While most of us were focused on the federal election, an important date came and went in the life of former Gunns chairman John Gay, who earlier this year pleaded guilty to insider trading. The appeal period for his sentence, by Tasmanian Supreme Court Justice David Porter, came and went without the Australian Securities and Investments Commission and the Director of Public Prosecutions seeking to appeal.
Gay made over $3 million from the sale of shares in failing Tasmanian timber giant Gunns in late 2009, before releasing a report that sent the company’s share price plummeting 20%. In August, Justice Porter fined Gay just $50,000, or a fraction of what Gay made compared to what he would have made if he’d sold after the report. Porter appears to have accepted Gay’s arguments that he shouldn’t go to prison because he was in poor health, and that he had sold the shares because of this health problem.
The Crown had 14 days to appeal the sentence. One would have assumed ASIC would have appealed such a light penalty, given it had originally sought a prison sentence. But as it turns out, ASIC didn’t bother to appeal. The Tasmanian Supreme Court yesterday confirmed to Crikey no appeal had been lodged within the statutory timeframe.
While ASIC was waving through a minimal fine for insider trading, it was ramping up its pursuit of Jonathan Moylan, the man behind the Whitehaven Coal hoax in early January. Earlier this week, Moylan’s prosecution for “false and misleading statements” was moved to the NSW Supreme Court at the request of prosecutors. Moylan faces up to 10 years in prison.
What’s become clear as ASIC’s pursuit of Moylan has dragged on its that the 9% intra-day blip Moylan’s prank caused on January 7 is as nothing compared to what the company’s management and board have managed since. While the ASX 200 has surged to multi-year highs, the company’s share price has collapsed as Whitehaven reported significant losses and Nathan Tinkler bailed out.
Indeed, the $3.21 nadir to which Moylan’s fake press release sent the Whitehaven share price, which allegedly costs “mum and dad investors” millions of dollars, is 60% above the current share price.
ASIC’s abject acceptance of Gay’s sentence adds to its long history of being too incompetent or too scared to pursue business crooks. But when it comes to the internet, ASIC knows no fear — blocking thousands of websites without a thought as to who might end up collateral damage, and vigorously prosecuting activists who’ve shown up the weakness of some parts of the business media.
The lesson seems to be, if you’re going to breach corporate law, do so offline, where ASIC lacks the wherewithal or interest to aggressively pursue you.
ASIC did not respond to a request for comment on Gay’s sentence before deadline.
Ah yes ASIC. The “brave Sir Robin” of watchdogs.
Can’t say I’m surprised at this tale of ineptitude, just disappointed as usual.
Will the media be looked at along with Moylan – considering their lazy roll in what happened re Whitehaven – rushing to report without investigation or verification, of what was a pretty basic send-up, if they’d taken any more than a sensationalist scooper’s interest?
And how much has the interpretations of the utterances of Glenn Stevens cost our markets? He’ll be next?
Bernard, if ASIC and the CDPP did appeal the Gay sentence, I’m sure there would be criticism about wasting tax payer money on such an action. ASIC is damned if it does and damned if it doesn’t.
Furthermore, the conduct Moylan was charged with is making a false and misleading statement (therefore not directly related to impact on share price) as opposed to Gay who was charged with insider trading. So I’m not sure how you can judge ASIC’s actions by comparison of the two cases and respective share price impacts.
Oh and another thing:
If you look past the fact that they are different offences and just at the fact of prosecution, I don’t see any inconsistency.
One was prosecuted and found guilty and a decision was made that a message had been sent and it wasn’t worth further resources in appealing. The other is in the process of being prosecuted and regardless of whether Moylan is found guilty or not, ASIC will likely have to make the same call on whether they would appeal the first instance decision.
Dubdubdub – so it’s OK to make $3mill illegally, and pay a $50K fine ? I’m sure all those crims who have had their ill gotten gains confiscated via proceeds of crime would be more than happy with a similar outcome. As usual, white collar crime is seen as a lesser crime.