John Gay sentence transcript 

THE QUEEN v JOHN EUGENE GAY 23 AUGUST 2013

COMMENTS ON PASSING SENTENCE PORTER J

Mr John Gay, the offender, has pleaded guilty to one count of an offence generally known as "insider trading" created by ss1043A(1)(d) and 1311(1)(a) of theCorporations Act 2001 (Cth). The offence relates to the offender's course of conduct in selling shares in Gunns Ltd on 2 and 4 December 2009. The offence is made out if a person possesses inside information, the person knows or ought reasonably to know that it is inside information, and disposes of, for instance, shares. Inside information is information which is not generally available, and if it were, a reasonable person would expect it to have a material effect on the price or value of the shares. A reasonable person is taken to expect information to have a material effect on the price or value of shares if the information would, or would be likely to, influence persons who commonly acquire shares in deciding whether or not to acquire or dispose of them. The offender's plea of guilty was entered on the basis that he was a person who possessed inside information which he ought reasonably to have known satisfied the definition of inside information; in other words, he ought to have known that the information was "price sensitive". That basis of the plea is accepted by the Crown.

The essential facts of the offence are as follows. Gunns Ltd is an Australian public company listed on the Australian Stock Exchange. The company's principal activities included the management and development of forests, forestry milling and processing, merchandising and export of wood products, the management of forestry and horticultural managed investment schemes, the merchandising of hardware and building supplies, construction, and the production and sale of wine. The offender served as a director of Gunns from 1986 and was Chairman from 2001. He resigned from both positions in late May 2010. In late 2009 the offender owned about 15 million shares in Gunns.

At the time of the relevant events the Board of Directors of Gunns held a meeting each month. Customarily, the Chairman, six non-executive directors, the company secretary, and the CEO attended. Before each of these meetings the Board members received two separate information packs which were discussed at the meetings. The first pack contained the agenda, draft minutes of the previous meeting, the CEO's report and other papers. The second pack contained the management report which included the previous month's accounts detailing the company's financial performance. The management report contained sales and profit summaries. The summary included two keynote financial indicators, earnings before interest and tax, or "EBIT", and profit before tax, "PBT".

Operating EBIT excludes the profit or loss effects of items outside the normal operations or activities of the company. As such it is considered to be indicative of the maintainable profits before interest and tax that can be reasonably expected from a business. PBT measures the earnings or profit left over after interest has been paid but before tax has been paid. Each month the EBIT and other figures for the company were compared to the budget for the current period and also to the previous year's comparable earning period.  

On 13 October 2009, Gunns issued a Notice of Annual General Meeting to be held on 11 November 2009. At the same time, the company released its Annual Report.  Information about Gunns' financial performance was released at the Annual General Meeting on 11 November 2009 in the addresses of the Chairman and the Chief Executive Officer. The reports did not reveal the significant extent of Gunns' financial underperformance, nor did they provide any specific figures about the company's revenue, EBIT or PBT in the year to date. Whilst Gunns' financial underperformance was alluded to, the information in issue was not made publicly available. That is, the monthly figures provided to Board members were not specifically given to those attending the AGM, nor were they released to the market at that time. Such monthly figures were not customarily released.

A Board meeting was held on 26 November 2009, at which the October 2009 management report was tabled. The offender would have received that report in the week before the Board meeting. The figures for the financial year to October, and which amount to the inside information the subject of the charge, were as follows:

1) A revenue of $197.459 million, a variance of 31.1% below the corresponding 2008 period of 286.404 million.

2) An operating EBIT of negative $1.339 million, a variance of 103.2% below the previous corresponding period of $41.835 million.

3) A PBT of negative $8.215 million, a variance of 139.5% below the previous corresponding period of $40.427 million.

The year to date turnover, EBIT, and PBT were also provided and compared to budget. Turnover was $197.459 million whilst the budgeted figure was $219.892 million. Operating EBIT was a negative $1.339 million with the budgeted figure at $11.991 million. PBT was negative $8.215 million with the budgeted figure at $7.701 million. The information demonstrated that for the period to 31 October 2009 Gunns operated at 10.2% below budgeted turnover, 111.2% below budgeted EBIT and 206.7% below PBT.

Gunns had a share trading policy which applied to all directors which prohibited them from engaging in short term trading in the company's shares. That policy allowed trading in a period of not less than one business day nor more than one month after the release of the half-yearly annual results or significant market announcements; or alternatively, for that same period after the annual general meeting. The Chairman had a discretion to waive this requirement in exceptional circumstances on application from the directors and the company secretary, Mr Wayne Chapman. For other designated employees, the company secretary had a discretion. Both the applications and any approvals had to be in writing, but customarily the process was carried out orally. As the AGM had taken place on 11 November 2009, in accordance with the share trading policy, the window for trading by directors was between 12 November and 12 December 2009. On the morning before the Board meeting on 26 November, the offender told the company secretary that he had a serious health concern, and that he would need to quickly sell some shares in order to get his financial affairs in order. Mr Chapman told the offender that they were then within a one month window period following the AGM.

On 2 December 2009 the offender telephoned a broker, Mr Ron Hay, and instructed him to sell three million Gunns shares at no lower than 90 cents per share. The shares were progressively sold over 2 and 3 December, at a total price of $2,715,617.50. On 4 December 2009 the offender again telephoned the broker and instructed him to sell a further 500,000 Gunns shares at not less than 90 cents. 404,178 shares were sold between 4 December and 7 December for a total of $362,618.63. The disposal of the shares by two tranches was designed to ensure the best price available, given the prevailing market conditions and the volume of shares the offender wanted to sell. On the morning of 8 December 2009 the offender cancelled the sale of approximately 96,000 shares unsold at that time.

The results for the half-year to December 2009 were released to the market and made publicly available on 22 February 2010. On the last trading day before the release, Gunns shares had traded between 84.5 cents and $1.04. On the day of the release of the information, the shares opened at 87.5 cents and closed at 68.5 cents, with a value weighted average price for the day of 73.5 cents per share on a significantly increased turnover. I will need to return to the chronology of events and some aspects of these facts.

There is no suggestion that the volume of shares sold or any other aspect of the sales had any impact on the market. The Crown does put the proposition that the offender avoided a lesser price for the shares by selling in early December 2009, than if he had waited until the trading window following the announcement of the half-yearly results. The first day of that window was 23 February 2010. The total of the suggested avoided loss is $798,798.54. This figure represents the proceeds of the offender's sales, less the value weighted average price on 23 February 2010 of 66.96 cents per share, multiplied by the number of shares he sold. In short, if the offender had complied with the provision, and not sold until the information was publicly available, it is suggested he would have lost that amount. Similar considerations apply to this proposition as apply to the receipt of the so-called "announcement effect"evidence which is relevant as being probative of the materiality of the information said to be price sensitive. It is recognised that the probative value of such evidence will undoubtedly vary from case to case, one factor being the difference between the particularised inside information and the information publicly released. In addition, there may be other factors affecting the market at the time of the release. See R v Rivkin (2004) 184 FLR 365 at [194] and Hannes v DPP (Cth) (No 2) (2006) 165 A Crim R 151 at [348] – [351]. Senior counsel for the offender, Mr Clelland SC, says that there are a number of difficulties in assessing the impact of the inside information on the market, and hence the suggested loss avoided, by reference to what happened on 22 and 23 February 2010. Suggested deficiencies in that approach include the differences between the inside information and the relevant half-yearly results released on 22 February. The latter related to a six month period, as opposed to the four month period in the October management report. The half-yearly report contained audited information, whilst the inside information was raw unaudited data with the half-yearly figures being subject to end of period adjustments. These observations seem sound. A relevant example of the differences between the figures in the management reports and in the 2009 half-yearly results, comes from the December management report. Year to date revenue is reported as $306.796 million. The EBIT for the year to date is shown as $2.874 million. However, as I read it, the half-yearly report shows revenue as $325.9 million, and as previously noted, the reported EBIT is $4.8 million. Additionally, Mr Clelland submits that had the October figures been released to the market at the time or shortly thereafter, there may well have been an explanation available. For instance, he points out that, on 1 October 2009, Gunns announced that it had entered into discussions with Great Southern Ltd and an associated company, both of those companies being in liquidation with receivers and managers appointed. Negotiations related to developing a proposal in respect of forestry managed investment schemes. The suggestion is that if that had come to fruition, the half-yearly figures or end of year figures would have been considerably more favourable.  Senior counsel for the Crown, Mr Staehli SC, submits that the Court should not ignore what actually happened, and should only ignore it if the connection between the information subsequently released and that which is the subject of the offence is so different that there can be no connection made. I accept that this approach is correct in principle. On the material I have I am satisfied that there is some connection between the information released on 22 February and the inside information. Obviously, the October figures are subsumed within the half-yearly results, but their direct impact is affected by the following two months' results and the auditing process. Although the degree of connection is obscure, I am satisfied that some loss was avoided by selling the shares in early December 2009, as distinct from February 2010, and hence the offender has benefited. However, on the material I have, I am simply unable to attempt any assessment of that benefit.

I turn to the offender's personal circumstances. He is 70 years old. He has no prior convictions. He is married; his wife suffers significant health problems. He is the father of two and the grandfather of three. He is presently involved in running a small business making timber veneers which has 22 full-time employees. He was born in Deloraine and after his mother died when he was 7, he went to boarding school in Hobart. He left after grade 10 and has no further educational qualifications. He worked at his father's sawmill for about three years before successfully applying for a manager's job at a sawmill in Oatlands. He was there for about 10 years managing and working in the mill. In about 1973, the offender was offered the position of manager at the Waverley sawmill of Gunns Brothers. Shortly after, he became timber manager for Gunns, and some time after that he assumed control of the business and acquired some shares in the company. In about 1986, a public company, Gunns Limited, was formed. The offender became general manager and a director. He borrowed substantial amounts and then reinvested dividends to acquire shares in the company. His interest was in acquisition, not in trading, as he strongly believed in the company's viability. The company expanded and diversified. In 2001, Mr Gay was made Chairman of the Board. At the peak of its operations the company employed over 2,000 people, and in 2005 it was in the list of Australia's top 100 companies. The offender was content to have the company's headquarters remain in Launceston. I am told, and there is no reason not to accept it, that this was a manifestation of his wish for the company to benefit the local community through direct and indirect employment. In the further years leading up to the end of 2009, the company faced difficulties through various things such as the rising Australian dollar, a decreased demand for woodchips, along with other adverse conditions which affected its profitability and hence its share price.

I have been provided with a large amount of testimonial material. There are letters of support from the offender's immediate family and nine friends or close associates. There are character references from some 44 people from various backgrounds, those people being friends, associates, business associates and former employees. It is unnecessary to detail any of this material. Its effect is to show the offender as a person of exemplary character, a generous and caring person of honesty and integrity who was principally motivated by the desire to help the local community, and Tasmania generally. This was not only through employment and business opportunities, but it involved much support for the community and sporting organisations. It extended to helping individuals who needed a helping hand, such as young unemployed persons, ex-prisoners, and other people facing unemployment and homelessness. These are persons to whom others might not have been prepared to offer help. The number of groups, organisations and community-based activities supported at the instigation of the offender is considerable, and the range is very wide and diverse. It extends to such things as initiating low-cost housing for international disaster relief, the restoration of an iconic historic homestead, supporting a mentoring facility for young mothers, and a project devoted to saving the Tasmanian Devil from extinction. It is well-known that some of Gunns' activities created public controversy. From what I have been told, the offender has been, and continues to be, the subject of threats and harassment which would seem to be concerned with those activities and not with this offending. The appalling low point of this behaviour was perhaps the poisoning of his dog at his home. It seems that some in the community may hold views at odds with those expressed in the material to which I have referred. Of course, my role is not to make any assessment or comment about Gunns' activities. My task requires me to assess the information provided to me, and on that material and in the absence of any conflicting material, I am satisfied that the offender is of exemplary character, a man respected and admired by many, with a reputation of honesty and integrity.

The state of the offender's health is relevant to the commission of the offence, as well as to his present circumstances. I will deal with that in the context of setting out a more detailed chronology of events. In October 2008, the offender was first suspected of having prostate cancer. Shortly afterwards, the diagnosis was confirmed.  The oncologist describes a high grade malignancy, the fact of which he says, he stressed to Mr Gay. At that time the prognosis was poor. Mr Gay underwent treatment for a number of months, which included radiation and an invasive form of therapy involving radioactive wires. In late 2008, the offender had told his accountant, Mr Robert Watson, that he had been ill with prostate cancer and that he wanted to sell 4 million Gunns shares to reduce his debt to the ANZ Bank. He asked Mr Watson to look at the tax implications for the proposed sale, saying that he did not want the added stress of a large amount of debt, and if he died he did not want to leave a lot of debt to those who survived him. On 16 January 2009, Mr Watson sent a letter to Mr Gay outlining the tax implications of the proposed sale. After that advice was given, there were ongoing discussions between the two men to effect Mr Gay's intention to sell the company shares to reduce his debt to the bank.

After those discussions between Mr Gay and his accountant, there were ongoing discussions with the bank, in relation to the reduction of his indebtedness. In 2009, Mr Gay's assets, including the shares totalled about $35.75 million, and he owed the bank $14.372 million. By February 2009, it was thought that the cancer treatment had been successful, but by May of that year, the disease indicator levels rose, and were persistently high through to October 2009.

In the seven to ten days from 14 October 2009, Mr Gay saw his general practitioner, the radiation oncologist, and the urological surgeon. A recurrent malignancy was suspected. Having undergone tests and scans, the offender was started on hormonal treatment known as androgen deprivation therapy. The surgeon reports that there is a mental impact of sudden androgen deprivation associated with this hormonal suppressive therapy. That impact is manifested in mood changes, depression and decreased mental acuity. This is evident, apparently, in many subjected to this therapy. It can contribute to poor judgment. Those close to the offender report that the mental effects of the diagnosis and the physical effects of the treatment were marked. In October 2009 Mr Gay was concerned that he might only have a short time to live, and was anxious to clear his debts so that he could make proper provision for his family. The offender's personal assistant at the time says that the offender was visibly distracted and suffering mental strain after the relapse. Generally, it is clear that the offender was struggling to cope with the fact that he might not have long to live, and was concerned to reorganise his financial affairs. In mid-November 2009, before the November Board meeting, the offender told Mr Christopher Cooper, the ANZ, bank manager, that he, Mr Gay, wished to reduce his indebtedness to the bank. Specifically, he said wanted to pay out a commercial bill facility and the $2.1 million facility secured over the family home. On about 13 November 2009 the offender contacted Mr Hay, the stockbroker, and told him that he wanted to sell some Gunns shares. On the same day his accountant provided the broker with holder identification information to permit the sale of those shares over which security was held by the ANZ Bank. Some time between 19 and 26 November 2009 Mr Gay would have received the Board pack containing the October management report which contained the inside information. Accordingly, it is clear that the expressed intention to sell shares because of ill-health, and the need to reduce debt, predated the receipt of the October 2009 management report.

It will be recalled that on the morning before the Board meeting on 26 November, Mr Gay said to Mr Chapman words to the effect, that he had had an appointment with his doctor, that he had a very serious health concern and would need to sell some shares to get his financial affairs in order. Additionally, there is evidence from a director, Mr Richard Millar, that at the Board meeting, the offender said that he was going to dispose of some shares, as he wanted to reduce his debt levels. Mr Millar says that no one raised any issues about the intended disposal.  Another director, Mr Robin Gray, says that in about July 2009 Mr Gay had mentioned his illness and said that he had been advised to get his affairs in order and would need to sell some shares to do so. Mr Gray says that before December 2009 the offender said at a Board meeting, either during the meeting as such, or over lunch, that he would have to sell some shares.  However, as I understand it, the other directors say either that they have no recollection of that being said, or that their recollection is that it was not said. As no evidence was called it is not possible to resolve this issue, but the fact is not critical to the outcome. I will come back to what may be made of it.  The last thing to be noted in this chronology is that on 8 December 2009, the day after the last sales, a Change of Director's Interest Notice was lodged with the ASX. That contained full and accurate details of the offender's trading and his change in interests in Gunns shares.

Before moving on, I should note that the offender's condition is currently stable with no evidence of biochemical or overt tumour aggression, and the indicator levels have remained fully suppressed. However, the likelihood and the timing of any further resurgence cannot be predicted with any certainty. He will need continued close monitoring and possible future treatment. I should also note that the shares were sold at a substantial loss, and the offender still holds the balance of his Gunns shares, totalling about 12 million, which are effectively valueless.

Section 16A of the Crimes Act 1914 (Cth) creates the fundamental obligation on a court to impose a sentence that is of a severity appropriate in all the circumstances of the offence. Under that section, I must take into account specified matters to the extent that they are relevant and known. I will deal with those which I see to be relevant and which were the subject of discussion by counsel, in the order in which they appear in s16A(2).  I think that what follows needs to be put in the context of the submissions made in this case. The Crown submits that given the objective seriousness of the offence, and the importance of general deterrence, a sentence of imprisonment is the only appropriate sentence. The Crown does accept however, that immediate release from such a term by way of a recognizance release order may well be justified, and does not press for any time in prison to be actually served, at least, of course, immediately. Section 17A of the Crimes Act directs me not to pass a sentence of imprisonment unless, after having considered all other available sentences, I am satisfied that no other sentence is appropriate in all of the circumstances of the case. For the offender, it is submitted that I could not be so satisfied. I have a duty to independently determine the appropriate sentence, and I need to consider whether imprisonment is appropriate. I say at once though, that if imprisonment is the only appropriate sentence, I regard the Crown's position as one properly adopted and would proceed on that basis.

The nature and circumstances of the offence. Amongst other things, the factor of general deterrence falls to be considered. It is a weighty factor. It is well established that in general terms, the crime of insider trading is a serious offence. The particular evil to which the provisions are directed is trading founded on information not generally available: Mansfield v R (2012) 87 ALJR 20 at [47]. But there are sound policy reasons for not requiring a causal link between trading and the possession of inside information. The policy behind the prohibition on insider trading is to maintain fairness within the stock market, giving all market participants equal access to relevant information, to maintain market integrity and confidence in commerce, and to prevent loss to and other adverse impacts on the company issuing the securities, its shareholders and investors. It is also often acknowledged that insider trading is particularly hard to detect. There is a strong public interest in seeking to discourage insider trader activities among company directors, officers and those who are involved in, or closely associated with, the stock market. For these propositions see R v McKay (2007) 61 ACSR 470 at [60], R v Rivkin (2003) 198 ALR 400 at [40] and R v Doff (2005) 54 ACSR 200 at [56].

Very often, insider trading involves a breach of trust which is a significant factor: Hartman v R (2011) 87 ACSR 52 at [94]. That may be exacerbated by the position occupied by the offender. In this case, it can be said the offender was a true insider. He held the senior position on the Board. I also accept the Crown's submission that the quality of the inside information was high in the sense that it was held only by the Board members and officers of the company. It might not fit into the highest grade category which would include such things as information about imminent takeovers or bank foreclosures, but it was nonetheless high grade information. The evidence shows that a number of different research reports for Gunns predicted that the company would under-perform to 31 December 2009, but the extent to which this under-performance, as revealed in the October management report, was severely underestimated.

The Crown submits that this offence retains the general characteristics of insider trading. It undermined the integrity of the market. At the same time the Crown accepts that the circumstances are different to what may be regarded as the more common form of insider trading. The offender's decision to sell the shares was not kept secret from the company, and there was no breach of trust in relation to it in that sense. The sale of shares was promptly reported to the ASX. In the offender's favour, and considerably so, is the fact that the sales were not triggered by the receipt of the information. That is to say, the trading was not caused by receiving the information.  It is quite clear that the offender had for some time been considering selling a parcel of shares, and that the actual decision to do so was finalised in the weeks leading up to the November Board meeting. There is undisputed evidence that he discussed the sale with Mr Chapman. I infer that any concerns he may have had were allayed by Mr Chapman's response. I am asked to infer that he also derived comfort from the silence of the other directors who knew of his intentions. Even accepting that Mr Gay told at least two other directors of his intentions, I am not able to draw that inference, but the fact has some significance in that he was not told that he should not go ahead, and not warned that he needed to carefully consider his position. The sales took place when the offender was dealing with a recurrence of his serious and possibly life threatening illness. He thought his time was limited. He was likely to have been adversely affected by the treatment. Lastly, as noted earlier, the plea was entered and accepted on the basis that the offender ought to have known that the information was price sensitive and hence ought not to have gone ahead, not that he knew of the nature of the information and was conscious that he should not have sold the shares. Plainly enough, the offender, placed as he was with his knowledge and skills, ought to have adverted to the nature of the information.

Circumstances of any victim of the offence/any injury, loss or damage. It is an accepted proposition that insider trading is not a victimless crime. It is the investing community at large which is the victim, the injury being the loss of confidence in the efficacy and integrity of the market. It has also been said that a further class of victims is those persons who traded or held their position at the relevant time, without the benefit of the knowledge available to the offender. See R v Rivkin (2004) 184 FLR 365 at [412] and R v Hartman [2010] NSWSC 1422 at [45]. Those considerations have some weight.

Contrition and the plea of guilty. The offender is entitled to some credit for his plea of guilty. It is to be taken as an expression of a willingness to facilitate the course of justice: Cameron v R (2002) 209 CLR 339 at 343 [14]. I was not invited to, and do not, put any greater significance on it than that, but it remains a mitigating factor of some weight for that reason.

The deterrent effect of any sentence on the offender. I am satisfied that I should not give any real weight to the factor of personal deterrence. I am satisfied that, having regard to the particular circumstances of the offence, the fact of the proceedings and their attendant publicity, and the offender's present personal circumstances, there is no appreciable risk of re-offending.

Adequate punishment of the offender for the offence. As I see it, consideration of this factor under s16A does not include factors of general and personal deterrence. It relates to a different objective of sentencing; that of retribution and denunciation. Consideration of these aspects in this case raises issues of the publicity and the consequences of conviction. I accept that because of the high profile of Gunns, and the high profile of the offender as the public face of Gunns in many of its activities, these proceedings have attracted considerable publicity. No doubt that has been intrusive at times. However there is nothing before me to suggest that these proceedings themselves have been responsible for such a level of derision or humiliation, so as to amount to an extra-curial punishment. Nonetheless, what I perceive to be is an unusual level of publicity given to the offender's wrongdoing is something to be taken into account. More readily ascertainable is the effect of conviction, the appropriateness of which is not in dispute. Upon conviction, s206B(1)(b) of the Corporations Act will operate to disqualify the offender from managing corporations. This in itself is a penalty: Rich v ASIC (2004) 220 CLR 129 at [37].

Character, antecedents, age and physical condition.  I have already set out the relevant facts. As to the offender's good character, it has often been observed that so-called white collar crime is rarely committed by people who have a criminal history. Further, the relevance of good character is of lesser significance for such crimes, because it is that very factor which normally places the offender in a position to commit the offence. See R v Rivkin (2004) 184 FLR 365 at [410] and R v Bateson [2011] NSWSC 643 at [33]. At the same time, I accept that this does not mean that good character is overwhelmed or swept aside in the sentencing function. It informs the aspects of personal deterrence, rehabilitation, what is adequate punishment for the individual, and the genuineness of any asserted contrition: DPP v O'Reilly [2010] VSC 138 at [17]. The offender's ill-health is, of course, relevant to the reason for his offending. Otherwise ill-health is only mitigating where it renders punishment more burdensome, or where there is a risk of imprisonment having a grave effect on health: Smith (1987) 44 SASR 587 at 589. There is nothing to establish that any of those features exist in this case.

The prospect of rehabilitation. I have already stated that I do not see the offender as posing a risk in the future, and in the strict terms of the section, I would see his prospects of rehabilitation as excellent.

Probable effect on family. The only relevant matter seems to be the ill-health of the offender's wife which is detailed in the material I have. There is no need for me to set that out. The situation is presently being managed. No doubt his wife's wellbeing is a matter of great concern to the offender, and no doubt his absence would cause grief to her, but there is nothing to suggest that Mrs Gay could not be properly cared for in the offender's absence, or that his imprisonment would gravely affect her wellbeing.

Mr Gay, I hope that I have made clear to you the seriousness of the offence of insider trading. In your case there are several key features which serve to distinguish it from the more usual case of insider trading, and to put it in a less serious category than many which come before the courts. Those features are:

1 You had made up your mind to sell the shares before you came into possession of the price sensitive information. Accordingly, your sales were not activated by the receipt of the information.

2 The decision to sell when you did was prompted by your state of health, and your concerns about how long you had to live. You sold at a time when you were affected in various ways by your condition and its treatment.

3 You spoke to the company secretary about your intended sale, and were told that a window of opportunity was open to you under the company's policy.

4 You are to be dealt with on the basis that you ought to have known that the information was price sensitive, rather than you knew it was.

Having said that, the legislation imposes weighty obligations on people in possession of price sensitive information.  Breaches of that obligation are to be treated seriously. You held a true inside position and one of high responsibility, particularly as Board Chairman. That is a matter of concern. You ought to have exercised far greater care, although as I have indicated, I do not overlook your state of health at the time, and the impact of that on you. I take the view that the distinguishing features of your offending which I have mentioned mean that, having considered all other available sentences, I am not satisfied that no sentence other than imprisonment is appropriate in all of the circumstances. Were it to have been the case that the sale of shares was prompted, even in part, by the inside information, my view would have been different, even notwithstanding your health concerns. Whether or not you would have been required to immediately serve any part of that term is a separate issue.

After carefully considering the remaining options and the competing factors, and the level of your culpability, I consider that the sentence of appropriate severity in all of the circumstances of this case is a conviction and a substantial fine. You are convicted of the one count of insider trading and fined the sum of $50,000.

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