Former Maple-Brown Abbott investment analyst Michael Ho received information from Big Un chief executive Richard Evertz about the company's revenues and pending deals before it was disclosed to the market, according to an agreed statement of facts filed to the District Court.Ho pleaded guilty last month to five counts of insider trading and one count of communicating inside information. Each charge carries a penalty of up to 10 years of imprisonment.An ex-fund manager has pleaded guilty to insider trading in relation to Big Un Ltd. TwitterHe was also told about Big Un's controversial financing deal with small business financier Finstro in January 2017, an arrangement that was revealed to have driven the company's extraordinary sales growth, and share price.Ho was told by Mr Evertz on January 10, 2017, that Finstro, via its parent First Class Capital, would fund $20 million of customer purchases in Big Un's Big Review TV, which made online videos for small businesses such as cafes, florists and beauticians.In a file note Ho said: “That’s $20m of annual sales! Big monetises the crap out of contracts.’”Ho told investigators, however, that he did not consider the information to be material at the time.Mr Evertz has not been accused of any wrongdoing in relation to the matter.In February 2018, The Australian Financial Review revealed the financing arrangement, which was later exposed to be the reason behind Big Un' s growth in revenues.Big Un shares were suspended that month and in May, Big Un's operating subsidiary Big Review TV was placed into administration.The information is contained in a detailed statement of facts which revealed how Mr Ho accumulated over 4 million cheap options in Big Un in the second half of 2016. In 2017, Big was the top-performing stock, rising from 20¢ to $3.50 and resulting in a gain of more than 150 times on the options position.Ho met and spoke to Mr Evertz several times in 2016 and Ho stated that Mr Evertz told him ahead of the market that it would grow its quarterly revenues by 30 per cent over the financial year and would make $10 million of revenue from a joint venture, instead of the $4 million disclosed to the market."When the CEO says 'aspirationally I would like to grow revenues for four consecutive quarters', he said that in July 2016 and then I look at the ASX announcement and it doesn’t say anything about the guidance, I now know that you should not actively trade in that stock because that is not the information that has been disclosed to a mum and dad investor,” Ho said in a statement presented to the court.Ho worked at Maple-Brown Abbott, one of Australia's most venerated investment firms, from 2014 until February 2018 when he resigned after breaching the company's ethics code. The Big Un trades were made in a personal capacity.Two weeks after he resigned, Ho and his lawyers approached the corporate regulator and later presented themselves for two interviews. He later pleaded guilty to the six insider trading-related charges and is due to be sentenced on June 4 at the Downing Centre District Court.The Australian Securities and Investments Commission said an "investigation concerning Big Un Limited and its officers and executives continues".
BIG Price at posting:
$2.22 Sentiment: None Disclosure: Held
