Former Lonsec chief pleads guilty

The former head of stockbroking firm Lonsec has pleaded guilty to insider trading. Norman Graham has admitted in the Melbourne Magistrates' Court to two counts of insider trading, related to trades he ordered in February 2010 while the managing director of Lonsec. He ordered the sale of 200,000 shares in Clean Seas Tuna, knowing ahead of the public release of the company's accounts that it had suffered a loss of more than $10 million in the six months to the end of December 2009, the Australian Securities and Investments Commission alleged. Mr Graham was also aware Clean Seas' was having problems with illness in its young tuna stocks. The day after Mr Graham's trades were made, the company released its financial accounts and announced its problems with fish illness, causing a big fall in its share price. Mr Graham has been bailed and will face a plea hearing in May.

By InvestSMART · 2 Mar 2013

By InvestSMART ·
2 Mar 2013

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Frequently Asked Questions about this Article…

What happened in the Lonsec insider trading case involving Clean Seas Tuna shares?

The former head of stockbroking firm Lonsec, Norman Graham, pleaded guilty to two counts of insider trading after ordering the sale of 200,000 Clean Seas Tuna shares in February 2010. The Australian Securities and Investments Commission (ASIC) alleged he knew the company had suffered a loss of more than $10 million in the six months to the end of December 2009 and was aware of illness in its young tuna stocks. The company publicly revealed these problems the day after the trades, triggering a big fall in its share price.

Who is Norman Graham and what did he admit in court?

Norman Graham is the former managing director of Lonsec. He admitted in the Melbourne Magistrates’ Court to two counts of insider trading related to trades he ordered in February 2010 involving Clean Seas Tuna shares.

How many Clean Seas Tuna shares were sold and when did the trades occur?

Mr Graham ordered the sale of 200,000 Clean Seas Tuna shares in February 2010, one day before the company released financial accounts and disclosed problems with fish illness.

What inside information did ASIC say Mr Graham knew before selling the shares?

ASIC alleged Mr Graham knew that Clean Seas Tuna had suffered a loss of more than $10 million in the six months to the end of December 2009 and that the company was experiencing illness problems in its young tuna stocks—information that was publicly disclosed the day after his trades.

What was the market reaction after Clean Seas Tuna made its announcement?

When Clean Seas Tuna released its financial accounts and announced problems with fish illness the day after Mr Graham’s trades, its share price fell significantly, according to the article.

What legal steps followed Mr Graham’s guilty plea?

Mr Graham pleaded guilty in the Melbourne Magistrates’ Court, was granted bail, and is scheduled to face a plea hearing in May.

What role did the Australian Securities and Investments Commission (ASIC) play in this case?

ASIC brought the allegations against Mr Graham, stating he traded on non‑public information about Clean Seas Tuna’s financial loss and fish‑health issues. The regulator’s involvement highlights its role in investigating and prosecuting alleged insider trading.

What does this case mean for everyday investors worried about insider trading and market integrity?

The case underscores that insider trading can distort share prices and that regulators like ASIC investigate and prosecute alleged breaches. For everyday investors, it’s a reminder that market-moving information is supposed to be disclosed publicly, and unexpected price falls can follow company announcements that reveal previously undisclosed problems.