DPP chases Gay for share cash

FORMER timber giant John Gay could be stung for more than $3 million for his earnings from insider trading when the case against him returns in November.

The Commonwealth Director of Public Prosecutions took action against Gay under the Proceeds of Crime 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.

The matter was back in the Supreme Court of Tasmania in Hobart this week.

The DPP is seeking $3,095,260.06 from Mr Gay for the gross sale from trading the shares.

The DPP submitted the court may alternatively decide the benefit Mr Gay derived was the difference between what he received for the shares, and what he would have received had the information been available to the market.

The court documents submit the amount would be about half a million dollars.

John Gay

John Gay

Mr Gay was fined $50,000 for insider trading, and during Senate estimates hearings earlier this year Australian Securities and Investment Commission chairman Greg Medcraft said "the whole country" was disappointed with Mr Gay's penalty.

Australia's corporate watchdog had 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.

Chief Justice Alan Blow ordered this week that Mr Gay's lawyers had until November 7 to file and serve any affidavit's he intended to rely on.

A directions hearing will be held by telephone or in person on 17 November.