ASIC doubles down on insider trading investigations in 2025

ASIC groups insider trading, continuous disclosure failures and market manipulation as interrelated threats that undermine the fairness, transparency and investor confidence in Australia’s capital markets. 

Under the Corporations Act 2001 (Cth) (Corporations Act): 

• insider trading is prohibited (s 1043A)
• listed entities must immediately disclose price-sensitive information (s 674)
• no one may create or maintain an artificial market (s 1041A).  

Collectively, ASIC treats these offences as threats to market integrity as each allows actors to trade on information not available to the broader market.

In 2021, ASIC commenced an investigation into Nuix Limited and its former CFO Stephen Doyle, his brother Ross Doyle, and a company controlled by Ross Doyle for insider trading, following a broker’s report of suspicious trading.[1] The investigation was finalised in September 2022 without any enforcement action, due to a lack of direct evidence of communication of the inside information from Stephen Doyle to Ross Doyle. There was no evidence that communication of inside information between them at the time of the trade were unusual. Without compelling evidence of the communication of inside information, the existence of a clear link to a possible source was circumstantial. 

In May 2023, ASIC also commenced a new investigation into suspected insider trading by Nuix’s CEO, Jonathan Rubinsztein. This investigation closed in April 2024, again due to ‘insufficient evidence’.[2] 

However, despite having insufficient evidence to commence criminal enforcement action, over the course of those investigations, ASIC obtained sufficient information through search warrants, statutory notices and examinations to expand the scope of its investigation. Ultimately, ASIC commenced civil proceedings against Nuix and its board for alleged continuous disclosure breaches, misleading or deceptive statements, and breaches of directors’ duties, in relation to Nuix’s initial public offering prospectus issued in November 2020.[3] 

In addition to this, in November 2023 ASIC laid criminal charges against Duncan Stewart for allegedly trading on inside information and allegedly procuring his brother, Ashley Stewart, to trade on inside information in March and April 2019. These trades occurred before Wesfarmers’ takeover bid for Kidman Resources Limited, which was announced on 2 May 2019.[4] On 26 June 2024, Mr Stewart was committed to stand trial on four charges of insider trading and procurement of insider trading. 

ASIC alleges that the likely source of inside information was Duncan Stewart’s brother-in-law, Martin Donohue, the CEO of Kidman Resources. 

Unlike ASIC’s investigation into Nuix, where no unusual communication was found between the parties, ASIC described communications between Mr Stewart and Mr Donohue leading up to the trades as ‘frequent’ and ‘intense’.   

In March 2024, ASIC successfully prosecuted Cameron Waugh, a corporate adviser who purchased shares in Genesis Minerals Limited in September 2021 after receiving correspondence and a draft ASX announcement about a proposed a restructure of the Genesis board to include an experienced mining executive.[5] Mr Waugh pleaded guilty in March 2024 and was sentenced to two years’ imprisonment. 

These recent cases highlight the breadth of matters attracting ASIC’s attention as a corporate watchdog. 

Given ASIC’s recent focus on strengthening investigation and prosecution of misconduct damaging market integrity, and in particular insider trading, a review of the decision in Federal Court proceedings in ASIC v Citigroup Global Markets Australia Pty Ltd provides a timely reminder for companies to ensure that strong barriers are in place to prevent communication of inside information, where potential conflicts could arise.[6]

In Citigroup, ASIC alleged, amongst other things, two insider trading offences, claiming Citigroup traded client shares while separately advising on a takeover. The Federal Court dismissed both claims. 

In the first alleged offence, the Court held that the employee responsible for the trade was not an ‘officer’ of Citigroup within the meaning of section 9 of the Corporations Act and so no knowledge of inside information could be attributed to Citigroup. 

In the second alleged offence, ASIC established that an officer or officers of Citigroup possessed inside information. However, Citigroup successfully relied on a defence under section 1043F of the Corporations Act, demonstrating it had effective Chinese walls in place to prevent inside information being communicated by the officer of the Company to the person who made the trade. 

Boards should therefore:

• limit access to deal-sensitive information

• enforce clear disclosure processes

• monitor trading by related parties. 

Where concerns arise about potential trading during blackout periods, companies should have external advisers review trading activity or communications plans to C-suite executives in advance of the blackout periods. Our team regularly advises on these issues, including reviews of trading activity, communications and plans for trading by senior executives and CEOs. 

ASIC has a range of investigative powers under the Corporations Act, Australian Securities and Investment Act 2001 (Cth) (ASIC Act), and the Crimes Act 1914 (Cth). These powers include the execution of search warrants, issue of statutory notices and conduct of examinations. Along with ASIC’s increased focus on litigation and enforcement, companies can expect to see an increased use of its investigatory powers in investigations into insider trading. 

One commonly used power is the issue of a notice under section 33 of the ASIC Act, requiring companies required to produce ‘specified books’ that relate to the affairs of a company – such as board minutes, emails and other correspondence, and bank and trading account information – within a defined period. Such notices often arise early in ASIC’s probe into a company. 

In some cases, ASIC may carry out a more covert investigation and execute search warrants at an appropriate time, where there is a risk that evidence might be destroyed if an investigation was suspected. 

Following the initial document-gathering phase, ASIC often issues examination notices under section 19 of the Act, compelling a person who can give information relevant to an investigation to attend examinations and answer questions on oath or affirmation. 

Companies in receipt of a statutory notice to produce, or whose employees, directors or officers are in receipt of an examination notice should act quickly to respond to those notices. 

A coordinated initial response including engagement of legal representation can help to clarify the scope of ASIC’s investigation, avoid unnecessary production, reduce costs, and can demonstrate cooperation with ASIC’s investigation.