GTG’S GEOFF NEWING: 22 MONTHS GAOL FOR MARKET MANIPULATION
March 23rd 2010 11:55
Thursday March 18, 2010
Daily news on ASX-listed biotechnology companies
* ASX FLAT, BIOTECH DOWN: COMPUMEDICS UP 38%; AVEXA DOWN 10%
* GTG’S GEOFF NEWING: 22 MONTHS GAOL FOR MARKET MANIPULATION
* CATHRX RIGHTS ISSUE TO RAISE UP TO $11m
* BIOTRON APPOINTS ACLIRES FOR HEPATITIS C DRUG TRIALS
* NEURODISCOVERY QUITS DRUG DISCOVERY
* FLUOROTECHNICS $105k SALE TO SAUDI ARABIA
* CSIRO’S DR YOGI KANAGASINGAM WINS E-HEALTH FULBRIGHT
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GENETIC TECHNOLOGIES
Former Genetic Technologies chief operating officer Geoffrey Newing, 44, was sentenced to 22 months gaol with a minimum of six months on five charges of market manipulation.
In the County Court in Melbourne this morning, Justice Barbara Cotterell said that through the Palomine company, Mr Newing bought 2,580,000 Genetic Technologies’ shares at an average price of 34.5 cents and the intention was to support the share price.
Justice Cotterell said 45 percent of the trades were in the last 20 minutes of trading to 4.15pm and resulted in a price increase or preventing a fall in share price.
“The effect of the trades was to maintain or create a false market,” Justice Cotterell said.
Justice Cotterell spoke at length about Mr Newing’s family background including the suicide of his father after the failure of the family farm and his care for his family, including his son from his first marriage and his five step-children with his second wife, Tamara Newing, the daughter of Genetic Technologies’ founder Dr Mervyn Jacobson.
Dr Jacobson and Ms Newing are the subjects of separate court proceedings (BD: Feb 1, 4, 2010).
Justice Cotterell said that Mr Newing’s son from his first marriage did not want to live with his mother and that Mr Newing had sole custody.
She said that concerned he might have to serve a prison sentence, the son was placed as a boarder at a leading private school in Melbourne.
Justice Cotterell said Tamara Millstein (Newing) was “close to her father and eager to please”.
Justice Cotterell said Mr Newing saw structural problems with the company and there was an expectation by the company’s board that legal action over patents could resolve some of the problems and increase the share price. However only two smaller licences ensued and “the board began to lose faith in Dr Jacobson,” Justice Cotterell said.
Justice Cotterell told the court that following the issue of search warrants on February 14, 2007, the board said Mr Newing’s and Dr Jacobson’s roles were untenable and Dr Jacobson sacked the board.
Justice Cotterell compared Mr Newing’s case to one of the stockbrokers involved, Richard Wade, who she said benefitted from about $2,000 in commissions on the trades, but cooperated fully with the Australian Securities and Investments Commission investigation.
Justice Cotterell said Mr Newing’s benefit was greater and that he was the instigator of the offending and pleaded guilty after 12 months - just before a contested trial.
She said the offence was “objectively serious …the market must be free from manipulation … [and] your actions undermine share trading”.
But Justice Cotterell said Mr Newing had shown remorse and she was “satisfied you are not likely to offend again” and had “excellent prospects for rehabilitation”.
Justice Cotterell said there were issues of general deterrence and family issues which she needed to take into account and balance, but he must be adequately punished.
She said the margin calls on shares exposed the company to disaster and there was “the dominating influence of Dr Jacobson” who failed to gain licences as hoped.
Justice Cotterell told the County Court that counsel had urged that Mr Newing was “not the instigator”.
“I make no view on Dr Jacobson,” Justice Cotterell said.
She said Mr Newing stood to benefit from his actions “but not as much as others”.
She said he sold his Toorak house and had moved to Hawthorn and was looking for work.
Justice Cotterell referred to a reference from former Genetic Technologies’ chairman Henry Bosch saying the Mr Newing was diligent and professional in the face of many difficulties, he had put the company ahead of his own personal matters and “the offending was totally out of character”.
She quoted Tamara Newing’s first husband, Kevin Millstein, who wrote a reference complimenting Mr Newing for looking after the five step-children.
Justice Cotterell said it was “clearly a very difficult sentence”, restated that Mr Newing had taken responsibility for his actions and was able to be rehabilitated, but it was “a massive error of judgment through commitment and loyalty to family” and that given the need for general deterrence she must impose a term of imprisonment.
She said the sentence would be partly suspended and sentenced Mr Newing to 18 months gaol on the first charge from today, with four further sentences of 18 months, each beginning one month later then the previous sentence, totaling 22 months in gaol, with a minimum time to be served of six months.
Justice Cotterell said that following his release, Mr Newing must post a $5,000 bond to be of good behavior for two years.
Justice Cotterell said that but for the plea of guilty the sentence would have been two and a half years with a minimum of one year to serve.
Genetic Technologies fell 0.1 cents or 2.6 percent to 3.8 cents.
By David Langsam
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