Former stockbroker Norman John Graham's damaged reputation after inside trade is punihsment enough, court hears THE DAMAGED reputation of a former chief stockbroker turned farmer, who had insider knowledge when he sold shares in a fishery company, is punishment enough, a court has heard. County Court Judge Duncan Allen reassured Norman John Graham, the former managing director of stockbroking firm Lonsec, he would not be sent to jail. Neil Clelland, SC, for Graham, said the 53-year-old ruined his otherwise exemplary career for no personal financial benefit, apart from a $371 brokerage fee to his firm. Graham pleaded guilty to two counts of insider trading, admitting he sold two clients" shares in the publicly listed Clean Seas Tuna shortly before the company's share price plummeted because he had confidential information. The Barwon Heads stockbroker provided advice to Clean Sea Tuna and managed their trading account. He also had clients who owned shares in the agricultural company and held around 150,000 shares himself. On February 25, 2010, the eve of an ASX market announcement representing bad news for the company and their share price, Graham sought information from then Clean Sea Tuna CEO Clifford Ashby. Mr Ashby told him the young blue-fin tuna in the company's much-anticipated breeding program had died and the company had lost more than $10 million in the first half of the financial year. He told Graham this on the understanding it was "behind the Chinese Wall" - a corporate information barrier designed to avoid conflicts of interest - the court heard this morning. He ordered the sale of 200,000 shares in Clean Seas Tuna the next morning before the announcement, which saw the company's share price plummet from 22 cents to 9.1 cents by close of trading. Prosecutor John Dickie said 97 million shares were traded that day, compared to 1.6 million the previous day. Graham's two clients benefited by about $12,000 each, the court heard. He initially denied the knowledge to his firm, claiming he "just got a bad feeling about the result," but confessed after an internal investigation sparked by a notice from ASIC. The firm's board lost confidence in him and allowed him to resign in October 2010. He was charged with 14 counts of insider trading in May last year. The court heard the married father of three, who was earning a "sizeable income" of around $370,000 per year at Lonsec, now helped his brother on his family's NSW farm. Mr Clelland said Graham was acting on earlier instructions from both clients to sell their shares in the company and had already sold some prior to this date. He said his client had lost his career because he would be unable to obtain a financial services licence and, if convicted, would be automatically disqualified from managing a corporation for five years. "There is little more this court needs to do to ensure he is adequately punished," Mr Clelland said. Mr Dickie said insider trading was a serious offence because it diminished the public's confidence in the stock market and was difficult to detect. Each count carries a maximum penalty of five years' imprisonment or a $220,000 fine. Judge Allen said he did not intend to impose a term of imprisonment. Mr Graham's bail was extended until his sentence next Wednesday.