R v Curtis

Supreme Court of NSW|2016-06-02|Before: McCallum J

Judgment

HER HONOUR: Oliver Curtis has been found guilty by a jury of an offence of conspiracy to commit an offence of insider procuring contrary to ss 1311(1)(a) and 1043A(1)(d) of the Corporations Act 2001 (Cth). He now stands to be sentenced for that offence. Section 1043A(1)(d) prohibits a person who possesses inside information from procuring another person to acquire or dispose of relevant Division 3 financial products; s 1311(1) criminalises such conduct.
The offence of conspiracy to commit an offence is punishable as if the offence to which the conspiracy relates had been committed. [1] At the time of Mr Curtis's offending, the offence of insider procuring carried a maximum penalty of imprisonment for 5 years or a fine of $220,000 (or both).
Mr Curtis's co-conspirator was Mr John Hartman. The Crown case was that Mr Hartman had access to inside information about the trading intentions of his employer, Orion Asset Management Limited, in relation to the purchase or sale of shares in certain companies. The unlawful agreement was that, from time to time, when Mr Hartman possessed such information, he would procure Mr Curtis to acquire or dispose of contracts for difference in the same shares, in effect front-running Orion's trading.
The offence was described in the indictment in the following terms: Between about 1 May 2007 and about 30 June 2008 at Sydney in the State of New South Wales, did conspire with John Joseph Hartman to commit an offence, being the contravention of sub-sections 1311(1) and 1043A(1)(d) of the Corporations Act 2001 (Cth). Particulars The agreement was that John Joseph Hartman would, from time to time, procure Oliver Peter Curtis to acquire or dispose of relevant Division 3 Financial Products, namely, Contracts for Difference, when John Joseph Hartman possessed inside information about the trading intentions of Orion Asset Management Limited in relation to the purchase or sale of shares in certain companies and when John Joseph Hartman knew that such information was not generally available and if it were generally available, a reasonable person would expect it to have a material effect on the price or value of those Contracts for Difference.

Circumstances of the offence

The Crimes Act 1914 (Cth) provides that the Court must impose a sentence of a severity appropriate in all the circumstances of the offence. [2] To determine the appropriate sentence, it is necessary to make an assessment of the nature and circumstances of the offence. [3]
In the case of conspiracy, the relevant offence is the agreement that constitutes the conspiracy, not the substantive offence the subject of the agreement. However, although the elements of the offence are complete once there is agreement (here, no later than 25 May 2007), the conspiracy does not end at that point. The Court should assess "the content and duration and reality of the conspiracy" including the offender's role in its subsequent implementation, provided it is borne in mind that an offender is not to be sentenced for offences not charged. [4]
The Crown case rested primarily on the evidence of Mr Hartman. It is clear from the verdict that the jury accepted his evidence, at least insofar as it addressed the essential elements of the offence. I am bound by the jury's verdict in any event but I should record that I also accepted Mr Hartman's evidence. I found him to be a frank and careful witness. He stood up to a skilful and vigorous cross-examination from which, in my assessment, his account of the critical events emerged unscathed. He endured a wholesale, public attack on his character with the patient resignation of a man who had come to terms with the obloquy his past conduct deserved.
Mr Hartman was employed as an equities dealer by Orion in March 2006; he was then aged 20 years. Orion was an investment manager. Its clients were primarily large institutional investors such as superannuation fund managers. At the height of Mr Curtis's trading, it had over $7 billion under management. Orion offered various investment portfolios. Its senior investment managers determined the stocks that would be acquired for each portfolio and the "target weighting" (by percentage) of each stock within a portfolio.
The actual weightings fluctuated with fluctuations in the price of the relevant stocks and as revised from time to time by Orion's senior managers. In order to keep the composition of each portfolio as close as possible to the current target weighting, Orion bought and sold large volumes of shares on a daily basis. Mr Hartman's job was to execute those trades in accordance with the instructions of the senior managers. The instructions were specific as to the stock to be acquired or disposed of over a particular period of time and the parameters (as to volume and price) within which that was to occur, but a measure of discretion was left to Mr Hartman as to the timing of his trading (in theory, so as to enable him to trade in the optimum volume at the best achievable price). Mr Hartman traded millions of dollars' worth of shares on behalf of Orion on a daily basis.
Mr Hartman observed that, owing to the type and volume of shares in which it traded, Orion's trading could have an impact on the price of the relevant stock. In mid-2006, unlawfully and contrary to the terms of his employment, he began trading in his own right using inside information about Orion's trading intentions to "front-run" Orion's trading.
Mr Hartman and Mr Curtis were best friends and each worked in the financial sector. In early 2007, Mr Hartman told Mr Curtis what he had observed about the impact of Orion's trades on the market. They began to discuss the prospect of trading cooperatively using the information available to Mr Hartman about Orion's trading intentions. The Crown case was that the two men agreed on a plan to "front-run" Orion's trading together. The plan was that Mr Hartman would identify appropriate opportunities and would provide trading instructions to Mr Curtis. Mr Curtis was to place trades as instructed and they would share the profits. It was understood that when Mr Hartman identified a particular share for their trading, Mr Curtis was to buy or sell contracts for difference (CFDs) in those shares. By trading in contracts for difference, they were able to make substantial profits within a short period of time from relatively small movements in the price of the underlying share.
Mr Hartman gave evidence that Mr Curtis told him about a method of communicating using a Blackberry device which was secure and virtually undetectable (known as "PIN" messaging or "pinning"). Mr Curtis gave Mr Hartman an old Blackberry for that purpose but they could not get the messaging system working, so Mr Curtis bought Mr Hartman a new Blackberry to enable them to communicate secretly.
The Blackberry was purchased on 23 May 2007. The following day, Mr Curtis opened an account with CMC Markets Asia Pacific Pty Ltd, a company that trades in CFDs. The account was opened in the name of a company, Encounter Investments Pty Ltd, of which Mr Curtis was the sole director. Mr Curtis and Mr Hartman began trading in accordance with their unlawful agreement the following day, on 25 May 2007.
The evidence in the trial included records of 45 separate occasions, beginning on 25 May 2007, on which Mr Curtis opened a CFD position in particular shares on the same day that Orion bought or sold a large volume of the same shares. In most cases Mr Curtis opened his position shortly before Orion's trading began and closed it before Orion finished. The Crown alleged that, on those 45 occasions, Mr Curtis acted on trading instructions sent to him by Mr Hartman via Blackberry PIN message, on each occasion causing Encounter to buy or sell CFDs in accordance with those instructions. There was no electronic record of the content of the PIN messages but Mr Curtis did not contest the evidence of Mr Hartman that such messages were sent; the coincidences between the trading of Orion and that of Encounter on those 45 occasions was such that the inference of cooperation was overwhelmingly strong. Most of Mr Curtis's trading on those occasions earned a profit; on five occasions he incurred a loss.
Although Mr Hartman had previously traded unlawfully in his own right (and, I infer, probably initiated the discussions with Mr Curtis), I accept Mr Hartman's evidence that the plan was one the two men came up with together. [5] I am satisfied beyond reasonable doubt that Mr Curtis was an equal and willing participant in the discussions that resulted in the unlawful agreement. It was Mr Curtis who proposed communication by pinning and who bought the Blackberry. I am satisfied that he did so because he believed their communications by that method would be undetectable. Mr Curtis also provided the funds to begin the trading.
I accept that Mr Hartman was the insider and that there was no breach of trust by Mr Curtis. His culpability is less on that account but it must nonetheless be accepted, as submitted by the Crown, that he knew the source of the information he was to receive and was to that extent complicit in Mr Hartman's breach of trust.
It was established in cross-examination of Mr Hartman at the trial that, when Mr Hartman and Mr Curtis were carrying out the 45 trades, Mr Hartman traded more aggressively than he otherwise would so as to ramp up the price of the relevant shares within a short time frame. Mr Thangaraj SC, who appears with Dr Higgins for Mr Curtis, submitted that the Court should have regard to that circumstance in assessing Mr Curtis's role in the implementation of the conspiracy. He submitted that Mr Hartman's conduct in manipulating the price of the shares in that way, which was unknown to Mr Curtis and did not form part of the unlawful agreement alleged by the Crown, represents "the reality of the conspiracy". [6]
The submission echoed a submission put in support of an application for a directed verdict made during the trial and must be subjected to the same analysis. [7] Mr Hartman's aggressive trading may have enabled the two men to make greater profits more quickly, but it does not follow that the information specified by the Crown as the relevant "inside information" (the fact that Orion was intending on any particular day to buy or sell a particular volume of a particular stock within a particular price range) did not meet the statutory test of materiality; the jury has found that it did. Mr Thangaraj submitted that it was Mr Hartman's manipulation that gave rise to the front-running opportunities, which made the gains near-certain. I accept that was not part of the unlawful agreement and that the seriousness of the agreement is to be assessed for what it was, not for what it was not.
Even so, the reality of the conspiracy is that Mr Curtis carried out 45 trades over a period of 14 months on instructions he believed to be based on inside information. Tape recordings of some of the conversations between Mr Curtis and his broker, Mr Andrew Knight (exhibit C) reveal that Mr Curtis acted on the information he received from Mr Hartman confidently and assertively. Mr Curtis may not have known precisely why their trading was so profitable but it was; they made a net profit of around $1.43 million.
In perhaps his most ambitious submission, Mr Curtis claimed his trading was not undertaken for immediate personal gain (since Mr Hartman received the first distribution of profits in the form of a Cooper Mini). Plainly, however, personal gain was the motive for each man's offending. Profits from the trades carried out pursuant to the conspiracy were used by Mr Curtis to fund a lifestyle of conspicuous extravagance.
As already noted, it must be borne in mind that the 45 trades were relied upon as overt acts pursuant to the conspiracy and were not the subject of separate charges. In that circumstance, it does not follow from the jury's verdict that each individual trade involved the communication of information that was in fact inside information within the meaning of the statute. [8] Mr Curtis is not to be sentenced as if he committed 45 offences relating to inside information. It is significant, however, that Mr Curtis knew or believed the information Mr Hartman would possess would be inside information (as found by the jury). It is not suggested that Mr Curtis was unable to appreciate the serious criminality involved in agreeing to embark upon such a course of trading; on the contrary, the character evidence tendered on his behalf at the proceedings on sentence speaks with one voice as to his intelligence, propriety and business acumen. He must have known what he was agreeing to do was very wrong but simply believed that, by using the Blackberry, they would avoid getting caught.
It was submitted on Mr Curtis's behalf that he did not engage in clandestine conduct. Reference was made in that context to aspects of the Crown case including the fact that Mr Curtis bought the Blackberry and a Ducati for Mr Hartman using his credit card; the fact that he gave true information when opening the CMC Markets account and the fact that he disclosed his own trading to his employer whereas Mr Hartman did not. Some of those matters are explained by the fact that Mr Curtis was not the insider; so long as the Blackberry communications remained secret, he had no need to conceal his trading. In any event, I do not see how the fact that Mr Curtis left a clear forensic trail which resulted in there being a strong case against him mitigates the seriousness of the offence. If the suggestion is that the alleged openness of his conduct reveals he must have believed he was not doing anything wrong, I reject it.
In all the circumstances, in my view the objective seriousness of the offence is high.
I am required to have regard to any loss or damage caused by the offence. [9] It is well established that it is wrong to regard white-collar crime as victimless. [10] It causes loss (albeit unquantifiable) to individual traders and it causes harm to the community at large by damaging the integrity of the market as a level playing field. The offending in the present case, which saw superannuation funds competing with twenty-year-olds using inside information to pay for a skiing holiday, stands as the paradigm for scepticism as to the fair operation of the market.

Offender's response to his offending

Some of the mandatory considerations under the Crimes Act 1914 direct attention to an offender's response to his or her offending. One is the degree to which the offender has shown contrition for the offence by taking action to make reparation for any loss or damage resulting from the offence or in any other manner. [11] That is a difficult issue in the present case. Up to the time the jury returned its verdict, Mr Curtis expressed no contrition to any degree whatsoever. After the verdict was returned, he promptly settled proceedings brought against him under the Proceeds of Crime Act 2002 (Cth) by agreeing to forfeit, from assets restrained by the Commonwealth after the sale of a family property, the whole of the profit of the 45 trades, being the sum of $1,433,727.85. The evidence establishes beyond any doubt that that is the amount of profit the two men made from their 45 trades. It was noted on behalf of Mr Curtis that the sum forfeited is the full amount of that profit, even though he made substantial payments to Mr Hartman during the period of the conspiracy.
The fact that Mr Curtis has made reparation for the whole of the unlawful profit including Mr Hartman's share is relevant and is to be taken into account in favour of Mr Curtis. However, I am not persuaded that the recent forfeiture of that profit shows contrition for the offence. The forfeiture orders were made by consent but "without admissions", notwithstanding the jury's verdict.
A number of character references were tendered at the proceedings on sentence including some in which it was asserted that Mr Curtis has expressed remorse. Mr Gerard Arbuckle said Mr Curtis "regrets his failings"; Ms Doreen Doris said he is "very remorseful" and has told her that "the events in question" are a source of "intense regret and embarrassment"; and Ms Susan Ingham said he has shown "a lot of remorse" and extreme anxiety for his wife and family. However, Mr Curtis did not give evidence at the proceedings on sentence and has not expressed contrition openly or accepted any responsibility for his offending. In that context, the forfeiture of the sum of $1.43 million "without admissions" between verdict and sentence may be regarded as cynical. That is not an aggravating factor but I am not persuaded that Mr Curtis is entitled to any favourable consideration for contrition.
The Crown accepts that there has been a measure of cooperation by Mr Curtis in the conduct of the trial which resulted in a significant shortening of the hearing. That reveals some preparedness to cooperate with law enforcement agencies. [12] To a degree, however, it also reflects the strength of the Crown case owing to the careful work undertaken by ASIC in bringing this case to trial. The weight of Mr Curtis's cooperation in the conduct of the trial must be assessed in the context of the whole of the investigation of the offence. Mr Curtis declined several opportunities to co-operate voluntarily with ASIC; as a result, extensive investigation had to be undertaken to obtain evidence of the overt acts. The degree of cooperation by Mr Curtis stands in stark contrast to that of his co-offender, Mr Hartman, who quickly and frankly acknowledged extensive wrong-doing and assisted ASIC to investigate it. Mr Curtis's punishment is not to be increased on that account but the weight to be given to the degree of cooperation offered at the end of the process is small.

Circumstances of the offender

I am required to have regard to Mr Curtis's subjective circumstances including any relevant aspect of his character, antecedents, age, means and physical or mental condition. [13]
An important consideration in that respect is the timing of the offence and the period of time that has since passed. As noted on behalf of Mr Curtis, the offence was committed 9 years ago, when Mr Curtis was aged 21 years. He is now aged 30 years. I accept that his circumstances have changed significantly in the intervening period. I also accept that he is to be sentenced according to the law as it stood at the time of the offence; the fact that the maximum penalty for insider trading offences has since been increased is irrelevant. [14]
Mr Curtis's youth at the time of the offence is a relevant consideration but not one of primary significance. When Mr Hartman was sentenced, the Court of Criminal Appeal did not accept that his youth and relative immaturity lessened the importance of general deterrence. [15] The Court considered that Mr Hartman had been operating in the adult sphere of business and commerce and was himself educated and worldly. The Court emphasised the need to deter young adults from taking the significant financial advantages offered by the contemporary business world in circumstances where, at the same time, they reject the legal and moral constraints properly imposed upon their commercial behaviour. Those remarks are of equal application here.
Mr Curtis has no prior convictions. As already noted, character references were tendered at the proceedings on sentence which spoke of him in glowing terms. Two of the character referees expanded upon their written references in oral evidence.
The first was Mr Kevin Hobgood-Brown AO, who was formerly the managing partner at Riverstone Advisory and met Mr Curtis in that context. They worked closely together for many years, primarily advising Chinese clients in the mining resources industry. He described Mr Curtis as "the hardest worker", "smart" and a "role model" who was "particularly skilful at financial modelling, which is not an easy area". Mr Hopgood-Brown considered that Mr Curtis had matured during the period he worked with him professionally and thought the chances of his committing an offence in the future were "close to zero".
The second character witness was Mr Antony Magnus, a businessman and close family friend. He described Mr Curtis as "a boys' boy" who matured more quickly than others around him. He described him as a doting father and husband. He said that the impact of the verdict has been stressful, causing Mr Curtis to lose weight, but that it has not affected his love for his family. He said Mr Curtis remains positive and thought the chances of his re-offending were "zero".
The character evidence establishes that, leaving aside the conduct for which Mr Curtis is to be sentenced, there is much to be said for him as a person of good character. It has been suggested in some cases involving white collar offences that good character is not a significant mitigating factor because it is the fact of good character that places such persons in a position to commit offences of that kind. [16] I do not think that proposition is applicable in the present case, since Mr Curtis was not the insider. His ability to trade on instructions given by Mr Hartman was not enabled by his good standing. However, the fact that Mr Curtis's offending occurred over an extended period of time (involving many deliberate decisions to give effect to the conspiracy) reduces the weight that can properly be given to his good character. [17] Further, as submitted by the Crown, the fact that persons of otherwise good character and compelling personal circumstances are tempted to commit offences of this kind calls for the imposition of deterrent sentences for such offences.
One of the mandatory considerations in sentencing for federal offences is "the prospect of rehabilitation" of the offender. [18] It is generally considered that acknowledgment of wrong-doing is a necessary first step to rehabilitation. It is troubling that, unlike Mr Hartman, Mr Curtis has not embraced responsibility for his offending. While many people have spoken of his positive qualities in business and as a family man, he shows no sign of progression beyond the self-interested pursuit of material wealth which prompted his offending. On balance, however, I think the indications are that he is unlikely to re-offend. I accept, as submitted by Mr Thangaraj, that the ignominy of these proceedings will have had a salutary effect on him. His personal circumstances are such as to motivate him to avoid any future experience of that kind.
Section 16A(2)(p) of the Crimes Act requires the Court to take into account the probable effect that any sentence under consideration would have on the offender's family. There is binding authority to the effect that such circumstances may not be given substantial weight unless they can be characterised as "exceptional". The correctness of that principle was questioned by one member of the Court of Criminal Appeal [19] in R v Zerafa on the basis that it puts a gloss on the terms of the section. [20] After a comprehensive review of the relevant authorities, Beech-Jones J noted in that case that the origin of the principle was a decision concerning State legislation and that none of the judgments that have applied it have attempted to reconcile it with the express words of s 16A(2)(p). In my respectful opinion, there is much force in his Honour's view. However, Mr Thangaraj accepted that I am bound to follow the existing principle and that exceptional circumstances are not established here. Even if the approach favoured by Beech-Jones J were to prevail, it is doubtful whether that consideration would be of significant weight in the circumstances of this case. The prospect of family separation is always gutting, especially where young children are concerned, but Mr Curtis's family is well-resourced and better placed than many to meet that event.
It was submitted that Mr Curtis should be given "credit" for the curtailment of his liberty and his compliance with orders of the Court for the period of 3½ years during which he has been on bail. It was accepted that the weight to be given to such a consideration will vary from case to case depending upon what other factors need to be considered and what sentence is required in the particular case to address the purpose of punishment: R v Fowler. [21] In that case, the Court said that less weight may be given to such a consideration where the imposition of a sentence of imprisonment is required for the purpose of denouncing the crime and reflecting general deterrence.
The offender in Fowler had suffered "obvious and significant disruption" to his life and restriction upon his liberty over a lengthy period including being required to remain in a particular town and reporting to police, initially three times a day, later twice a day and ultimately once a day. He was convicted of murder but the conviction was quashed and he was again released on bail on conditions requiring him to live with his mother and report to police twice a week. He was not permitted to travel. The sentencing judge's decision not to reduce the sentence to reflect the penal consequence of that lengthy curtailment of his liberty was upheld by the Court of Criminal Appeal.
The suggestion that Mr Curtis's bail was unduly restrictive makes a questionable assumption about the respective rights of different classes of people. The "penal consequence" relied upon in the present case is that, for a lengthy period, Mr Curtis was not permitted to travel without ASIC's consent and was required to lodge an itinerary for any proposed travel. He has travelled overseas 24 times whilst on bail, which required him to submit 39 travel requests. I do not accept that those constraints curtailed Mr Curtis's liberty to such an extent as to warrant "credit" in any sentence to be imposed on him.
It was submitted on behalf of Mr Curtis that he has suffered loss of career and damage to his professional reputation amounting to "extra-curial" punishment. As to loss of career, I do not think that is a consideration to be given any significant weight in the present case. It was acknowledged that Mr Curtis's father, who is evidently a successful investment banker, will "always look after him". In that circumstance, the adversity faced by Mr Curtis due to his offending is considerably less than for many people convicted of offences of dishonesty. I accept that an "independent career" (one that is independent of his father's support) may be foreclosed to him but he acknowledges that he has, within that constraint, developed a "sound and successful" career.
More pertinently, it was submitted that Mr Curtis has suffered extra-curial punishment by way of damage to his professional reputation and professional relationships as a result of the intense media scrutiny this case has attracted. The degree of media attention to this case has certainly been considerable. It has not all been negative and not all directed at Mr Curtis; his barrister's cross-examination of Mr Hartman made for good copy. However, I accept that Mr Curtis has also received more than his share of bad press.
The Crown submitted that media coverage in this case does not, in the absence of evidence, rise to the level of extra-curial punishment that has been accepted in other cases. [22] A small number of extremely nasty remarks have been published about Mr Curtis since the verdict. Ironically, after centuries of relative civility, our most recent technological advances have facilitated an explosion of dissemination of medieval attitudes. I accept such remarks must have been extremely distressing to Mr Curtis. There is no evidence that Mr Curtis himself has invited media attention; he is not to be equated with his wife in this context.
On balance, although the degree of adverse media reporting has not reached the level of some cases, I accept that Mr Curtis is likely to have suffered to some degree on that account and have given some small weight to that consideration.

Delay

As already noted, the offence was committed 9 years ago. It is necessary to consider the significance of that delay. Delay itself is not a mitigating factor but may be causative of a relevant consideration, such as where there has been significant progress towards rehabilitation in the meantime. The relevance of delay will depend upon the circumstances of the individual case. Where there is an unreasonable period of delay on the part of the prosecutor between the detection of the offence and the laying of a charge, the punitive and deterrent aspects of the sentencing process should ordinarily not be allowed to prevail so as to destroy the results of any demonstrated rehabilitation. [23]
Mr Curtis's conduct was first reported to ASIC by Mr Hartman in early 2009 but he was not charged until early 2013. The period since that time has been spent on various interlocutory applications; I do not think it is possible to attribute primary responsibility to either party for that further period of delay. As to the period before Mr Curtis was charged, I accept that the degree of delay is undesirable but I am not persuaded that it was unreasonable, in all the circumstances. The delay was amply explained in an affidavit provided by ASIC in response to Mr Curtis's submission. The delay was contributed to significantly by Mr Curtis's choice not to cooperate with ASIC to any degree until close to the trial.
In R v Joffe; R v Stromer, R A Hulme J considered that the delay in the investigation (3 years) and in the proceedings themselves (5½ years) was a significant feature to be taken into account. The Crown conceded rehabilitation during the period of the delay had been demonstrated. His Honour did not consider it would be a productive exercise to trawl through the complex interlocutory history of the proceedings to determine where the responsibility for the delay fell and was content to accept that it involved a form of punishment in itself in the adverse psychological impact it had on each of the offenders. Each had lost his employment and been unemployed for a considerable period; one had found work only recently. One suffered from a mental condition which his Honour found reduced his moral culpability and the need for denunciation of his conduct. There was also "powerful evidence" that he was suffering from anorexia nervosa which the judge accepted would render any custodial sentence more onerous in his case. Each offender in that case was sentenced to a term of imprisonment that was wholly suspended.
Mr Curtis has not suffered in the ways described in respect of those offenders. I accept, however, that he has demonstrated progress towards rehabilitation. The character evidence establishes that he is now well-regarded in his field and that he is a doting husband and father. The prospect of interrupting his present life circumstances with a term of imprisonment would undoubtedly be stressful and upsetting to him and those around him. I am not persuaded that it would destroy the rehabilitation he has achieved. He is evidently a man of considerable resilience. As already noted, he frankly acknowledges that he will always enjoy the support of his father. His obvious affection for his family and good employment prospects are likely to promote continued rehabilitation, even if he is sentenced to a term of imprisonment.

Deterrence and punishment

I accept, as submitted by the Crown, that the primary considerations in the present case are general deterrence and the need to impose adequate punishment. [24] The High Court has recognised that, in the case of serious tax fraud offences, the necessary deterrent and punitive effects of the sentence must be reflected in both the head sentence and in any provision for earlier release from custody. Those remarks are of equal application to the present offence. In considering any appropriate release order, the task is to determine the period of imprisonment that justice requires the offender must serve in custody. [25]
I am required to consider the deterrent effect of any sentence on Mr Curtis and on others. [26] In light of my finding that Mr Curtis is unlikely to re-offend, I do not think there is a need for personal deterrence.
General deterrence is another matter. The efficacy of punishment as a deterrent to others has been doubted in some contexts; to a degree, I share those doubts. In my view, however, punishment by a sentence of imprisonment has real bite as a deterrent to others in the case of white-collar crime. White-collar crime is a field in which, perhaps more than any other, offending is often a choice freely made by well-educated people from privileged backgrounds, prompted by greed rather than the more pernicious influences of poverty, mental illness or addiction that grip other communities. The threat of being sent to gaol, provided it is perceived as a real threat and not one judges will hesitate to enforce, is likely to operate as a powerful deterrent to men and women of business.
The weight of that factor is appropriately informed by the relative prevalence and detectability of the offence. Offences relating to inside information are notoriously difficult to detect, investigate and prosecute. [27] When charges are laid, they are often defended vigorously, with the assistance of the best lawyers. The contrast with the resources and incarceration rates of other sectors of the community is stark.
A fundamental aspect of the rule of law is equality. The Court is required, so far as the law permits, to treat like cases alike and to give differential treatment according to relevant differences. That consideration resonates in two ways in the present case. First, it is necessary to endeavour to determine a sentence that sits in parity with the sentence imposed on Mr Hartman, allowing for relevant differences between the two cases. Secondly, the Court must be astute to dispel any perception that white collar offenders and other classes of people who commit offences of dishonesty (without violence or breach of trust) are treated unequally. The disproportionate incarceration rates of indigenous offenders are notorious. To discriminate in favour of white collar offenders for like offences would suffer the Court to become the instrument of unequal justice and so bring the administration of justice into disrepute.
Returning to the sentences imposed on Mr Hartman, the comparison is difficult and the differences many. Perhaps most importantly, he was not charged with the same offence as Mr Curtis but with a number of tipping offences. At a broad level, the degree of culpability is roughly the same; certainly, I would accept that Mr Curtis's offending is not more serious than the tipping offences for which Mr Hartman was sentenced, notwithstanding the greater number of trades relied upon by way of overt acts. As already noted, Mr Hartman was the insider. That fact alone renders his conduct more serious, although not significantly.
The sentence imposed upon Mr Hartman by the Court of Appeal would be regarded by some as a lenient one but I think I am bound to accept that it marks the upper limit of any sentence the Court would consider imposing on Mr Curtis. The total, undiscounted sentence for Mr Hartman's tipping offences (the discount was at least 35%) was almost 28 months.
Section 17A of the Crimes Act 1914 provides that a court shall not pass a sentence of imprisonment on any person for a federal offence unless, after having considered all other available sentences, the court is satisfied that no other sentence is appropriate in all the circumstances of the case.
A significant focus of the offender's submissions in the present case was the contention that there is no requirement for him to serve a sentence of "full time imprisonment". The submission must be considered at two stages. First, it is necessary to determine whether it would be appropriate to deal with the offender other than by sentencing him to imprisonment at all (such as by imposing a fine or releasing him, without passing sentence, on a recognisance under s 20(1)(a)). I do not think it was suggested that the Court would take either of those courses in the present case. Rather, the focus of the submission was that there is no need for Mr Curtis to serve any portion of a sentence of imprisonment by way of full-time custody.
Mr Thangaraj noted that several alternatives to full-time custody are available. If the offender were sentenced to imprisonment for not more than 18 months, the Court would have power to make a home detention order; if he were sentenced to imprisonment for not more than two years, an intensive correction order could be made.
The Court also has power to impose a sentence of imprisonment that is wholly suspended. In the case of a sentence of imprisonment of not more than three years, the Court must make a recognisance release order. [28] Such an order can be made in terms directing that the offender be released either forthwith or after serving a specified period of imprisonment. [29] As has been noted by the High Court, that section confers power to make an order for the offender's release at any time within the period of the sentence imposed, from the time at which the sentence is imposed, to a very short time before it expires. [30]
Mr Thangaraj submitted that an intensive correction order or a suspended sentence would be appropriate in the present case.
The Crown noted that the Court of Criminal Appeal has characterised insider trading as a form of cheating or fraud; the relevant authorities include my own remarks in R v Glynatsis. [31] I did not intend by those remarks to state a rule that insider traders must go to gaol; the degree of severity appropriate in all the circumstances can only be determined on a case by case basis.
However, the evidence in the trial and my consideration of the factors discussed in this judgment has persuaded me that a sentence of imprisonment must be imposed in this case. I do not think any lesser sentence would adequately reflect the seriousness of the offence. I am further persuaded by those considerations that justice requires that a portion of the sentence be served in custody. I propose to impose a sentence of imprisonment for two years with a recognisance release order directing that Mr Curtis be released after serving one year of that sentence.
Oliver Curtis, please stand: 1. I convict you of the offence of conspiracy to commit an offence of insider procuring contrary to ss 1311(1)(a) and 1043A(1)(d) of the Corporations Act 2001 (Cth). 2. I sentence you to a term of imprisonment for two years commencing on 24 June 2016 and expiring on 23 June 2018. 3. I direct that you be released after serving one year of imprisonment upon your giving security by recognisance in the sum of $2000 without surety that you will be of good behaviour for the balance of the term of the sentence.

Endnotes

Criminal Code (Cth), s 11.5(1).
Crimes Act 1914 (Cth), s 16A(1).
Crimes Act 1914 (Cth), s 16A(2)(a).
Savvas v The Queen (1995) 183 CLR 1 at 6-9.
T154.4-8.
Savvas at 6.
R v Curtis (No 2) [2016] NSWSC 795 at [61]-[62].
The elements of the offence were considered in my earlier judgment in R v Curtis (No 2) [2016] NSWSC 795 at [17]-[32].
Crimes Act 1914 (Cth), s 16A(2)(e).
R v Rivkin [2004] NSWCCA 7; (2004) 184 FLR 365 at [412]; R v De Silva [2011] NSWSC 243 at [52]-[53],[55]; R v Xiao [2016] NSWSC 240 at [90]; R v Joffe & Stromer [2015] NSWSC 741; 106 ASCR 525 at [97]; Khoo v R [2013] NSWCCA 323 at [10],[12] and [64]; Hartman v R [2011] NSWCCA 261 at [94].
Crimes Act 1914 (Cth), ss 16A(2)(f), (i), (ii)
Crimes Act 1914 (Cth), ss 16A(2)(h)
Crimes Act 1914 (Cth), s 16A(2)(m)
As I acknowledged in R v Fysh [2012] NSWSC 1587 at [5].
Hartman v R [2011] NSWCCA 261 at [93]; see also Kamay v R [2015] VSCA 296 at [53]
R v El Rashid Unreported, NSW Court of Criminal Appeal, 60682 of 1994, 7 April 1995, per Gleeson CJ, Mahoney JA and Sperling J agreeing; Rivkin at [410].
R v Kennedy [2000] NSWCC 527 at [22] per Howie J, Simpson J agreeing.
Crimes Act 1914 (Cth), s 16A(2)(n)
And, semble, by the sentencing judge, Simpson J, as her Honour then was.
R v Zerafa [2013] NSWCCA 222 per Beech-Jones J.
[2003] NSWCCA 321;151 A Crim R 166 at [242].
R v Einfeld [2009] NSWSC 19 at [154] ff; R v Whilhelm [2010] NSWSC 378 at [21] to [33].
Scook v The Queen [2008] WASCA 114 at [24].
Crimes Act 1914 (Cth), s 16A(2)(k)
Hili v The Queen; Jones v The Queen [2010] HCA 45 at [41].
Crimes Act 1914 (Cth), ss 16A(2)(j), (ja)
R v Pantano (1990) 49 A Crim R 328 at 330.
Crimes Act 1914, s 19AC(1)
Crimes Act 1914, s 20(1)(b)
Hili at [27].
[2013] NSWCCA 131 at [79]: "The acquisition or disposal of financial products by people having the unfair advantage of inside information is criminalised because it has the capacity to unravel the public trust which is critical to the viability of the market. It is, as previously observed by this Court, a form of cheating. The fact that people of otherwise good character and compelling personal circumstances are tempted to engage in such conduct emphasises the need for the clear deterrent that insider traders should expect to go to gaol". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 June 2016

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