AACo turns to lawyers after insider trading claims against billionaire investor
Australian Agriculture was seeking legal advice over what moves it needs and can take following the allegations of insider trading of its biggest shareholder, British billionaire Joe Lewis.
British billionaire and Tottenham Hotspur football team owner Joe Lewis (2-R) walks with his legal team after surrendering to authorities to face an indictment on insider trading charges at United States federal court in New York. Federal prosecutors are accusing Lewis of providing confidential stock information to friends and associates. EPA/JUSTIN LANE
AACo and its Queensland operations were named in explanatory documents filed by US Attorney for the Southern District of New York against Lewis.
The billionaire was alleged to have tipped off his pilots about the impact of the Queensland floods on the company.
The US Attorney’s Office announced on Wednesday that Lewis and his two private pilots had been arrested and would be presented later in the day.
It said Patrick O’Connor and Bryan Waugh were two pilots employed by Lewis to fly his private aircraft.
“Lewis tipped both O’Connor and Waugh and encouraged them to trade based on material, non-public information,” the US Attorney claimed.
Lewis is alleged to have advised his two personal jet pilots, Waugh and O’Connor, to sell shares in AACo that they had previously bought “as soon as possible”.
But the information came too late and the pilots were unable to do so before AACo made a public statement which caused a steep drop in its price.
When one of the pilot’s stockbrokers told him that the sale had not gone through in time to avoid a loss, the airman wrote back: “Just wish the boss would have given us a little earlier heads up.”
“In one instance, Lewis gave O’Connor and Waugh loans, each worth $US500,000, so they could buy a company’s stock before the public release of favorable clinical results.
“In connection with that loan, O’Connor texted a friend to buy the stock, told the friend the “Boss is helping us out and told us to get ASAP,” and assured the friend that “All conversations on app is encrypted so all good. No one can ever see.”
“O’Connor also texted the friend that “Boss mentioned around 6 to 8 weeks for [Mirati] to take profit” and that he thought “the Boss has inside info” and “knows the outcome” of not-yet-public clinical testing.
O’Connor and Waugh later sold the stock they had purchased on the basis of these tips for a profit, as did Lewis’s assistant and friends.
The allegations came as AACo was preparing to front shareholders at an annual general meeting today.
It said the board had been made aware of the action by the Manhattan Attorney General.
“The board has sought legal advice on the matters relating to AACo,” the company said.
“As the proceedings are against Mr Lewis, AACo has no further information and is not able to comment further.”
Lewis owns just over 50 per cent of AACo which operates beef producing assets in Australia.
