R v Farris

The case of R v Farris involved a prosecution for insider trading by Mr Peter Charles Pritchard Farris. Mr Farris, a director of Northern Star Resources Limited and Investmet Limited, sold shares in Northern Star before a public announcement of a large-scale sell-down of shares by Investmet and other directors. The key legal issues were whether Mr Farris knew or ought to have known that the information he possessed was price-sensitive and not generally available, and whether the fault element of knowledge applied to the physical element of possession rather than the physical element of the sale. The court had to determine if Mr Farris was 'consciously aware' of the information at the time of the sale.

The court examined the evidence and concluded that Mr Farris was aware of the legal prohibitions against insider trading and the requirements of Northern Star's Share Trading Policy. Despite his repeated requests for trading clearance being denied, he proceeded to sell his shares, acting on information he obtained through his involvement in discussions about the planned sell-down. The court found that Mr Farris had the requisite knowledge that the information he possessed was not generally available and had a material effect on the share price. It was established that Mr Farris was 'consciously aware' of the information at the time of the sale, satisfying the fault element of the offence.

The court ruled in favour of the prosecution, finding Mr Farris guilty of insider trading. The final orders of the court included the imposition of penalties and potential disqualification from being a director of a corporation.