Daughter of biotech company founder gets suspended jail sentence for market manipulation

The daughter of Mervyn Jacobson, founder of Melbourne-based biotech Genetic Technologies, has been given a suspended 21-month jail sentence after admitting she bought 5.9 million shares in the company to manipulate its shares price.

Tamara Newing of Hawthorn East in Melbourne was charged with 353 counts of market manipulation after an Australian Securities and Investment Commission investigation into trade in Genetic Technologies shares between April 2005 and November 2006.

During that period Newing purchased 5.9 million GT shares through share trading accounts held in her name and in the names of companies related to her father and her husband, Geoffrey Newing.

ASIC says the trading was likely to have “created or maintained an artificial price for trading in GTG shares”.

Handing down Newing’s suspended sentence County Court Judge Barbara Cotterell said Newing would have received a two-year jail sentence had she not pleaded guilty.

Mervyn Jacobsen, who was co-founder, chief executive and major shareholder of Genetic Technologies, has been committed to stand trial on 319 counts of market manipulation with his trial to start in August.

Two former stockbrokers involved in the manipulation of Genetic Technologies shares have already been given suspended jail sentences.

Rocco Musumeci, a former client adviser with Bell Potter in Wollongong and Richard John Wade, a former client adviser with ABN Amro in Melbourne, were banned by ASIC from providing financial services for two and five years respectively. 

News of Newing’s sentencing comes just weeks after Genetic Technologies announced it would deliver its maiden profit for the six months to December 31, 2010.

The company’s shares jumped more than 8% in a day after it announced it expected to record a $4.3 million profit for the period.