Former Macquarie trader given 18 month jail sentence

Sydney Morning Herald

Friday April 1, 2011

Leonie Lamont

THE Chinese walls that Macquarie Bank put in place - its risk management procedures, restrictions on personal trading, and staff training protocols to counter the insider trader bogyman of the investment world - were easily evaded by an associate director at the bank, Oswyn de Silva.De Silva, 37, was sentenced yesterday to a term of 2�� years for insider trading - 18 months in jail and 12 months on a good behaviour bond. His trading activities from December 2006 to April 2007 had not been detected by Australian authorities. He traded from a computer at a cafe in the Macquarie Bank Sydney headquarters via a secret online account he had with a Singapore broking firm. It was was not until mid-2008 that the Monetary Authority of Singapore alerted Australian authorities about the suspected insider trades, which had netted de Silva $1.4 million.At the time of de Silva's illegal trading, the offence carried a maximum five years' jail and/or a $220,000 fine. Last December the penalty was increased to 10 years and/or a $495,000 fine.Justice Terence Buddin said he had made discounts to de Silva's sentence on the grounds of his early guilty plea, his prior good character, onerous bail conditions during the past six months, adverse publicity and his "significant fall from grace", and his HIV status. De Silva has not repaid any of his illegally made funds.The NSW Supreme Court heard that de Silva described the work environment at Macquarie as "toxic" and felt discriminated against because of his homosexuality. He began at the bank in 2005 on a salary of $175,000, which had risen to $220,000 in 2007, and also received $680,000 in bonus and profit share.When he left the bank's London office in 2008 because of ill health, and was given a $900,000 severance cheque, he felt "guilty about his previous antipathy to his employer". Funds went on a $198,000 Porsche, an $800,000 apartment in Malaysia, cocaine and cannabis.De Silva worked in real-estate-related securities in the Asia region for Macquarie. In a form of insider trading known as front running, de Silva placed his orders before Macquarie Investment Management's big trades - and then sold to MIML at a profit."It remains the case this was conduct of a true insider," Justice Buddin said. "Such a person is placed in a position of trust and because he or she has greater access to inside information than would otherwise be the case, there exists a correspondingly greater capacity to cause damage to the securities market and those who invest in it."He said the trading happened shortly after de Silva discovered he was HIV positive, but that was not an excuse: "[The] offender sought to act as he did in order to enrich himself." De Silva will be deported to Malaysia at the expiry of his term.TRADING PUTS SOME INSIDE2010 The Orion Asset Management equities dealer JohnHartman jailed for 4�� years. He made $1.9 million and repaid $1.6 million.2009 Queensland Gas company secretary Mukesh Panchal sentenced to two years' jail.2007 Aristocrat Leisure corporate affairs consultant Margot McKay given 15 months' periodic detention.2007 Wilson HTM analyst Troy Reddell fined $8000.2005 Cisco Systems executive Richard Frawley put on 2�� years' weekend detention.2004 Harts Australasia executive director Max Sweetman given 18-month suspended sentence (three months served).2004 Real estate agent Bart Doff put on 350 hours' communityservice and fined $37,255.2003 Rene Rivkin given nine months' periodic detention and fined $30,000.1996 Macquarie Bank executive Simon Hannes, served 19 months for insider trading.