Today, the Australian Securities and Investments Commission (ASIC) has announced that the former sole director of Sonray Capital Markets Pty Ltd (Sonray), Mr Russell Andrew Johnson, has been sentenced to six-and-a-half years in jail.

Sonray was established in 2003 and held an Australian financial services licence. It was one of the first brokers in Australia that provided advice on Contracts For Difference (CFDs). By mid 2010, Sonray was one of Australia’s largest introducing brokers (IBs) employing about seventy people at offices in Melbourne and the Gold Coast. The broker had a white label agreement with Saxo Bank and was reported to be seeking a buyout by Saxo following financial difficulties but that did not materialize into a deal.

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Today’s sentence, handed down in the Victorian Supreme Court, comes as a result of ASIC’s investigation into the company, which collapsed in June 2010 owing more than $46 million. Subsequently, Mr Johnson was charged with multiple offences, including false accounting, theft and deception and conspiracy to steal. Mr Johnson will serve a minimum of three-and-a-half years before he is eligible for parole.

The presiding judge in the case, Justice Macaulay said that the conduct engaged in was a serious example of the crimes charged, and that they had been committed with ‘a sophisticated degree of orchestration and planning’.

ASIC Chairman Greg Medcraft commented: “The collapse of Sonray, which held millions of dollars in funds for several thousand clients, was in part due to the complete disregard of the law by senior members of the company. Today’s sentence reinforces ASIC’s commitment to ensuring that company officers act at all times in the interests of a company. Where they fail to do so, the consequences will be significant.”

Mr Johnson is the second person to be jailed following the collapse of Sonray. In October 2011, former CEO, Mr Scott Kenneth Murray, was sentenced to five years jail with a non-parole period of two years and six months for 10 charges brought by ASIC.

In 2011, there were reports in Australia of a settlement between the liquidator of Sonray and Saxo Bank, which owned shares worth $20 million in the failed IB, plus a contribution of $18.5 million to the compensation pool by Saxo Bank and  insolvency practitioners Ferrier Hodgson.