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ASIC commences proceedings against former Melbourne chief executive officer & managing director
AD09-03 ASIC commences proceedings against former Melbourne chief executive officer & managing director
Tuesday 13 January 2009
ASIC has commenced action in Melbourne’s Federal Court seeking civil penalty orders against Dr Martin Soust of Malvern, Victoria.
Dr Soust is a former Managing Director and Chief Executive Officer of listed biotechnology company, Select Vaccines Limited (Select Vaccines). He is also currently a director and shareholder of Martin Soust & Co Pty Ltd (Soust & Co).
ASIC alleges that on 31 December 2007, shortly before the close of the market for the calendar year, Dr Soust instructed a stockbroker to purchase Select Vaccines shares in his mother’s name. This purchase had the effect of increasing the price of the company’s shares from 2.0 cents to 2.5 cents (a 25% increase). ASIC maintains that it was Dr Soust’s intention to increase the price of the shares so as to secure a performance bonus from Select Vaccines for Martin Soust & Co.
ASIC is seeking declarations that the purchase of shares created:
- an artificial price for trading in Select Vaccines in breach of s1041A of the Corporations Act 2001 (the Corporations Act); and
- a false and misleading market regarding the price for trading in Select Vaccine shares in breach of s1041B of the Corporations Act.
ASIC further seeks declarations that Dr Soust breached his duties as a director, improperly used his position, and failed to act in good faith in not informing the Board and Remuneration Committee of Select Vaccines of his involvement in the purchase of the shares on 31 December 2007.
ASIC is also seeking pecuniary penalty orders from the Court and an order disqualifying Dr Soust from managing corporations.
ASIC’s investigation commenced in June 2008 following a referral from the Australian Securities Exchange (ASX).
The matter is currently scheduled for a directions hearing on 30 January 2009.
Background
ASIC alleges Select Vaccines, Martin Soust & Co and Dr Soust were parties to an agreement in which Martin Soust & Co agreed to provide consultancy services to Select Vaccines, including the provision of Dr Soust as Managing Director and CEO. ASIC also alleges the agreement provided for monetary bonuses to be paid to Martin Soust & Co upon meeting performance criteria. Payment of one of the bonuses under the agreement was linked to the share price of Select Vaccines as at 31 December 2007.
Dr Soust resigned as Chief Executive Officer and Managing Director of Select Vaccines effective 31 August 2008.
ASIC Website: Printed 02/10/2010
