purchased any stock.
45There were two transactions constituted by the simple purchase of stock through an agent and a trading account, both able to be readily linked to you. I accept the submission made on your behalf that the transactions were relatively unsophisticated, with no attempt at subterfuge.
46It cannot be said that you were a true insider,[10] in the sense that you possessed first-hand information. You did not obtain the information in the course of employment, or as an office holder in the relevant companies. I accept the submissions made by your counsel that, for this reason, you cannot be considered to have acquired the information in a position of trust.
[10]DPP v O’Reilly [2010] VSC 138 (“O’Reilly”) at paragraph [18]
47Although profit is a relevant factor, the better indicator of the extent of the criminality is the size of the transaction and the best way to assess that is by reference to the amount of money invested or placed at risk.[11]
[11]R v Glynatsis (2013) 230 A Crim R 99 at 109, paragraph [54] “Glynatsis”, cited with approval in Kamay v The Queen (2015) 47 VR 475 (“Kamay”) at 484-5, paragraph [31]
48Objectively speaking, the sum invested by you was not insignificant. Neither was the profit realised. However, I accept that it is at the lower to mid-range of the scale for this type of offending, where profits are seen at a million and above.[12] While there was no evidence as to your anticipated gain, I consider that, in light of all the matters in the Crown Opening, you must have anticipated some gain.
[12]Table of cases headed “Insider Trading Appellate Authorities”.
49I accept that there was publicly-available information about the possibility of a takeover and in April 2019 there were rational reasons to purchase stock in Kidman. However, the information you possessed was, as the prosecutor put it, a “step-up” from what was publicly available. Further, your position was not one of being a member of the public, speculating on newspaper reports and investing for rational reasons. Such people are not committing a crime when they buy and sell shares.
50The prosecution has not identified the source of the information. I accept the submission made on your behalf that if the prosecution could identify the source, that would enable an understanding of the reliability of the information for the purposes of an objective assessment. However, subjectively, you must have considered the information to be reliable. Otherwise, you would not have taken the steps you did, in circumstances which left you open to the possibility of investigation and prosecution.
51For all these reasons, I find the objective gravity of your offending and your moral culpability to be in the lower mid-range for offending of this type.
Victim impact, loss caused by the offence and general deterrence
52The offence of insider trading is, in effect, a form of fraud. Offending of this type strikes at the heart of the integrity of the Australian Securities Exchange. It causes losses to other investors in an unfair way. It shatters public confidence in the stock market, which is essential for its operation. In this sense, the victim of the crime is the integrity of the market.[13]
[13]Kamay at paragraphs [45] and [49]
53These types of offences can be committed with ease, but their detection is often difficult. They can yield substantial profits and have the potential to cause substantial losses to third parties.[14]
[14](Ibid) at paragraph [51]
54It is therefore important to impose a sentence which aims to deter others contemplating this type of offendinga. It has been said that:
“… The fact that people of otherwise good character and compelling personal circumstances are tempted to engage in such conduct emphasises the need for the clear deterrent that insider traders should expect to go to gaol.”[15]
[15]McCallum J in Glynatsis, cited with approval in Kamay at 491, paragraph [52]
55I accept the submissions made by the prosecution that general deterrence is a significant sentencing purpose in my task. So much has been consistently underscored by the Court of Appeal. In particular, in the case of white-collar crime, general deterrence is considered likely to have a more profound effect. As the Court of Appeal has said:
“‘… White collar criminals are likely to be rational, profit-seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished. Further, white collar criminals are also more likely to be first time offenders who fear the prospect of incarceration.”[16]
[16]DPP (Cth) v Gregory (2011) 34 VR 1 at 16, paragraph [53], cited with approval in Kamay at 491, paragraph [53]
Personal circumstances and deterrent effect
56You were born in 1965 in Melbourne. You are married and have three children. At the time of the offences you were 53 years old. You are now 60 years old. You are otherwise a person of good character and until this offending have led an exemplary life.
57Your late father was a film producer and banker. Your late mother was a TV presenter who was involved in a significant amount of charity work. It is commendable that you have picked up where your mother left off and maintain your involvement with charity work.
58Eight character references were tendered on your behalf.[17] Your referees are upstanding members of the community who speak highly of you, your family and your parents. They were surprised that you could be involved in offending of this type, as they know you to be an honest, hardworking and trustworthy person. They attest to your good character as a friend, father, husband and businessman. You enjoy the love and support of family and friends and otherwise have good standing in your community.
[17]Exhibit “B”
59Of significance to my task, your referees have observed the toll this case has taken on you and your family. It has been going for five years. During this time, they have observed your family suffering emotional distress and fear that you might be incarcerated. Your children have been subjected to bullying and have had to change schools due to the media reporting about the case. Your physical health has also declined. One referee described you and your family as having been humiliated as a result of the criminal charges and the reaction of your community to media reporting about them. While it may be said that these are all flow-on effects from your conduct, it has also been recognised that public humiliation can itself contribute to achieving general deterrence.[18]
[18]O’Reilly at paragraph [36]
60I accept the submissions made on your behalf that this offending is out of character for you and that you are profoundly embarrassed and ashamed of your actions. The delay of five years is also of some significance. During the delay, you have had this matter hanging over your head and both you and your family have been concerned about the possible outcome. To compound matters, your family have suffered emotional consequences as a result of publication of the details of the offence. Needless to say, you have not committed any offences during this period.
61The combination of these matters lead me to conclude that the criminal process, and the effect of any sentence that I impose on you, will have a significant deterrent effect. As a result, I consider you are unlikely to re-offend in future.
Adequate punishment
62Given the importance of general deterrence in offending of this type, the current sentencing practice and the need for adequate punishment, imprisonment is well and truly within range for this type of offending. So much has been conceded by your counsel.
63However, given the matters I have just outlined and the prosecution concession[19] that it would be within range for your sentence to be served by way of recognisance, I propose to sentence you as follows:
[19]Concession that release on recognisance is within range was made during the sentence indication hearing on 21 July 2025
64Please stand Mr Stewart.
65On the charge of insider trading, you are convicted and I order that you are to be imprisoned for 18 months. Upon entering into a recognisance of $10,000, conditional upon you being of good behaviour for 2 years, you are to be released forthwith. This sentence starts today.
66But for your plea of guilty, the sentence I would have imposed would have been 2 years and 3 months, to be released on recognisance after serving a period of 2 months’ imprisonment, and to be of good behaviour for three years.
Pecuniary penalty order
67Pursuant to s20(1)(iii) of the Crimes Act, I am satisfied that you have derived benefits from the commission of the insider-trading offence on the Indictment and I order that you pay the sum of $64,975.48 within 4 weeks of the date of this order. I include this order as an extra condition of your recognisance order.
Effect of orders and breach
68The effect of these orders is that you have been granted conditional freedom and are required to be of good behaviour for 2 years.
69If you breach the order, you can be dealt with for the breach and could be brought back before me to answer for the breach and to be re-sentenced. At that time, the Order may be revoked, you may forfeit the $10,000 recognisance and you may be required to serve a term of imprisonment. At any time you, or the Commonwealth Director of Public Prosecutions, may apply to vary or discharge the order.
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