Eroad accused thought for himself, defence in insider trading case claims

The defence in New Zealand's first insider trading trial says his client worked out for himself that Eroad's US sales would tank, a jury in the High Court at Auckland has heard.

Former Eroad executive Hamish Sansom is on trial for insider trading under the Financial Markets Conduct Act.

The Crown alleges he received secret information from a then-employee Jeffrey Honey, after which he offloaded 15,000 shares for more than $50,000 in September 2015. 

Four days after Mr Sansom sold down his shareholdings, Eroad released a profit warning to the market, which led to a 21.7% decline in its share price, the company's biggest one-day drop since its listing. 

Mr Sansom's lawyer, David Jones, QC, told the jury the case was about "numbers versus words, reality versus rhetoric."

He says Mr Sansom had already worked out from publicly available material that the US sales could not be anything close to what was estimated.

"It's not rocket science," he told the court. 

The defence says Mr Sansom had already taken steps to sell his shares, such as releasing funds from escrow, and had planned to sell down before he received the texts he had not expected to receive from Mr Honey.  

The Crown's first witness, former Eroad corporate affairs manager Tony McNaught gave evidence about the Oregon market that road tracking device company had been trying to crack. 

"It was viewed as important because it represented a beachhead for the whole of the US."

(Source: Yahoo Finance)

Mr McNaught explained how Chapman Tripp came in and explained to staff what it meant to be working for a listed company including the issue of share trading. However, Mr McNaught did not attend and was requested by email to view the informational video later on.

Earlier today, Crown prosecutor Nick Williams explained that the case was likely to come down to whether the information Mr Sansom had received was material and whether it was publicly available. The Crown alleges he was an "information insider" who had information that was material and was not available.

The Crown said Mr Sansom had told Mr Honey who sent him text messages about the company's performance: "You're a bad boy, but thanks."

Mr Sansom later texted his former colleague Jeffrey Peter Honey that he "was going to sell down significantly anyway."

The trial before Justice Anne Hinton is expected to run into next week.