A Melbourne cybercriminal has been jailed for insider trading, but the company he hacked is also in trouble with the regulator

Photo: Peter Macdiarmid/Getty Images
  • Hacker Steven Oakes has been sentenced to three years’ imprisonment after pleading guilty to 11 charges including insider trading.
  • Oakes targeted independent media company Port Phillip Publishing, gaining access to the company’s stock reports and ‘buy recommendations’ before they were published, profiting to the tune of $200,000.
  • Port Phillip Publishing is itself the subject of an ASIC investigation for giving misleading and deceptive financial advice, with the regulator taking action against its controversial CEO Kris Sayce.

IT consultant Steven Oakes has been sentenced to three years’ imprisonment in the Melbourne County Court after pleading guilty to 11 charges including insider trading.

Oakes – or ‘Steve666’ as he is known on trading chat room Hot Copper – was found to have hacked into the private computer network of independent media company Port Phillip Publishing in order to gain access to unpublished stock reports containing influential ‘buy’ recommendations.

An investigation by corporate regulator ASIC found Oakes used inside information on 70 occasions to buy shares in 52 different ASX-listed companies after gaining access to the unpublished reports.

In sentencing Oakes, Judge Fox said the man was “motivated by greed” and that insider trading is “not a victimless crime”.

He will serve a minimum of 18 months in prison, with an additional 18 month good behaviour period.

‘Not just lucky’

Speaking on the regulator’s official podcast, ASIC investigator Peter Ridgley revealed Oakes ran a “man in the middle attack” from his car outside the Port Phillip Publishing offices.

He took advantage of a “vulnerability in the wifi system” and accessed private user credentials, allowing him to access the unpublished information and make trades that earned him a profit of as much as $200,000 over a four year period before coming to ASIC’s attention.

“What has made us think he wasn’t just lucky was the pattern of his trading and the timing of his buys,” Ridgeley said. “[It] seemed like more than just a coincidence.”

ASIC officials decided to investigate and, upon visiting his home, found random computer parts “all over his living room”. Oakes’ excuse was that he is an IT professional, which didn’t wash with the increasingly suspicious watchdogs.

Despite Oakes wiping his phone and computer after receiving a compulsory notice to provide them to ASIC, investigators were able to drum up three pieces of evidence leading to 11 criminal charges including insider trading and gaining unauthorised access to data with the intention to commit a serious offence.

Victims become targets

Curiously, despite being a victim of Oakes’ cybercrime, Port Phillip Publishing and its controversial director Kris Sayce are themselves the subject of ASIC intervention.

In December 2018, ASIC took Sayce to court in a civil case alleging breaches of consumer protection laws.

ASIC alleges that Port Phillip Publishing released an article which made the “misleading and deceptive” claim that investors could make as much as $6667 a month copying the Australian Future Fund’s investment strategy in what is known as a “piggyback” tactic. The publication contained false testimonials, ASIC alleges, and the strategy it outlined will not have given investors the benefits it claimed.

Sayce is reasonably well-known in trading circles as a financial commentator and journalist, but he is also an outspoken figure on divisive cultural issues. In a blog post on his personal website – published one day after his last court appearance on 7 June – Sayce defended US President Donald Trump and the “alt right” movement.

He has also taken to Twitter to voice opinions on a wide range of topics including LGBTI rights and described Qantas executives as “scumbags” for their alleged role in the sacking of rugby star Israel Folau, who posted homophobic comments to Instagram.

Sayce is due back in the Federal Court in August to continue fighting the civil action brought by ASIC.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.