Brighton doctor Mervyn Jacobson found guilty of manipulating the stock market

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4 Dec 2018

Price fixing: Mervyn Jacobson at the Melbourne Magistrates Court in 2008. Photo: Jason South

Price fixing: Mervyn Jacobson at the Melbourne Magistrates Court in 2008. Photo: Jason South

Price fixing: Mervyn Jacobson at the Melbourne Magistrates Court in 2008. Photo: Jason South

A doctor who claimed to have a $100 million fortune has been found guilty of manipulating the stock market for financial gain.

Mervyn Jacobson, 72, of Brighton, had denied claims he was a “fraudster” and pleaded not guilty to 35 charges of conspiracy to manipulate the market and fund transactions to create an artificial share price between May and November 2006.

But a Supreme Court jury found him guilty of all charges on Wednesday, after an eight-week trial. Jacobson put his hands over his eyes and to his brow when the first guilty verdict was announced, and he later covered his face with his hands as he sat in the dock.

Crown prosecutor Jeremy Rapke, QC, described the case during the trial as one of price-fixing.

Jacobson had been involved in research and other activities involving human genetic material before Genetic Technologies invented a method to obtain valuable information located within what is called the non-coding DNA of all species.

Shares in Genetic Technologies were listed on the Australian Stock Exchange (ASX) and Jacobson controlled more than 40 per cent of the company’s shares, totalling more than 150 million shares.

The Crown case alleged Jacobson’s daughter, Tamara, and her second husband, Geoffrey Newing, from Toorak, acted illegally and were heavily involved with Jacobson in manipulating the price of Genetic Technologies shares on the ASX.

Mr Rapke said much of Jacobson’s wealth was tied up in the company and his financial stability was dependent on the company’s success and its share price.

So when the share price began to fall and the doctor started receiving margin calls on a $11.4 million loan with Opes Prime, Mr Rapke said Jacobson gave more than $1.55 million to his daughter.

The prosecutor said Tamara, her husband and two stock brokers then used the money to buy Genetic Technologies shares on the ASX to maintain the price at an artificially high level.

Jacobson admitted giving Tamara large sums of money but claimed the cash was a gift.

He told the jury Tamara had been a day trader buying and selling shares in his company when he became aware she was being investigated by authorities.

“It was all crazy, with hindsight,” the doctor said.

When it was put to Jacobson that he had known his daughter had been manipulating his company’s share price during 2006 because it was at his request, he replied:

“That is false … what you are saying is very offensive and false.”

“She’d been doing a lot of things that make no sense to me, but I was not involved and I was not consulted and I was not aware of it.”

Mr Rapke told the jury if the evidence pointed to Jacobson being a fraudster, then “no amount of charitable work, no amount of involvement in the arts, can erase or alter the effect of that evidence”.

But defence barrister Joshua Wilson, QC, claimed his client was a person of good character who had no need to set up a scheme to prop up the share price of his company.

He said the conspiracy theory involving Jacobson could have come straight from a Hollywood movie.

“His personal wealth was in the vicinity of $100 million … is there a burning need for a man of such substance to engage in the criminality that our friends (the Crown) contend, given that he had assets all over the world?” Mr Wilson said.

Justice Stephen Kaye extended Jacobson’s bail so psychological and medical tests could be arranged within the next fortnight, before a pre-sentence hearing on November 19.

He is required to report to police twice a week while on bail and has had his passport seized.

Justice Kaye thanked the jurors for the close scrutiny they had applied to the evidence over such a long and complex trial.

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