Australia: “Bullied and Harassed” CFO Turns to Insider Trading

In Australia, Mukesh Panchal, the former CFO of Queensland Gas Company, pleaded guilty to four criminal charges of inside trading. The Brisbane Times reports that Panchal bought 418,148 shares in QGC at a price of $1.3 million while knowing that an important alliance with British Gas to produce and market liquefied natural gas was about to be made public. Panchal used the proceeds of the sale of his family home to purchase shares on four separate occasions between January 15, 2008 and February 1, 2008.

The Brisbane Times reports that during his sentencing, Panchal explained he was “not thinking clearly” when he bought the shares because he was stressed due to “bullying and harassment from my managing director…. He was undermining my authority as CFO, yelling … making derogatory comments in front of the auditors.”  Panchal said after he complained about the bullying, he was demoted to the position of interim company secretary and became worried he would lose his job. He said he committed the insider trading “out of need.” Panchal faces up to five years’ in jail under the Corporations Act.