Sonray chief in guilty plea
Russell Andrew Johnson, 41, on Wednesday pleaded guilty to theft, fraud, false accounting, and submitting a false document to the corporate watchdog, the Australian Securities and Investments Commission.
Victorian Supreme Court judge Cameron Macaulay also lifted a suppression order that banned the publication of Johnson's guilty plea in May to a further three charges. The Toorak resident faces a maximum of 10 years' jail for each of the state offences of false accounting, theft and deception and a term of five years' imprisonment for submitting a false document to ASIC.
Sonray chief executive and Johnson's brother-in-law, Scott Murray, is serving a five-year jail term after pleading guilty in 2011 to fraud and theft offences. Sonray specialised in contracts for difference, or bets on the movement of stock prices. It collapsed in June 2010 with a shortfall to its 3500 clients of $46.7 million.
The charges relate to Johnson using client funds for personal use and to guard against margin calls from the company's financier Saxo. Johnson also told auditors a $5.2 million equity injection came from "a network of family and friends" rather than client accounts.
Johnson was granted bail and will appear at the Supreme Court on November 11 for a sentence hearing.
Frequently Asked Questions about this Article…
Sonray Capital Markets, a broker that specialised in contracts for difference (CFDs), collapsed in June 2010. The company left a shortfall of $46.7 million affecting about 3,500 clients. Its founder and sole director, Russell Andrew Johnson, later pleaded guilty to multiple criminal charges related to the collapse.
Russell Andrew Johnson pleaded guilty to seven charges including theft, fraud, false accounting and submitting a false document to the corporate watchdog, the Australian Securities and Investments Commission (ASIC). He originally faced 24 charges and a suppression order about some pleas was later lifted.
When Sonray collapsed in June 2010 there was a reported shortfall of $46.7 million, impacting about 3,500 client accounts, according to the article.
The charges relate to Johnson using client funds for personal use and to protect the company from margin calls by its financier. He also told auditors that a $5.2 million equity injection came from a 'network of family and friends' rather than from client accounts.
A contract for difference (CFD) is essentially a bet on the movement of stock prices. Sonray specialised in CFDs, offering clients exposure to price movements rather than direct ownership of underlying shares.
Saxo acted as Sonray’s financier. The article says Johnson used client funds in part to guard against margin calls from Saxo, which contributed to the alleged misuse of client money.
The article notes maximum penalties of up to 10 years' jail for state offences such as false accounting, theft and deception, and up to five years for submitting a false document to ASIC. Johnson was granted bail and is due back in the Victorian Supreme Court on November 11 for his sentence hearing.
Scott Murray, who is Johnson’s brother-in-law and was Sonray’s chief executive, pleaded guilty in 2011 to fraud and theft offences. He is serving a five-year jail term according to the article.
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