Ann: Completion of Placement, page-72

*Finder can argue that he sold shares on the market to help him to be able to get enough funds to exercise his options on 21/10/16.
*Mathwin sold shares on 12/10/16 to get a little funds to be able to exercise the 500K options as on the notice on the 21/10/16
*Costello sold $90,000 of shares to be able to exercise her options for $70,000.
*Caroline sold 300K after exercising her 500K options which is the only suspicious activity I can see as it looked like she was trying to get all her money back from exercising the options.

Directors had their reasons to sell their shares. At the end of the day, each director needs board approval especially CEO, so if there is a problem regarding shares sold to exercise options, it's the CEO's fault. The directors could also argue they sold their shares to be able to put more funds back in the company.

That's why there is always an agency problem in companies because the management mightn't always care in the best interests in shareholders. Don't forget the directors also hold shares and that they will feel the SP plummeting the same way.

The decision to use directors in the placement is to show confidence but as you all have said that it doesn't show confidence to sell shares to participate in a placement. While it may be unethical, it is legal and it's the classic agency relationship where the agent is the CEO of a company and the principal is the shareholders of a company. Since the CEO has acted in the scope of his employment, he/she is not liable.

While it isn't the perfect reality, you really need to understand that poor management exists in many companies and you cannot do anything except get new management.

And don't say it is insider trading because they sold shares and did all this more than a month ago and this capital raising could have been a recent development.