Mr Russell Andrew Johnson, the sole director of Sonray Capital Markets Pty Ltd (Sonray), yesterday pleaded guilty in the Supreme Court of Victoria to seven criminal charges brought by ASIC.
Mr Johnson faces a maximum of ten 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.
Mr 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; and
- one charge of obtaining a financial advantage by deception
The 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.
Additionally, Mr Johnson, in a solvency report required by ASIC, made a false statement about equity injections of $5.2m into Sonray.
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.”
Mr Johnson was granted bail and will appear at the Supreme Court on 11 November, 2013 for a sentence hearing, on conditions that he;
- inform the court of any change to his residential address;
- surrender his passport and not attend any international port of departure; and
- not contact any prosecution witness
The Commonwealth Director of Public Prosecutions is prosecuting the matter.