Commonwealth Director of Public Prosecutions v Forrest

This case is a criminal sentencing decision of the Federal Court of Australia. It concerns the misuse of confidential takeover information about Platinum Asset Management Ltd and the use of that information to buy shares and encourage others to buy shares before the market was informed.

The commercial setting is important. Rodney John Forrest was not described as an insider in the narrow sense of being a director or employee of Platinum. Instead, the judgment says he had entered into an arrangement to provide investment management services through an entity called Sublime to the McKeage Cole Family Office. In that role, he signed a confidentiality agreement and used a private office maintained by Michael Cole. Mr Cole was also chairman of Regal Partners Limited, the ASX-listed company said to be preparing a proposal to acquire Platinum.

On 23 August 2024, Mr Forrest attended Mr Cole's office for the purpose of providing investment management services. The Court records that while Mr Cole was out of the room for just under 50 minutes, Mr Forrest accessed Mr Cole's computer and email account without permission. That gave him access to an email attachment described as a Pitch Deck.

The Pitch Deck contained what the agreed facts defined as inside information. It said Regal was preparing a proposal to acquire all ordinary shares in Platinum via a scheme of arrangement. It included a proposed offer price of $1.20 per Platinum share, or $1.30 per share for Australian-domiciled shareholders who could receive the benefit of 100 per cent of franking credits, and it said the transaction was anticipated to be signed and announced by the end of September 2024 if due diligence materials were provided in time. Mr Forrest used his mobile phone to photograph the Pitch Deck.

The Court described the obtaining and later use of that information as a profound breach of trust. That matters because it shows the Court did not treat the conduct as a mere technical breach of market rules. The information was confidential, commercially valuable and obtained through a trusted service relationship. The Court's language makes clear that the misuse of that information was central to the seriousness of the offending.

After obtaining the Pitch Deck, Mr Forrest began buying Platinum shares in his own name. The judgment says he acquired 2,750,532 shares in eight tranches between 29 August and 10 September 2024, at a total investment cost including brokerage of $2,693,383.41. The Court also records that he encouraged three others, two individuals and one company, to acquire Platinum shares between 29 August and 16 September 2024.

The procedural history is straightforward but important. Mr Forrest was charged in the Local Court of New South Wales on 5 August 2025 with two rolled up insider trading offences and one financial services licence offence. On 12 August 2025, at the first mention of the charges, he pleaded guilty to both insider trading offences and was committed for sentence in the Federal Court.

When he first appeared in the Federal Court on 5 September 2025, he was arraigned on an indictment confined to the insider trading offences and maintained those guilty pleas. His sentence hearing took place on 15 December 2025, which the judgment says was the first date available for all concerned. At that hearing he again adhered to the guilty pleas.

The separate offence of carrying on a financial services business without the necessary licence was handled differently. The judgment says Mr Forrest asked that offence to be taken into account on a schedule under section 16BA of the Crimes Act 1914 (Cth) in relation to the second insider trading offence. That means the Court took the conduct into account for sentencing, but it was not the subject of a separate conviction on the indictment before the Court.

That distinction matters for business readers. A schedule offence can still affect sentence even if it is not separately prosecuted to conviction in the same way as the principal counts. So if a business has both market misconduct issues and licensing issues, they may interact in a sentencing context.

The evidence on sentence was entirely documentary. The judgment says there was a short written statement from Mr Forrest, a final agreed statement of facts, his criminal history, a sentencing assessment report, references and personal letters, a psychologist's report, a certificate of appreciation for community service, and a bundle of newspaper reports tendered on the issue of publicity and humiliation. There was no sworn or affirmed evidence, oral or written, from anyone. In particular, Mr Forrest did not give evidence.

Because of the guilty pleas, the Court was not deciding whether the conduct occurred. It was sentencing on the agreed facts and considering the proper penalty in light of the seriousness of the offending, the offender's circumstances and the applicable sentencing principles.

The judgment gives a detailed account of the conduct that made up the two insider trading offences. The first offence was Mr Forrest's own trading. The Court records eight separate purchases of Platinum shares in his own name between 29 August and 10 September 2024. Those purchases were made in tranches on 29 August, 30 August, 2 September, 3 September, 4 September, 5 September, 6 September and 10 September 2024.

The total number of shares acquired was 2,750,532. The total investment cost including brokerage was $2,693,383.41. The judgment also reproduces a table showing the number of shares purchased on each date and the average price paid. That level of detail shows the Court was dealing with a sustained course of trading over multiple days, not a single impulsive transaction.

The second offence was procuring others to buy Platinum shares. The Court says Mr Forrest encouraged a number of other persons by telephone calls, texts or WhatsApp messages to acquire shares in Platinum. Those efforts were successful with two individuals, Mr Silvio Mizzi and Mr Brendan Leary, and one company, Jatam Investments Pty Ltd.

According to the judgment, Mr Mizzi acquired 400,000 shares in multiple tranches between 29 August and 10 September 2024, investing $325,042.35 including brokerage. A company owned and directed by Mr Leary and his wife acquired 66,246 shares on 13 September 2024, investing $64,494.22 including brokerage. Jatam acquired 464,539 shares in the last 10 minutes of trading on 16 September 2024, investing $457,697.10 including brokerage.

The judgment also records numerous communications with Australian Financial Review journalist Kanika Sood between 28 August and 12 September 2024 in relation to Platinum. The Court said Mr Forrest anticipated that Ms Sood would publish an article about Platinum. By the time he procured Mr Leary and Jatam to acquire shares, the Court says he was aware of additional inside information in the form of the anticipated publication of that article.

The article was published at 4.33 pm on 16 September 2024, after the market had closed. It stated that Regal was considering making a bid to acquire Platinum and that sources said the proposal was in an advanced state and would be in the form of Regal shares. The Court readily inferred that at least one of those sources must have been Mr Forrest, given the agreed facts about his communications with the journalist.

The next morning, before the market opened, Platinum released an ASX announcement titled Non-binding indicative proposal from Regal Partners Limited. Platinum confirmed it had received an indicative and non-binding proposal from Regal to acquire all shares in Platinum via a scheme of arrangement, subject to due diligence.

The market reaction was immediate. The judgment says Platinum's share price had fallen from $1.03 on 29 August 2024 to $0.93 by 9 September 2024. On 17 September 2024, after the article and ASX announcement, the shares opened at $1.14, reached an intra-day high of $1.15 and closed at $1.115, which was a 12.5 per cent increase from the previous day's close. Trading volume increased by about 590 per cent from the previous day.

The Court then recorded what happened when the shares were sold. Between 18 September and 22 October 2024, Mr Forrest and the other purchasers sold some or all of their holdings. Mr Forrest's realised profit on shares acquired between 29 August and 10 September 2024 and sold between 18 and 20 September 2024 was $309,571.84. Mr Leary's company realised a profit of $14,541. Jatam realised a profit of $45,846.56. Mr Mizzi sold only 25,000 shares for a realised profit of $4,267.55 and retained 375,000 shares that, as at 30 July 2025, reflected an unrealised capital loss.

That last point is useful for business readers. The Court's discussion shows that criminality in insider trading is not measured only by the eventual profit outcome. Market movements after the trade can be affected by chance and later events. The wrongdoing lies in trading or procuring trading while in possession of inside information, not merely in whether the trade turns out well.

The main issue before the Court was sentence, not guilt. Mr Forrest had already pleaded guilty. The Court therefore had to determine the appropriate sentence for the two rolled up insider trading offences and how to take into account the separate financial services licence offence on the schedule.

The judgment says it was common ground that the offending warranted imprisonment. The dispute was narrower but still significant. The prosecutor submitted that an actual period of incarceration was required. Mr Forrest argued that the sentence should either be wholly suspended or served by way of an intensive corrections order.

To resolve that issue, the Court considered the nature and purpose of insider trading laws, the seriousness of the conduct, the breach of confidentiality and trust involved, the difficulty of detecting insider trading, and the role of general deterrence. The Court said the insider trading prohibition exists to maintain the integrity of the market by creating and maintaining a level information playing field.

The reasons explain that a market economy depends on trading and competition, but that cheating in relation to price-sensitive information is anathema to the proper functioning of financial markets. Those who possess information that is not generally available are forbidden to trade directly or indirectly unless and until it becomes generally available. The Court said failure to maintain that state of affairs risks unquantifiable loss to individual traders and broader harm to the community by damaging market integrity.

The Court also emphasised that insider trading is difficult to detect. Because the chance of detection may be perceived as low, the Court said general deterrence is a paramount sentencing consideration. The reasons draw on earlier authority describing insider trading as a form of cheating and, put bluntly, a form of fraud, even if its consequences may be more opaque than general fraud.

The judgment also refers to authority saying that people of otherwise good character and compelling personal circumstances may still be tempted to engage in insider trading, which emphasises the need for a clear deterrent that insider traders should expect to go to gaol. That is a strong statement for business readers. It means courts are likely to place substantial weight on deterrence even where an offender has no relevant prior convictions and otherwise presents well.

The Court confirmed the convictions on the two charges and imposed a total effective sentence of six years' imprisonment. The formal orders show that on count 1 Mr Forrest was sentenced to five years' imprisonment, commencing on 23 January 2026 and concluding on 22 January 2031. On count 2 he was sentenced to two years' imprisonment, commencing on 23 January 2030 and concluding on 22 January 2032. Because the second sentence was partly cumulative, the total effective sentence was six years.

The Court ordered that Mr Forrest be eligible for parole on 22 January 2029, after serving three years' imprisonment. That means the Court rejected the submission that the sentence should be wholly suspended or served by way of an intensive corrections order without actual incarceration.

The Court also ordered that Mr Forrest pay $309,571.84 to the Commonwealth under the Proceeds of Crime Act 2002 (Cth). The judgment notes that the parties agreed to that order and that the amount reflected the benefit derived from the offending the subject of count 1. For businesses, that is a reminder that criminal sentencing can sit alongside confiscation or recovery of benefits obtained from the conduct.

Although the available judgment text ends before the reasons fully conclude, the published material clearly shows the Court's approach. Insider trading was treated as serious offending involving a profound breach of trust, misuse of confidential information, and harm to market integrity. The Court's reasoning strongly supports actual imprisonment as the proper outcome.

Most businesses will never be involved in a public company takeover. But the governance lessons from this case are much broader. The first lesson is about access. If a person can physically enter an office, use a device, view emails or see transaction documents, your business needs to assume there is a real risk of misuse unless access is controlled and monitored.

The second lesson is about relationships. The risk here arose through a service arrangement and a trusted commercial setting. That means businesses should think beyond employees. Consultants, advisers, contractors, part-time executives, family office personnel and external investment managers may all have access to sensitive information and should be covered by confidentiality, access and dealing controls.

The third lesson is about conduct beyond direct trading. The judgment records not only personal share purchases but also procuring others to buy and communications with a journalist. In practical terms, that means a business should not frame its policies too narrowly. Risk can arise through tipping, suggesting a trade, passing on information, or trying to influence the timing or content of publicity around a confidential transaction.

The fourth lesson is about licensing boundaries. The Court took into account a separate offence of carrying on a financial services business without the necessary licence. Even though that offence was not separately convicted on the indictment, it still formed part of the sentencing picture. Businesses that provide investment management, portfolio management or similar services should make sure they understand whether an Australian financial services licence or another compliant structure is required.

The fifth lesson is about deterrence and culture. The Court's reasons show that insider trading is treated as difficult to detect and therefore in need of strong deterrence. A business cannot rely on good character, seniority or commercial sophistication to soften the risk. In fact, those features may simply show that the person knew exactly what they were doing. Good governance therefore needs to be practical, not symbolic.

In practice, that means restricting access to sensitive documents, using screen locks and password controls, keeping records of who has access to market-sensitive information, training staff and advisers on confidentiality and personal dealing rules, and having a clear escalation path if information is accessed or disclosed without authority. If your business handles listed company information, takeover information or other market-sensitive material, these controls should be active and enforced.

The offending period for the insider trading charges was almost three weeks between 29 August 2024 and 16 September 2024. The separate financial services licence conduct ran over about nine months between 4 January 2024 and 8 October 2024. The key access event involving the Pitch Deck occurred on 23 August 2024. The Australian Financial Review article was published after market close on 16 September 2024, and Platinum's ASX announcement was released before market open on 17 September 2024.

Mr Forrest was charged on 5 August 2025, pleaded guilty in the Local Court on 12 August 2025, appeared in the Federal Court on 5 September 2025, and was sentenced on 23 January 2026 after a sentence hearing on 15 December 2025. The Court ordered imprisonment from 23 January 2026 and parole eligibility on 22 January 2029.

The published judgment text used for this page includes the orders, catchwords and substantial parts of the reasons, but it ends before the reasons fully conclude. The available material is still sufficient to explain the commercial story, the sentencing issue, the orders made and the main principles the Court applied.

Readers should treat this page as a practical case note focused on the parts of the judgment that are clearly available. It does not attempt to go beyond what the published text supports.