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KPMG exec sentenced for insider trading

A former KPMG senior manager caught insider trading has been ordered to undertake community service for two years.

In the NSW Supreme Court on Friday, Justice Peter Hall sentenced Andrew Dalzell to two years’ imprisonment, to be served by way of ‘an intensive correction order’.

Under the order, the 49-year-old unemployed Randwick man is required to undertake a minimum of 32 hours of community service a month.

He had pleaded guilty to one charge of insider trading, relating to his purchase of 40,000 shares in the printing company Promentum Limited in November 2006.

At the time, the KPMG senior manager was part of a team advising Promentum about a proposal to acquire another printing company, MacMillan Group.

Dalzell paid $52,369 for the shares, but two weeks later when the offence was detected, he resigned from his job and sold the shares at a loss of about $3000.

The judge said the insider trading was at the lower end of seriousness for such offences and did not involve a ‘gross abuse’ of highly confidential information.

Dalzell told the judge that a confidential report to which he had access played only a part in his decision to buy the shares.

Over the years, he had followed printing companies and the report was only a ‘stage-one pitch document’, he said.

In saying he had not recognised he was acting in a criminal way, Dalzell noted he bought the shares in his own ‘unusual’ name and used his usual broker.

But Justice Hall concluded he must have known what he did was ‘wrong and an abuse of trust’, although he may not have been mindful of the serious criminality of his acts.

He said Dalzell’s purchase had the potential to make him substantial profits.

The judge also referred to the need for general deterrence in sentencing, as insider trading had the capacity to undermine the integrity of the market and diminish public confidence.