THE first legal steps have been taken to slap former timber giant John Gay with a proceeds of crime bill that could hit almost $1 million.
The Commonwealth Director of Public Prosecutions has taken action against Mr Gay under the Proceeds of Crimes Act after the former Gunns' managing director was convicted last year of selling more than $3 million in Gunns' shares while privy to price sensitive information in late 2009.
Mr Gay was fined $50,000, and during Senate estimates hearings last week Australian Securities and Investment Commission chairman Greg Medcraft said "the whole country" was disappointed with Mr Gay's penalty.
Changes to the law surrounding insider trading since then could have seen Mr Gay slapped with a $2.4 million penalty if he were sentenced today, after tough "triple penalties" were introduced.
Commonwealth prosecutor Roslyn Shaw told the Supreme Court of Tasmanian in Hobart yesterday that the DPP was yet to settle on how much it would seek to recover in proceeds of crime, and would use expert evidence to determine an amount.
Australia's corporate watchdog has estimated Mr Gay gained $800,000 from the information, but Justice David Porter - who sentenced Mr Gay - said he was unable to determine an amount.
The estimates committee also heard that the first attempt by ASIC to mount a proceeds of crime action was rebuffed by the Australian Federal Police.
Chief Justice Alan Blow yesterday ordered that the DPP had until August 21 to state the amount it seeks from Mr Gay and lodge other material and evidence to be relied on in court so Mr Gay's lawyers could prepare a response.
A direction hearing via telephone is set to be organised after that date and is expected to run in September.