In this edition, we discuss the sentence handed down for insider trading in Cann Group Limited (ASX: CAN) (Cann Group) shares.
In Over the Horizon, we consider the warning from the Hon Justice Simon Steward AC, of the High Court of Australia, suggesting that the deployment of corporate resources to advance political or social causes could potentially result in breaches of directors’ duties where there is a lack of a clear, credible link to long-term financial interests of the company.
Legal
Insider trading sentence underscores personal accountability for market misconduct
On 7 October 2025, ASIC reported that Mr Antonio Stella has been sentenced to 11 months’ imprisonment and ordered to pay a penalty of $225,447.24 (equal to the profit and loss avoidance resulting from his behaviour) for insider trading in Cann Group shares. The sentence stemmed from Mr Stella’s disposal of Cann Group shares shortly before the company undertook a share placement at a discount to the prevailing share price and his subsequent acquisition of shares in that same placement. Mr Stella is to be released upon entering a $1,000 recognisance to be of good behaviour for 12 months. Strengthening the investigation and prosecution of insider trading is one of ASIC’s enforcement priorities for 2025.
Over the Horizon
Bench against Board: judicial scrutiny looms over corporate social advocacy
The Hon Justice Simon Steward AC of the High Court of Australia, in a recent speech at the Melbourne Law School, warned that corporate public alignment with ‘contentious’ political and social causes could conflict with directors’ underlying legal obligations and duties. Justice Steward noted that it may only be a matter of time until the propriety of such conduct (as a matter of compliance with directors’ duties) is meaningfully tested in litigation before the Australian courts. His Honour also questioned whether corporate advocacy satisfies the business judgment rule without demonstrable, company‑specific benefits – particularly when balanced against foreseeable reputational and financial risks. Boards may see rising shareholder challenges to purpose‑driven campaigns and stronger demand for evidence linking advocacy to enterprise value. This is particularly true where boards are perceived by shareholders to use a corporate entity to promote personal political views or social values, where there is no clear link to the financial interests of the corporation.