Insider trader loses more than money on print

Convicted insider trader, Andrew Dalzell, has learned that print is a tough industry in which to make money, even when you have an inside advantage.

The former senior manager at KPMG, Dalzell (49) pleaded guilty in November to one charge of insider trading in 40,000 shares in printing company, Promentum in 2006. Corporate regulator, ASIC closed in after KPMG dobbed in its own man.

NSW Supreme Court judge Peter Hall sentenced Dalzell to two-years imprisonment under a newly created intensive correction order, in which Dalzell is required to carry out a minimum of 32 hours of community service a month from 20 May 2011 to 19 May 2013.

It all began to go pear shaped for Dalzell when he paid $52,369 for Promentum shares after learning the company was targeting McMillan Printing in order to almost double its size. He bought the shares under his own name, but when the offence was detected he voluntarily sold the shares at a loss of around $3,000. He had initially tried to purchase 100,000 shares, but Citigroup did not margin lend against Promentum shares.

At the time of the purchase, Dalzell was part of the KPMG team advising Promentum on a proposal to acquire printing company, McMillan Group. KPMG forecast the potential acquisition would double Promentum’s size and increase investor perception and confidence.

As part of his defence Dalzell claimed that, apart from the inside info, he believed the printing industry was a good stock bet. “I thought that companies in the printing industry had the potential for short and medium term share price growth.”

[Ah, those were the days; Ed]

Promentum was delisted in 2007 after being acquired by Pacific Print Group, which now trades as Geon. Blue Star bought McMillan Printing in the same year