Russell Johnson, a co-founder of collapsed brokerage company Sonray Capital Markets appeared in a Melbourne court on 24 charges including theft, conspiracy and dishonesty over his role in the downfall of Sonray. The charges were filed by ASIC; the Australian Securities and Investments Commission. Sonray, founded in 2003 dealt in shares, options, futures and CFDs, collapsed in June last year owing A$47 million to about 4,500 clients.
Johnson, of Toorak Victoria, in particular stands accused of siphoning off money from the brokerage company for two years, stealing or somewhat dishonestly appropriating a total in excess of $6.5 million, a court has been told.
This included two charges to commit theft to the order of $5.78 million, two charges of conspiring with Sonray’s co-founder Scott Murray to engage in false accounting, one charge of conspiracy to obtain financial advantage by deception, 17 charges of theft to the value of $742,641, and two charges of submitting a false document to ASIC.
The Australian Securities and Investments Commission is alleging that Johnson conspired with fellow Sonray executive Scott Murray to steal around $3.8 million from the broker’s bank accounts between April 2008 and February 2009 and an additional $1.99 million in May 2009. He also stands accused of dishonestly appropriating an additional $730,000 in a series of transactions made between December 2007 and March 2010 – less than three months before the broker collapsed. ASIC also alleges Johnson made false statements in financial reports provided to ASIC and falsified client accounts on the broker’s internal trading database. He is also charged with obtaining a financial advantage by deception from Saxo Bank through falsifying trade records, permitting him to earn commissions from Saxo Bank which provided Sonray with its trading platform.
Russell who has sold his Toorak property and now resides with friends, if convicted, faces a maximum of ten years’ imprisonment on at least 22 of the 24 charges. During Monday’s hearing, Mr Johnson spoke only to indicate he understood the charges filed against him. Meanwhile he was granted bail on conditions that he gives up his passport, stays at a Melbourne address and not attempt to leave the country.
The proceedings against Johnson follow the arrest of Sonray chief executive, Scott Murray in February 2011. Murray, who happens to be Johnson’s brother-in-law, pleaded guilty to 10 criminal charges involving fake deposits, making false withdrawals and theft.
Sonray, which was established in 2003, was one of the first brokers to provide advice on CFDs. In June last year, John Lindholm and George Georges of Ferrier Hodgson – a turnaround, reconstruction and forensics company – were appointed voluntary administrators, and in October 2010 Sonray was placed into liquidation.
Among those caught in the collapse included a development clan, the Deague family, who are claiming to have lost in excess of $9 million, and the former Patrick chairman Chris Corrigan, who is also suing in a bid to recover back $6.9 million. According to the liquidators, as at June 2010 Sonray had gross client positions of $76.85m, gross client holdings in either cash/equities held by counterparties of $30.15m, a shortfall of $46.7m, approximately 3,500 clients and 54 employees in its Australian offices in Melbourne, the Gold Coast and Rockhampton.