The sole director of Sonray Capital Markets, Russell Andrew Johnson, has pleaded guilty to seven criminal charges brought by ASIC.
Johnson, 41, of Toorak, Victoria, has pleaded guilty to:
three charges of false accounting
one charge of submitting a false document to ASIC
two charges of theft to the value of $742,641
one charge of obtaining a financial advantage by deception
He faces a maximum of 10 years’ imprisonment 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.
However, in 2011, former Sonray CEO Scott Murray pleaded guilty to 10 charges brought by ASIC, and was sentenced to five years jail. Murray will serve a minimum of 2 years and 6 months before he is eligible for parole, taking into account his early guilty plea and the cooperation given in the matter. Murray’s charges were:
Six charges of false accounting involving fictitious deposits totalling $36,439,588 and USD $9,779,395.25 and false withdrawals totalling $7,800,923
Two charges of theft totalling $2,256,500
One charge of obtaining a financial advantage by deception
One charge of misleading an auditor concerning a capital injection of $5,200,000
Johnson’s charges relate to the use of various Sonray client's trading accounts to create numerous unfunded deposits for which no physical cash was involved. This was done to either obtain funds for use by himself or Sonray, or to hedge the trading book against margin calls. The effect of withdrawing funds from client accounts from unfunded deposit entries caused an actual deficiency in the segregated client account funds.
He also made a false statement about equity injections of $5.2m into Sonray, in a solvency report required by ASIC.
ASIC Commissioner Greg Tanzer said: “ASIC expects directors to act honestly and with integrity, and always in the interests of the company. We take very seriously conduct to the contrary, and the charges that Mr. Johnson has pleaded guilty to today reflect that.
“The integrity of the market is one of ASIC's key priorities, and investors have a fundamental right to expect that their money will be handled honestly and appropriately. Where this does not occur, ASIC will not hesitate to take action to protect the interests of the clients.”
When asked whether Johnson was likely to receive a full sentence, ASIC said that it is a matter for the courts.
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