In the Supreme Court in Launceston yesterday the 70-yearold told Justice David Porter he was guilty of one count of insider trading. Gay could learn his fate next week in what is the state's first case of insider trading in living memory.

He faces a maximum of five years' jail, a $220,000 fine, or both.

Gay first pleaded not guilty in February 2012 and maintained that plea as recently as Friday. 

His shock about-face aborted the complex five-week trial due to begin yesterday.

Through barrister Neil Clelland, SC, Gay pleaded guilty on the basis he ought to have known (rather than did know) that an unreleased management report he possessed contained price-sensitive information. 

Before Gay pleaded, the charge was amended to read that Gay sold more than 3.4 million Gunns' shares in December 2009 shortly before they dipped in price.The sale was worth about $3 million. 

The share price fell 20 cents in February 2010 when Gunns released a half-yearly market update that showed a 98 per cent drop in profits.

The price-sensitive information Gay relied on came from an October 2009 profit and loss report, which was not released to the market.

 In a preliminary proceeding last year the court heard Gay had hung on to 12 million Gunns' shares. According to an ANZ Bank employee, Gay said he was selling some of his shares to pay off debt after being diagnosed with cancer. 

Gay left the court on bail surrounded by lawyers and a media pack but offered no comment. 

Justice Porter adjourned the matter for sentencing submissions on August 14.