R v Dulhunty; R v Roach

THE FACTS

1. With the consent of senior counsel for each of the present offenders the Crown tendered a lengthy statement of facts which was in the following terms (although Annexures A and B to those facts have not been reproduced in this judgment): OUTLINE OF OFFENCES 1. The offences in this matter relate to a single conspiracy to commit market manipulation regarding the price for shares in Healthzone Ltd (Healthzone), contrary to s 11.5 Criminal Code (Cth) (the Criminal Code) and ss 1041A and 1311(1) Corporations Act 2001 (Cth) (the Corporations Act). 2. Ge (also known as Michael) Wu (Wu), Robert Venour Dulhunty (Dulhunty) and Peter Roach (Roach) (together, the Offenders) were directors of Healthzone. The Offenders agreed to create or maintain an artificial price for shares in Healthzone, from time to time, as required, to support the corporate activities of Healthzone (the agreement). 3. The conspiracy commenced around six months after Healthzone became a publicly listed entity on the Australian Securities Exchange (the ASX) on 6 November 2006 and ended when Healthzone was placed in external administration on 17 November 2011. 4. After Healthzone was placed in administration, ASIC obtained a copy of the Healthzone email server, which contained extensive written communication documenting the involvement of the Offenders in the conspiracy. 5. In summary: • Between around 1 May 2007 and around 30 October 2008, Wu and Dulhunty used five trading accounts to carry out 142 trades, involving the purchase of 456,501 shares and an overall investment of $236,629 (the First Period of Offending). • Between around 10 November 2008 and around 25 June 2010, Wu, Dulhunty and Roach used eight of their own trading accounts, and used or requested third parties to operate a further 10 trading accounts, including by giving trading instructions to those persons. In total, there were 235 trades, involving the purchase of 1,340,923 shares and an overall investment of $442,846 (the Second Period of Offending). • Between around 9 August 2010 and 17 November 2011, Wu and Roach used or requested third parties to operate six trading accounts, including by giving trading instructions to those persons. In total, there were 260 trades, involving the purchase of 2,101,654 shares and an overall investment of $711,122 (the Third Period of Offending). 6. A summary of all trades conducted in furtherance of the conspiracy is set out in Annexure A, and a summary of the volume of shares traded and overall investment is set out in Annexure B. 7. In total, there were 637 trades, involving the purchase of 3,899,078 shares and an overall investment of $1,390,597. HEALTHZONE LIMITED 8. Healthzone, incorporated on 8 March 2006 and originally known as Natural Health and Beauty Limited, was an Australian company engaged in the distribution and sale of various health products. 9. Between 6 November 2006 and 17 November 2011, following an Initial Public Offering (IPO), Healthzone shares were publicly listed and traded on the ASX under the code "HZL". 10. As part of the IPO, Healthzone issued a prospectus on 21 September 2006 for an offering of 8,000,000 shares at $0.50 per share. The new shares were to rank equally with 22,923,469 shares already issued. 11. Prior to the IPO, the largest shareholders of the 22,923,469 existing shares in Healthzone were: • Wu: 9,948,968 shares (43.4%). • Guoguang Tao (the Head of China markets): 8,158,154 shares (35.6%). • Dulhunty's company Development Capital Corporation Pty Ltd (DCC): 1,790,173 shares (7.8%). 12. Each of these shareholders held more than 5% of the issued share capital and were therefore "substantial shareholders" and subject to certain disclosure requirements in relation to changes to their shareholdings. 13. Dulhunty and numerous family members also personally held a small number of existing shares (in total approximately 50,000 shares). 14. As part of the IPO, the ASX Listing Rules required at least 400 shareholders holding a parcel of securities with a value of at least $2,000 as a condition of admission to the official list. Email correspondence between Dulhunty and Wu referred to difficulties in attaining the minimum shareholder number (or "spread") during the IPO period. 15. Accordingly, a large number of Wu's associates and family members subscribed to the Healthzone IPO, including both Wei Wang and Huanzhong Wang, referred to in more detail below. 16. The IPO was managed and underwritten by Intersuisse Ltd (Intersuisse). Andrew Sekely worked for Intersuisse during the First, Second and Third Periods of Offending and, as the broker for Wu, Wei Wang and DCC, was referred to in various communications between the Offenders. 17. After the IPO, Healthzone on two occasions conducted acquisitions of businesses and companies where the purchase was partly funded through the issue of Healthzone shares to the vendors. Healthzone acquired Health Minders Pty Ltd (HMPL) in October 2007 and Jasham International Pty Limited in June 2008. Healthzone had the election to pay 14% of the purchase price by cash or shares. Shares were issued to vendors based on the performance of the businesses and long term weighted average price of Healthzone shares after the businesses were acquired. 18. Healthzone shares were infrequently traded and illiquid stock, and accordingly small trades could cause price movements upwards or downwards. From time to time, the price for Healthzone shares faced downward pressure from selling shareholders. 19. At various times between late 2007 and mid-2010, the Offenders referred to a belief that one such investor in particular, Russell Goodman (Goodman), was exerting downward pressure on the Healthzone share price by placing Sell orders for improper purposes. 20. [Repeat of paragraph 19]. THE OFFENDERS Wu 21. Wu was one of the founding directors of Healthzone and held that office until Healthzone was placed in external administration on 17 November 2011. 22. Wu has a Bachelor of Commerce and a Masters of Commerce from the University of Western Sydney. He was a justice of the peace between 7 January 2009 and 6 January 2014. According to the Healthzone annual report, he was a member of the Australian Institute of Company Directors. He was also a director of a number of Australian companies, including MGR International Pty Limited (MGR), which was incorporated on 8 April 2004 and received consultancy fees for services it provided to Healthzone. According to the Healthzone annual reports, Wu received remuneration that included an annual salary of $60,000 over the 2007-2011 financial years. He was also entitled to bonus payments. 23. On 12 June 2009, Wu opened a share trading account with Hub 24 in the name of MGR. Wu was the only person authorised to trade on that account. 24. Wu also operated an Intersuisse trading account, in his name, which at various times was number 163116, 84838 and N84838. Wu lodged forms with the ASX disclosing trading in his own name. 25. As at 17 November 2011, Wu's shareholding in Healthzone was in the order of 8.5% of the issued share capital. Roach 26. Roach became a director of Healthzone on 4 May 2007. He was appointed the Executive Chairman on 1 November 2007, the Managing Director on 1 January 2008, and the Executive Chairman and Chief Executive Officer on 1 July 2010. He held those offices until Healthzone was placed in external administration on 17 November 2011. According to the Healthzone annual reports, Roach received remuneration that included a salary and consultancy fees, amounting to $1,195,674 over the 2007-2011 financial years. He was also entitled to bonus payments, as well as allotments of shares and options. 27. According to the Healthzone 2007 Annual Report, Roach was a member of the Australian Institute of Company Directors. Prior to his appointment to the board of Healthzone, Roach had more than 20 years' experience in the Australian health food industry and had been a director of a number of private Australian companies. Roach had no previous experience managing or being on the board of a publicly listed Australian company. 28. Roach operated an ETrade trading account, in his name, which was number 3201093, opened on 26 May 2009. Roach lodged forms with the ASX disclosing trading in his own name. Dulhunty 29. Dulhunty is the sole director and secretary of DCC, a company providing corporate finance and advisory services and which in 2006 became a consultant to Healthzone. From 22 November 2002, DCC held an Australian Financial Services Licence, number 221667. 30. Dulhunty was a lecturer in corporate finance for the Masters of Finance Program at the University of Technology Sydney. He was also a Chartered Accountant, a member of the Australian Institute of Company Directors, and has a Masters of Business Administration, a Bachelor of Laws with Honours and a Bachelor of Commerce. 31. Through DCC, Dulhunty was engaged by Healthzone for its IPO and continued as a consultant in relation to its capital raising and business acquisition activities. Following the IPO, DCC was one of the largest shareholders in Healthzone, with 1,790,173 shares (7.8%). 32. DCC received fees from Healthzone based on a percentage of funds raised or a percentage of the value of successful acquisitions. The DCC Capital Raising Mandate (relating to work performed on capital raisings pursued by Healthzone in 2010) set out a weekly fee of $5,000 and a net structuring fee of 2% of all funds raised together with out of pocket expenses. The DCC Business Acquisitions Mandate (relating to work carried out in relation to the various business acquisitions made by Healthzone) also specified a weekly fee of $5,000 and a structuring fee of 7.5% of the total consideration paid. DCC invoiced Healthzone as follows: $771,375 in 2007 in relation to the acquisition of HMPL, $418,000 in 2008 in relation to the acquisition of Jasham International Pty Limited, $220,000 in 2009 in respect to Part B consideration to HMPL and a total of $346,500 in relation to various capital raisings in 2010. 33. Dulhunty became a director of Healthzone on 4 May 2007 and held that office until 27 March 2009. He continued his business association with Healthzone and its directors until around the middle of 2010. He ceased his involvement with Healthzone after a dispute with the company. DCC subsequently claimed to have not received payment from Healthzone in respect of some structuring fees and further that it had voluntarily paid more than $100,000 of its own money for legal and accounting fees on behalf of Healthzone, waived more than $200,000 of fees that it was entitled to, and agreed to a settlement discount of $280,000 in relation to fees due from 2009 and 2010. 34. Dulhunty operated a number of trading accounts in his name and that of his company, DCC, including a Commonwealth Securities Limited (CommSec) trading account number 487298 in his own name and for which he was the only person authorised to trade. 35. DCC had various trading accounts which included: Novus Capital Limited (Novus) account number 123489; Tricom Equities Limited (Tricom) account which at various times had number 24576/143414; an Intersuisse account which at various times had number 163137/84860/N84860 and a CommSec account number 4243736. Dulhunty was the only person authorised to trade on the DCC trading accounts. Contrary to ASX requirements, other than an initial notice of director's interests, Dulhunty never lodged any form as a director of Healthzone disclosing that he, either personally or through entities he controlled, had purchased or sold Healthzone shares. OTHER RELEVANT PERSONS 36. The following persons, or their share trading accounts, were used by the Offenders in furtherance of the conspiracy. Wei Wang 37. Wei Wang is a cousin of Wu. A trading account which at various times was numbered 163185, 84907 and N84907 was set up in his name with Intersuisse in 2006 and used to trade in Healthzone shares (the Wang Intersuisse Account). Only Wei Wang was authorised to trade on this account. Huanzhong Wang 38. Huanzhong Wang was a founding director of Healthzone until he resigned on 15 July 2006. A CommSec trading account number 2285829 in the name of Huanzhong Wang was used to trade in Healthzone shares. Michael Jenkins 39. Michael Jenkins (Jenkins) (also referred to in emails as "MJ2") was employed by Healthzone from 2008 to 2011, initially as the Chief Financial Officer (CFO) and Company Secretary. In August 2009 he became a director of Healthzone, until he resigned in November 2010. Jenkins then reverted to being the CFO and Company Secretary until he left Healthzone in March 2011. 40. On 24 August 2007 Jenkins opened a CommSec online trading account in the name of Mrs Yvonne Jenkins and Mr Michael Jenkins, account number 2299724 (the Jenkins CommSec Account). Bernard Tynas 41. Bernard Tynas (Tynas) (referred to in emails as "BT", "Mr X" and "Bernie") worked at Healthzone from 2005 to 2007 as a General Manager for Retail. 42. On 14 January 1998, Tynas opened a share trading account with CommSec, account number 140534, and was the only person authorized to place trades on the account (the Tynas CommSec Account). Mary Ann Harper and Andrew Harper 43. Mary Ann Elizabeth Harper (Mary Ann Harper) is Roach's sister. Her husband is Andrew John Harper (Andrew Harper). 44. On 11 December 1999, Mary Ann Harper had opened a CommSec share trading account, number 493362 (the Harper CommSec Account) (also referred to in emails as the "Mary Account"). CommSec closed the Harper CommSec Account on 18 March 2010. Healthzone shares held in this this account were transferred to the Vringer ETrade Account in January 2011. Ellen Vringer and Adrian Vringer 45. Ellen Vringer was Roach's Personal Assistant for 11 years. Her husband is Adrian Vringer. 46. On or about 20 January 2010, Adrian Vringer opened a CommSec share trading account, number 4326142 (the Vringer Commsec Account). This account was closed on 28 May 2010. 47. On 11 May 2010, Adrian Vringer opened a share trading account with ETrade Account, number 4362043 (the Vringer ETrade Account). Both the CommSec and ETrade Accounts were referred to in emails as the "Trumpy Account". Brett Pattinson and Lorena Sigala 48. Brett Pattinson (Pattinson) (also referred to in emails as "BP" and "Z") owned a company called BOD, which was taken over by Healthzone in 2006 before the IPO. Pattinson's wife is Lorena Sigala. 49. Pattinson went to work for Healthzone as a contractor to oversee the BOD brand from 2006 to 2010. 50. Pattinson traded on a Macquarie Equities share account in the name of his wife and purchased Healthzone shares on this account. He also asked a friend, Perry Andronos to purchase Healthzone shares on his behalf. Perry Andronos 51. Perry Andronos (Andronos) was a friend of Pattinson's for over 30 years. On 23 May 1997, Andronos opened a CommSec share trading account number 97035 (the Andronos CommSec Account). Andronos purchased Healthzone shares on this account in accordance with Pattinson's instructions. Dennis Limbert 52. Dennis Limbert (Limbert) (also referred to in emails as "DL" and "Dennis") was employed by Healthzone as a Marketing Communications Manager from 2007 to 2012. 53. On 20 April 2010 Limbert opened a CommSec share trading account number 4343318 (the Limbert CommSec Account) and purchased Healthzone shares through this account. Matthew Jinks 54. Matthew Jinks (Jinks) (also referred to in the emails as "MJ1") was an employee of Healthzone and looked after warehousing and suppliers from 2008 to 2011. 55. On 20 April 2010 Jinks opened a CommSec share trading account number 4341683 in the name of his wife Shiona Heather Frame (the Frame CommSec Account) and purchased Healthzone shares on this account. FIRST PERIOD OF OFFENDING, MAY 2007-OCTOBER 2008: WU AND DULHUNTY Overview 56. In the First Period of Offending, Wu and Dulhunty took action whenever they deemed it necessary to create or maintain an artificial price for Healthzone shares at a level they believed was required in the circumstances. They regularly monitored the price for Healthzone shares as listed on the ASX, often on a daily basis. 57. Wu and Dulhunty communicated with each other, first to inform the other of or to discuss the status of the current share price, and then to agree upon a strategy or plan for trading with the intention of creating or maintaining the price for Healthzone shares at an artificial level. 58. Once Wu and Dulhunty agreed upon a strategy, they would seek to ensure that the necessary trading in Healthzone shares occurred in order to create or maintain the artificial price. The trading was conducted by Dulhunty through his own trading accounts or through his DCC accounts and by Wu operating third party accounts or asking family members to trade based on his instructions. 59. Once the various instructions to buy Healthzone shares were executed, they often had the effect of creating or maintaining an artificial price for Healthzone shares, as intended by Wu and Dulhunty. On other occasions, despite their actions, the share price fell or stayed the same. The pair monitored the effects of their trades and kept in communication with each other so that each was aware of the fact that the planned trading occurred and whether the price moved towards or had reached the desired level. 60. On a number of occasions, Wu and Dulhunty sought to create or maintain an artificial price for Healthzone shares after a "positive" ASX announcement, for example on 8 October 2007 (HMPL acquisition), 31 October 2007 (Appendix 4C Quarterly Report), 1 November 2007 (Roach appointed as Executive Chairman), 13 November 2007 (Integration and growth update), 27 November 2007 (following reinstatement and announcement of $6 million placement), and 19 December 2007 (acquisition of Atherton International). 61. Throughout the First Period of Offending from May 2007 to October 2008 there were 142 trades conducted pursuant to the agreement, as follows: • Dulhunty used three trading accounts in his name or in the name his company DCC to execute 102 trades, involving the purchase of 370,000 shares and an overall investment of $162,382. • Wu used, or asked family members to use, by providing trading instructions, two trading accounts in the names of Wei Wang and Huanzhong Wang. There were a total of 40 trades, involving the purchase of 149,501 shares and an overall investment of $74,248. 62. Examples of the communications and trading for this period are set out below. 5 to 8 May 2007 63. Between 1 January 2007 and 3 May 2007, the price of Healthzone shares dropped from a closing price of 65 cents to a closing price of 34 cents. On 5 May 2007, Dulhunty sent an email to Wu setting out reasons why they should get the price of Healthzone shares up on Monday after a number of company announcements: "We need to get the share price up straight away on Monday in order to: * Make the purchase of DS shares at 50c easy for you * Build momentum quickly upwards (versus downwards) * Give NAB comfort * Boost value of shares for potential scrip / mixed scrip acquisitions (MIA, HMPL, Cronulla, more Wild Food) * Shares to be 50c within 3 weeks for roadshows * Once shares are 50c, then HZL can use media * Provide strong defence to any DS potential actions - evidence that the shares dropped with him and spiked upon DS resignation * Show DS how he harmed the company to discourage DS = as above * Make my discussions with Intersuisse from late Monday very easy and very compelling for them to get behind HZL and create a market There's very good reasons for people we know to buy shares on Monday (after the Wild Food and GVR announcements are posted at 9am on Monday) * Per the last interim announcement, the FY07 forecast is at the higher end of the range (i.e. $1.9m) * The intrinsic value of shares at a 10x to 12x PE (still big discount to 16x market) is 60c to 70c (January price) * 3 positive announcements on Monday * Roadshows to core brokers to commence in 2-3 weeks * Hotel ball room roadshows (1 Sydney / 1 Melbourne) to all brokers and institutions in 6-8 weeks * Media when shares above 50c * There will never be a better buying opportunity * For HZL staff and associates, will support growth I think we can drum up $70k to $130k buying support as follows: Low High DCC $10,000 $20,000 - Me DCC family $10,000 $15,000 - Me Wu $10,000 $20,000 - You Wu family $10,000 $15,000 - You Tynas $4,000 $8,000 - Me Roach $10,000 $20,000 (use proceeds of $75k) - Me Pattinson $3,000 $6,000 - Me Dare $3,000 $6,000 - Me Tao $10,000 $20,000 - You Other MW to advise Inside info: * As long as we stick to the fundamentals outlined above, there are no issues with inside buying * There will be regular announcements (fortnightly) which will enable people to sell shares immediately after announcements Next * What do you think? * If OK, I will start drumming up people on my side to buy shares after the Monday announcements * If OK, you start drumming up people on your side to buy shares after Monday announcements * Hopefully, shares will get to 50c within 2 weeks" 64. Wu agreed. They then exchanged emails regarding the amount of money they could provide to support the Healthzone share price. On 6 May 2007, Wu sent an email to Dulhunty saying that he had limited cash available to trade. Dulhunty sent an email to Wu, stating: "Me too, but if we can execute 'buy' at Monday price and 'sell' at 50c, the cash should be coming back soon. WE should be doing announcements every couple of weeks so I'm hoping we will be able to sell soon. If the price goes above 50c, then will alleviate your obligation to find cash for DS shares. See what you can do. The more we do on Monday, the better for the company. If we can get some early momentum, then we should be able to get Intersuisse, Sheng Ong and others to keep the price going up...but wil need some early fast movement on Monday. PS: you better send me your account details so I can transfer the cash" Later that day, Dulhunty sent an email to Wu in which he set out what he proposed to tell Andrew Sekely of Intersuisse about purchasing HZL shares. Wu replied: "I think this looks alright but we have to make sure AS won't have a feeling that we are buying shares just because we want to lift up the price to maintain a steady trend...we need him to believe we will have lots of excited news/acquisitions happening down the track." 65. On 7 and 8 May 2007, Dulhunty purchased Healthzone shares using his DCC accounts with Intersuisse and Tricom and his CommSec Account, causing the share price to rise on 7 May from 34c to 43c, and on 8 May from 43c to 44c, in trades having a total value of approximately $25,745. 26 to 27 July 2007 66. On 26 July 2007, the price of Healthzone shares dropped from a previous closing price of 45 cents to 38 cents. 67. During the day, Dulhunty and Wu corresponded by email about increasing the Healthzone share price, with Dulhunty stating at 10.08am: "Know anyone that could buy 1000-2000 shares at 46c?" and Wu responding: "Bernie?...joking…A bit hard because the guy I know went to Ski". After the close of trading, Dulhunty noted "Shares down 7c to 38c - not a good look" and advised: "Need someone to start the shares on a positive note to calm HMPL". Wu replied: "You didn't see this. Already arranged the support for 45c as an opening price!!...But he's not sure if he can be in front of computer at closed to 4pm as he'll be tied up from 1pm." Wu and Dulhunty exchanged emails discussing arranging support for the close at 4pm, but they were not involved in any trades on that day. 68. On 27 July 2007, Wu sent an email to Dulhunty, stating: "My mate actually bought 2000 shares today........", confirming a trade made on a CommSec Account in the name of Huanzhong Wang which had increased the price of Healthzone shares from 38c to 41c. After this, more shares were sold by other shareholders at 38 cents and the closing price of 38 cents was 7 cents below the previous closing price of 45 cents on 26 July 2007. 8 to 9 October 2007 69. On 8 October 2007, Healthzone announced the completion of its acquisition of HMPL. 70. On 9 October Dulhunty sent out emails to Wu and others trying to find out who was selling 10,000 shares at 46c, but was not able to find out. 71. At 10:31, Dulhunty placed a Bid for 2,000 shares at 49c on his CommSec Account. It traded immediately and in full, increasing the price of Healthzone shares from 46c to 49c. 72. At 11:50 Dulhunty sent an email to Wu with the subject "See below: 294,000 shares today: price now 45c (down 4c). Not too bad, not too good. Will buy some to get price to 49c." 73. At 12:01, after a price fall, Dulhunty placed another Bid for 2,000 Healthzone shares at 49c on his CommSec Account. It traded immediately and in full, increasing the price of Healthzone shares from 45c to 49c, restoring the price to 49c. The trade set the closing price for Healthzone shares at 49c, which was the same as the closing price on the previous day. 74. There was no further trading in Healthzone shares after 12:01, but Dulhunty and Wu continued to watch the market and corresponded by email about Dulhunty's trade and the lack of actual volume in Healthzone shares. 75. In the evening, Goodman sent an email to Wu in which he made his first approach to Healthzone, offering to market its shares to his network of investors. He also asked if Healthzone's major shareholders were interested in selling their shares. Dulhunty then engaged in discussions with Goodman on behalf of Healthzone. In November 2007, Goodman said that 10 million new Healthzone shares could be placed with his network at a price ranging from 60c to 75c per share. The Offenders resolved to issue 10 million shares to Goodman and his investors at 60c per share, which occurred in December 2007. Goodman also encouraged the Offenders to buy shares to prove their confidence in Healthzone. 19 December 2007 to 16 January 2008 76. On 19 December 2007 at 9:22, Healthzone announced the acquisition of Atherton International Pty Limited. At 9.45am Dulhunty sent an email to Wu and Roach and said: "RG called AGAIN this morning … Asked AGAIN if we are buying shares today." At 11.38am, Dulhunty sent an email to Wu and Roach and said: "Can you guys buy some shares today? RG has been hassling for 2 weeks". 77. On 21 December 2007, the previous closing price of Healthzone shares was 70 cents and the opening trade was 66 cents. Dulhunty sent an email to Wu and said: "Share trading should be very light over the next few days. We might want to consider getting in and buying some shares with light volume to get price closer to 75c. Would be good to get it up before 31 Dec for half year accounts + AFR tables." 78. Dulhunty traded on his CommSec Account and increased the price for Healthzone shares from 66c to 70c and set the closing price, which was the same as the closing price on the previous day. 79. At 15:31, although Wu replied to Dulhunty's email "Ok, happy to buy some over the next few days", it was Dulhunty who did the trading on his CommSec Account and told Wu to keep an eye on the share price. 80. On 24 December, the previous closing price of Healthzone shares was 70 cents. There were 30,000 shares sold at 60 cents. According to a subsequent analysis of trading data, the seller was an investor who was part of Goodman's initial placement of shares, but Dulhunty and Wu were not aware of that fact at the time and did not refer to any belief at the time that the trade was associated with Goodman. There is no evidence that the investor colluded with Goodman in relation to the sale. At this time the communications between Goodman and the Offenders indicated a positive relationship and that Goodman was buying shares in Healthzone. Dulhunty entered two Bids on his CommSec Account, which traded in three lots and increased the price of Healthzone shares from 60c to 70c and then from 72c to 73c. Market participants bought 143,000 shares at prices from 70c to 73c. 81. In an email dated Sunday 23 December Dulhunty told Wu: "Been doing some buying....now 73c." On 3 January 2008, Dulhunty and Wu discussed further trades to raise the share price to 79 cents. Dulhunty stated: "Now just 9,000 shares will do it" and asked Wu when he would be buying shares. Wu replied: "I don't use my a/c to buy but my mate who has been instructed by me. Will follow up with him now". On 16 January 2008, Dulhunty and Wu discussed who could be used for a further purchase of Healthzone shares, with Dulhunty stating to Wu: "UP to you. If BT, then make sure he keeps his mouth shut". 11 February to 4 March 2008 82. On 11 February 2008, Dulhunty sent an email to Wu with the subject "Need some volume through HZL", stating: "3-4 days a week until the shares flow by themselves. If there is no activity, people will dump…whether good news or bad news….just to get out". Wu replied: "OK. Will try to support say up to 3 weeks (ie. 20k shares/week) but somehow can I receive some reasonable reimbursement as: during the last 6 months, I've been asked my mates to purchase the shares (for me but under different titles) and I've a large bill due to them and need to pay soon ($120k) just for these shares purchased in the past". On 28 February 2008, Dulhunty sent an email to Wu stating: "Need to have buyers/volume lined up for Monday morning = first momentum after announcement Will need to work on it over weekend. We will also be able to buy directly then". Wu replied: "I have been buying indirectly although not much. How many required for today? On blackberry". On 29 February 2008 Healthzone released its half yearly results. On 2 March, a Sunday, Dulhunty sent an email to Wu and said: "We'll need to support shares tomorrow. I plan to directly commit $5k to $10k How much can your people commit? Target = price of 65c (no less) to 70c (no more)" 83. Later Dulhunty sent details of the current sells to Wu, stating: "Current sells are at: 0.640 2,000 0.690 11,000 0.700 10,000 0.850 32,338 I will get in early with 3000 shares to get price to 0.69.You will then need to do around 1,000 shares an hour in the 69 to 70 range (i.e. 6,000 shares). Day 1 after announcement is most important. Keep rest of ammo until the end of the day + tomorrow." 84. Wu replied to Dulhunty's email, stating: "OK, will keep an eye on and standby all day tomorrow." At 7.21pm, Dulhunty separately sent an email to Roach (who was not yet an offender), stating: "Are you able to buy $5k to $10k of HZL shares tomorrow? Day 1 after half year profit important to set momentum of the shares. If positive, then interpreted positively. Also, do you think that MB and CF would be willing to buy some shares over time with their pay rises? You'd think so and people like RG would expect management to want shares." 85. On 3 March, the previous closing price was 64c. At 8.56am, Dulhunty sent an email to Wu, stating: "Seller profile has changed to the following: 0.640 18,544 0.650 8,120 0.690 11,000 Suggestions: - I buy 2,000 at 64 - you buy 1,000 each hour from 11am at market ONLY if price is 64 or more - don't buy any below 64 - I do the closing bid at 3.50pm." 86. Wu responded: "Ok". At 8.59am, Dulhunty sent an email to Wu, stating: "Put in an open bid now for 3000 shares before market at 64c I have done one at 65c". At 9.03am, Dulhunty sent an email to Roach, stating: "Any chance of putting in a pre-market bid order with your broker for say 2,000 to 10,000 shares at 65c. Would be ideal to have order on screen asap before market opens." At 9:27am, Roach responded: "I have a Sanford account. I have just been redirected to Commsec and my ID is not working and can't access my account. Problem has been logged however can't lodge a premarket bid unless fixed before 10am. Unlikely as they say there has been much issue with Sanford customers and I may have to re-register Commsec." 87. Later that day, Dulhunty sent an email to Roach titled "shares down", and asked: "Was there anything that RG said/indicated relevant to this?" Roach reported on a conversation with Goodman about his concerns for the operation of Healthzone and seeking more involvement in the company. Dulhunty responded: "Looks like he's keen to find a life boat / exit. Might be better to keep RG stuck in HZL with no way out. If he is half out, then could burn price. If stuck, then will do what he can to make shares stay up." 88. During the course of the day Dulhunty and Wu exchanged emails about when to trade. 89. Dulhunty placed Bids on his CommSec and DCC's Tricom Accounts and there were also Bids placed on the Wang Intersuisse Account, following phone calls by Wu to Intersuisse, which traded at 10:04 at 64c. After a price decrease to 60c, Dulhunty traded again on his CommSec Account with a Bid for 2,000 Healthzone shares at 64c which traded immediately and increased the price of Healthzone shares to 62c. 90. Within twenty minutes of another price decrease to 60c, Dulhunty entered another Bid for 1,000 Healthzone shares at 64c on his CommSec Account. The Bid traded immediately and in full through two price levels of orders increasing the price again from 60c to 62c. The trade set the close at 62c, which was 2c below the previous closing price. 91. After this trading Dulhunty sent an email to Wu with details of his monitoring of the Healthzone share price including: "Just got some more to keep up at 62c. Need to keep eye on shares"; and "Can you give me a call on 3:30pm to see what actions (how many shares) is needed as I'm not online at the moment." 92. At the close Dulhunty sent an email to Wu telling him to "save his bullets" for tomorrow. According to a subsequent analysis of trading data, one of the sellers during the day was an investor who was part of Goodman's initial placement of shares, but Dulhunty and Wu were not aware of that fact at the time and did not express a belief at the time that Goodman was responsible for the trade. There is no evidence that the seller colluded with Goodman in relation to the sale. At 4.16pm, Wu sent an email to Roach and Dulhunty, stating: "Are you guys happy for me to call Han Lee? RG is concerned he will start selling down and says he is big on relationship and a puppy with his questions". Roach reported on a conversation with Han Lee, to which Dulhunty replied: "Nice work …and very funny Maybe RG needs you as a front man to build his own credibility At least our shares are still above IPO issue price + placement price despite massive share market crash Wouldn't be the same for many other companies Need to be careful of RG. Will be seeking to exert pressure to suit his needs (i.e. not issue shares), which may be inconsistent with best interests of HZL". 93. On 4 March Dulhunty sent Wu an email and told him: "Put in opening order asap for 2000 shares at 62c before sellers drop price". 94. Wu made a call to the broker Intersuisse and approximately 20 minutes later a Bid for 2,000 Healthzone shares at 62c was entered on the Wang Intersuisse Account. The Bid traded at 10:04 and decreased the price of Healthzone shares from 62c to 61.5c, due to the entry of a late Ask. 95. At 11.46am, Dulhunty sent an email to Wu, stating: "6000 at 62 would be good To prevent sell orders dropping to 60". Wu replied "Will get my mate to get in now" and then reported "Instructed my mate to buy 6000". At 1.15pm, Dulhunty noted "Hasn't happened...can you go direct?" Wu replied: "Done..." and six minutes later a Bid was entered on the Wang Intersuisse Account for 6,000 Healthzone shares at 62c, which traded in full through two price levels, increasing the price for Healthzone shares from 61.5c to 62c. The trade set the close and the price of Healthzone shares closed at the previous closing price of 62c. 23 to 24 April 2008 96. On 22 April 2008, the closing price of Healthzone shares dropped from 53c to 46.5c. 97. The next day, Wu sent an email to Dulhunty saying: "I've been watching the shares today though without action yet. How many are needed to bring it back to say 55c?....Will consider this tomorrow or a better timing?...." 98. The lowest Ask was for 500 shares at 55c, which was 3.5c below the next lowest ask of 58.5c. At 15:10 Dulhunty traded on his DCC Tricom Account with a Bid for 500 Healthzone shares at 55c which increased the price for Healthzone shares from 46.5c to 55c. The trade set the close. Dulhunty sent an email to Wu which said: "Currently 55c with 500 shares volume" and included details of the next Asks: "Next shares - 6000 at 58.5c - 9370 at 59c - 10,104 at 59.5c". Wu replied "Better …I will see what I can do." 99. On 24 April the Wang Intersuisse Account placed a Bid for 1,000 Healthzone shares at 58.5c which traded, increasing the price for Healthzone shares (set by Dulhunty the previous day) from 55c to 58.5c. The trade set the close. 100. Wu confirmed the trade on the Wang Intersuisse Account by sending an email to Dulhunty with the subject "1000 shares ordered at 58.5c" and Dulhunty replied: "Good, has gone through". 25 June to 3 July 2008 101. On 25 June 2008, at 8:22am, Dulhunty sent an email to Wu, stating: "Although the closing price of HZL shares was 50c yesterday, the opening bid if 45c and opening offer (5,000 shares) is 46c. Will need to have at least 5,000 shares ready to clear out the opening offer if someone hits the price. Suggest wait until offer is hit before buying up the shares. At 50c, whoever buys the shares today should do pretty well." The price of Healthzone shares dropped from the previous close of 50c to 45c, then 42c. Dulhunty sent an email to Wu and said: "HZL price getting slammed + getting calls from RG mates". Wu asked "How many required to take it back?" 102. The lowest Ask was for 2,000 shares at 50c. Dulhunty replied with details of Healthzone share sells and suggested putting in an order at 3.50 pm. At 15:49 the Wang Intersuisse Account entered a Bid for 2,000 Healthzone shares at 50c which traded, increasing the price for Healthzone shares from 42c to 50c. This trade set the close and the price of Healthzone shares closed at the previous closing price of 50c. 103. Dulhunty sent an email to Wu which said: "closing price 50c." 104. On 26 June Dulhunty sent an email to Wu that said:"50c held as no trading." 105. On 27 June Healthzone requested a trading halt and Dulhunty sent an email to Wu "All done". 106. On 30 June 2008 Healthzone announced the completion of contracts for the acquisition of Jasham International Pty Limited. 107. Following the announcement, 4,000 shares were sold at 54c and 31,902 shares were bought, raising the price to 56.5c. According to a subsequent analysis of trading data, the seller was Goodman, but Dulhunty and Wu were not aware of that fact at the time and did not express a belief at the time that Goodman was responsible for the trade. Dulhunty sent an email to Wu and Roach saying: "shares up 13% to 56.5c Lowest sell orders are below Would be good to see at least 60c (and more) by 4pm" and sent an email to Wu separately which said: "See below, there's a small batch of 6,400 HZL shares for sale at 56.5c before getting to 57c level Are you able to buy some within 20 mins or do you want me to? Price Quantity Number 0.565 6,401 2 0.570 30,000 1 0.600 52,000 1 0.700 10,000 1" 108. Wu replied that he was in a meeting. Dulhunty entered a Bid on his DCC Tricom Account for 7,000 Healthzone shares at market which traded and cleared all 6,400 Healthzone shares on offer at 56.5c and the residual was amended to 60c which also traded. This increased the price for Healthzone shares from 56.5c to 60c and set the close. Dulhunty sent an email to Wu with details of the trade and said: "Just got 7,000 = price now 60c. Keep an eye on it until 4pm. If dips, be prepared to come in to hold 30 June close price at 60c. Important for published year end summaries etc" 109. Later Dulhunty sent Wu an email which confirmed the close at 60c, identified the current lowest sell orders and stated: "Hopefully will be support tomorrow as media / investors find out. We should aim for conducting roadshows in 3-4 weeks, subject to PC having numbers that we are confident about". 110. On 1 July 2008, 10,000 shares were sold at 52.5c, and the price of Healthzone shares dropped from 60c to 52.5c. According to a subsequent analysis of trading data, the seller was Goodman, but Dulhunty and Wu were not aware of that fact at the time and did not express a belief at the time that Goodman was responsible for the trade. On the evening of 1 July Dulhunty sent an email to Wu that said the price of Healthzone shares was back down to 52.5c. 111. On 3 July Dulhunty sent an email to Wu and Roach, stating: "Lowest HZL sell prices are per below. Buying 5,000 at market could get the price back up to 60c". Then Wu and Dulhunty exchanged emails, with Wu stating: "Couldn't work with bberry just now...is it too late to jump in now? If not, I will ring and buy". Dulhunty replied "Same now .,.get them if can". Wu made a phone call to Intersuisse and five minutes after the call at 12:09 the Wang Intersuisse Account placed a Bid for 5,000 Healthzone shares at 60c which traded through two price levels increasing the price of Healthzone shares by 7.5c from 52.5c to 60c. This trade set the close. 112. Wu and Dulhunty exchanged emails about the trade and the closing price of 60c for Healthzone shares. 1 to 23 September 2008 113. On 31 July 2008, Wu and Dulhunty reported to each other and Roach on conversations they had with Goodman, in which he complained of a lack of consultation in relation to the company and warned of possible sell orders at low prices as a result. On 1 August 2008, Goodman suggested that Healthzone attend a meeting with the parent company of Athletes Foot to discuss a possible merger as they were both franchise businesses. Goodman arranged a meeting between the companies, but on 13 August 2008 Roach sent an email to Dulhunty and Wu, noting: "RG idea is that the proposed new entity would become a Franchise Super Group with the logistics provided by the HZL Group… I remain cautious of RG motivation and could be a scam to get him & others into HZL business detail - Big waste of time. What do you guys thinks? Are you available to meet?" 114. By September 2008, the relationship between Healthzone and Goodman had begun to deteriorate. On 1 September 2008, the price of Healthzone shares dropped from 53c to 36c. The previous day, Dulhunty had sent an email to Wu and Roach, expressing his concern that Goodman was intending to place sell orders at a low price. 115. On 2 September, Goodman sent an email to the Offenders, setting out his concerns with the management of Healthzone, asking for a board seat, suggesting the company should consider merging with Athletes Foot and encouraging the directors of Healthzone to buy shares. On 10 September, the price of Healthzone shares dropped from 42c to 36c. That day, Goodman sent an email to Dulhunty in which he predicted that the share price would drop to 16c by October and that there would then be a takeover bid at 25c. According to a subsequent analysis of trading data, one of the sellers during the day was an investor who was part of Goodman's initial placement of shares, but Dulhunty and Wu were not aware of that fact at the time and did not express a belief at the time that Goodman was responsible for the trade. There is no evidence that the seller colluded with Goodman in relation to the sale. 116. On 22 September 2008, the previous closing price was 52c, as a result of four trades on 11-12 September by Dulhunty's company DCC and the Wang Intersuisse account. Dulhunty sent an email to Wu saying: "Good time to buy HZL shares. Market scared shitless, no activity and ASX restrictions on selling. How about you buy 10,000 shares and I buy 10,000 shares? Would get price up to 55c and people are reluctant to sell now. Would need to be done quickly (i.e. same time) with tight co-ordination between us." 117. Wu replied he was in a meeting. Dulhunty replied "Just let me know when you're free Timing is up to us… but needs to be at same time", but they did not buy shares that day. 118. The price of Asks dropped to 49c. The following day Dulhunty sent an email to Wu which again stated they needed to co-ordinate buying 10,000 shares which included: "When are you ready to buy 10,000 shares soon? Let's co-ordinate." Wu made a call to Intersuisse and approximately three minutes later at 12:05 the Wang Intersuisse Account placed a Bid for 12,000 Healthzone shares at 51.5c which traded through two price levels, but decreased the price by half a cent. At 12:08 Dulhunty traded on his DCC Tricom Account and placed a Bid for 12,000 Healthzone shares at 55c which traded through three price levels, increasing the price of Healthzone shares from 51.5c to 55c. This trade set the close. Dulhunty sent an email to Wu: "Price 55c" and Wu replied: "Done Mine." 1 to 30 October 2008 119. On 1 October 2008, Goodman sent an email to the Offenders in which he expressed dissatisfaction with the management of Healthzone and asked for a board seat by 3 October in order to have a say in the direction of the company, otherwise he would divest his stock holdings in Healthzone. On 3 October, the previous closing price was 55c and Goodman placed 1 million shares for sale on market, at a price of 42c. Dulhunty sent an email to Wu and Roach, stating: "He's back: 1m shares ...we should now not be so nice. This is a message that RG will act in breach of Corps Act best interests for the company. Lets discuss after 4pm Might need a letter from B&M about corps act and manipulation". 120. On 13 October, Goodman sent another email to Wu and Dulhunty, confirming his intention to exit Healthzone, and giving notice that he would offer around 9 million remaining Healthzone shares to the market, with two possible purchasers already expressing interest. Between 15 and 23 October 2008, Goodman placed 8.4 million shares for sale on market at 49c, and the price of Healthzone shares dropped from 55c to 35c. On 16 October 2008, Wu sent an email to Dulhunty, stating: "On reflection, I'm thinking maybe we would shoot us on the foot if we did go with "Selective Capital Reduction" on RG/Alex's shares. Without a question these guys will fight against us to the end and they may not care by spending big $$ for legal disputes as they have big pocket and if they won, they could gain lot more!? Also, in this volatile market, it's very hard to prove he's manipulate the share price as everyone are dumping the shares anyway?" 121. On 24 October 2008, Dulhunty sent an email to Roach and Wu, stating: "Just got SMS from RG. - Hi One associate says he is about to hit a bid at 21c. What a bargain. Russ. From +61411 485 037 12:14pm 24 - OCT - 08 Really really stupid with ASX investigation going on to do this in writing and ahead of what might happen. I HOPE this occurs. It would establish a very clear audit trial … and is easy to fix." 122. On Monday 27 October 2008, Goodman amended the Ask to 184,000 shares and dropped the Ask price of shares from 49c to 29c, which was 6c below other Asks of 35c. Dulhunty sent an email to Wu and said: "Sell order profile dropping. RG's 3 mates still sitting there with 248k shares, but not as bad as 4 mates with 400k shares on Friday". 123. On 28 October, Goodman emailed a presentation to Wu and Dulhunty, stating: "You will find this of interest…HZL..29c still no interest. OVERSUBCSCRIBED LOL. At least it shows me exactly what you guys think your stock is worth. 2/5ths of f all .Water always finds its true level and what goes around comes around. Good luck." When Goodman removed his sell orders, Dulhunty said "Sell order profile has improved a lot. See below, RG mates gone." Nearly an hour later on 28 October Dulhunty sent a further email to Wu with the pros and cons of buying, stating:: "Buy decision for: • Can do it now without blocking tranches • Certainty of getting price up • Provides buffer for future reductions • May force had of strategic seller to catch out • May be possible to mitigate strategic sales with phone calls • Keep up VWAP • Make shareholders happier - Tao, franchisees, other • Make future shareholders happier - vendors • Better for placement discussions • Demonstrate resilience to downturn • Good value for buyer • If not buy, then concerns to other buyers • When price goes up, people wish they'd bought cheap Buy decision against: • Invite strategic sell down • Potential defence by seller - H associates buy to manipulate • Show seller that price easily recovers after attack - no long term consequences of actions • Use up powder Net result = buy Timing • 7000 at 35c at 10:20 am • 8000 at 38c at 10:30 am • 5000 at 42c at 10:40 am - 2 buyers preferable • 2 brokers preferable" 124. In accordance with a suggested Bid and time the Wang Intersuisse Account at 10:17 placed a Bid for 7,000 Healthzone shares at 35c which traded but did not move the price of Healthzone shares. Dulhunty sent an email to Wu saying: "Now looks better." 125. On 30 October, Dulhunty sent an email to Wu with the sell profile for Healthzone shares and a further email with the "Friday strategy", which discussed the timing of purchases and the release of Healthzone announcements: "Thinking about timing of 4C and purchases… Could be an idea to: - Lodge 4C at say 3:15pm on Friday - Do some buying to get momentum up before Friday close - Lodge AGM notice and annual report after 4pm - A bit of support on Monday What do you think?" 126. Following this email the Wang Intersuisse Account over a period of 20 minutes placed two Bids: the first for 10,000 Healthzone shares at 38c traded in two lots and increased the price from 35c (set by the previous Wang trade) to 38c. After that, Wu sent an email to Dulhunty which said: "Just done. On the other matter, while we have discussed and agreed for quite a while, I'd greatly appreciate if the 70k of 'acquisition fees' (or whatever other titles that can be capitalized) can be granted to me as this has become an serious to me. I'm only receiving $60k of director fees/year while investing 100k to 200k a year in our shares, I'm having nothing left really.... ". 127. The second Bid of 7,400 Healthzone shares at 38c on the Wang Intersuisse Account also traded and this trade set the close at 38c. 128. Dulhunty sent an email to Wu and suggested a further 2,000 at 44c but by someone other than them. Wu replied "Still finding the mates I know". At 4.01pm, Goodman sent an email to Dulhunty, stating: "Would you prefer I stayed out of the screen. And for your interest the ASX has no power to demand an order be taken out of the screen as long as it portrays a fair price at which the seller is prepared to sell at and is in no way trying to manipulate the market. Your call but don't say I didn't ask." Dulhunty forwarded the email to Wu and Roach but suggested they ignore Goodman. Later that day Healthzone released three announcements as foreshadowed in an earlier email from Dulhunty. SECOND PERIOD OF OFFENDING, NOVEMBER 2008-JULY 2010: WU, DULHUNTY AND ROACH Overview 129. In the Second Period of Offending, the Offenders (Roach having joined the conspiracy in November 2008) took action whenever they deemed it necessary to create or maintain an artificial price for Healthzone shares at a level that they believed required in the circumstances. 130. The Offenders communicated by email to monitor the price of Healthzone shares and agree on a plan to create or maintain the price to an artificial level. They traded on their own accounts, but there was also an increased use of third parties, as some accounts previously used by the Offenders were blocked from further trading. Dulhunty in particular expressed a desire in this period for the Offenders to move to third party accounts and different brokers to assist in their continued manipulation of the price of Healthzone shares. 131. The use of third parties included Roach asking Jenkins to trade, which Jenkins did using his CommSec Account. Jenkins claims that Roach gave him trading instructions by email, face to face and over the phone. There was also trading conducted on third party accounts with CommSec in the names of Adrian Vringer and Mary Ann Harper and Andrew John Harper, with the Offenders operating and placing the trades on these accounts. Following discussions between the Offenders, Roach also asked Healthzone employees Limbert and Jinks to open CommSec trading accounts and sent details of the trading the Offenders wanted them to carry out. Roach also communicated with Pattinson, a contractor, sending him details of Healthzone shares that the Offenders wanted him to buy. Roach also used his own ETrade share trading account number, 3201093, from 1 September 2009. 132. Throughout the Second Period of Offending from November 2008 to July 2010 there were 235 trades conducted pursuant to the agreement, of which 30 were wash trades where buy and sell orders were coordinated between the Offenders, as follows: • Dulhunty used five trading accounts in his name or in the name of DCC to execute 55 trades, involving the purchase of 305,500 shares and an overall investment of $100,977; • Wu operated trading accounts in his name and the name of his company MGR, and used or asked family members to use a trading account in the name of Wei Wang, by providing trading instructions. There were a total of 46 trades, involving the purchase of 336,860 shares and an overall investment of $108,480; • Roach used a trading account in his name to carry out 6 trades, involving the purchase of 31,500 shares and an overall investment of $13,032; • the Offenders operated a trading account in the name of Roach's sister Mary Ann Harper and her husband Andrew Harper, and two trading accounts in the name of the husband of Roach's personal assistant, Adrian Vringer, for which Roach had obtained the log-in details, to carry out 83 trades, involving the purchase of 397,830 shares and an overall investment of $128,938; and • Roach requested five other people - Jenkins, Tynas, Limbert, Jinks and Pattinson - to buy shares in Healthzone, including by giving them trading instructions. In total these five individuals and one other, Andronos, who was a friend of Pattinson but was not personally known to Roach, carried out 45 trades, involving the purchase of 269,233 shares and an overall investment of $91,420. 133. Examples of the communications and trading for this period are set out below. 5 to 17 November 2008 134. On 5 November 2008, Dulhunty sent notes of a conversation he had with Goodman to Wu and Roach, in which he reported details of Goodman's concerns about Healthzone. Dulhunty raised with Roach and Wu his concern that the Healthzone share price was down because Goodman was selling shares. On 6 November 2008, Dulhunty sent an email to Wu, stating: "We should line up independent people to buy shares on market over the next few days for important reasons: • Get price up • Show clear impact of RG transactions on share price • Show clearly that the transaction were at below market value Ideally, we want to see a 'V' whenever RG traded..i.e. a sharp dip, then recovery. This will platform us for later if worst case scenario action is required". Wu said "I will talk to my people today but many of my friends have moved to property market after the market crashed since few months ago", and later added "The challenge is, US crashed over 400 points over night and if I asked people to buy, I would be looked odd and even lose credibility". On 10 November 2008, the price of Healthzone shares dropped from 29.5c to 25c. Dulhunty and Wu attributed the price fall to Goodman, although it was not him. 135. Dulhunty sent an email to Wu which said: "We need someone to buy 8,000 shares at market to get the price up to 29.5c. Reasons: Get price up with V shape. We can see in a few days of RG continues dumping and trace trades. Here's today's sell profile. Got anyone lined up?" 136. Later that day Roach sent an email to Wu, saying: "I want to start calling the HL Franchisees to arrange payment for their shares. Did you say you were going to arrange a friend to stand in the market to improve the SP? Let me know so I did'nt have a false start on the ring around." 137. Wu replied and suggested to Roach and Dulhunty that they coordinate with each other, but there was no trading that day by or on behalf of Roach, Wu or Dulhunty. 138. On 11 November 2008, an opening Ask of 27c was 7.5c below the next lowest Ask of 34.5c. Dulhunty sent emails to Wu and said: "OK to get 7,250 at 27c. Wait a few hours before the 6,500 at 34.5c". At 10:24 the Wang Intersuisse Account bought 7,250 Healthzone shares at 27c and increased the price from 25c to 27c. This trade set the close. Wu sent an email to Dulhunty "Done". Although Dulhunty made further suggestions there were no further trades that day by or on behalf of Dulhunty, Wu or Roach. 139. On 12 November, at 10.26am, Dulhunty sent an email to Wu stating: "Here's today's sell profile. Suggest buy 7,000 at 30c". Wu replied: "Ok. Can you talk to Roach re the timing of calling the franchisees about the options? The idea was to support the price at say 40c right before calling them so we don't want to invest twice." Dulhunty replied: "OK, will do. In the meantime..suggest you get working on getting the price up. Will take time and we need V shape for other purposes. HMPL will be able to send out invoices as soon as price hits 40c. It will take a few days to get there." Dulhunty then forwarded that email chain to Roach, stating: "Agree with the approach below? I think buying on our side needs to speed up." 140. Wu then separately confirmed in an email to Dulhunty: "Ok. Roach, MJ2 and I discussed this strategy (getting price up at 40c before calling) and we agree to have an outside investor doing this and I told them I could find this one and all agreed HZL could pay $20k to this investor for helping this. But as you know, it's actually me who is funding this. When you talk to Roach, can you get an OK from him for paying this say next week? Something can be capitalized. But probably better not mention that I am the one who is funding shares purchase. The reason for asking this was explained to you, cash dried for continuely buying shares since IPO." 141. At 11:28:24 the Wang Intersuisse Account bought 7,000 Healthzone shares at 30c as set out in an email from Dulhunty earlier in the day and increased the price for Healthzone shares by a further 3c to 30c, from the last trade at 27c which was executed on the Wang Intersuisse Account at 10:24:12 on 11 November 2008. Wu confirmed to Dulhunty that 7,000 Healthzone shares had been purchased. 142. Dulhunty confirmed in an email to Wu that the $20,000 "booty" had been approved and would be added to Wu's fees and to ask if he needed more. Dulhunty added: "Roach wants to get price up to 40c asap. He's hanging to make calls to franchisees and will do as soon as price is up." 143. Shortly afterwards Dulhunty sent an email to Wu , stating: "Would be good to get some at 33c at around 3pm. This would platform step up to 34c. How many people / entities do you have to buy the shares? Better if different ones" and set out the current order profile. Wu replied he would check but that many of them were on holiday. 144. Roach sent an email to Wu, stating "After discussion with RD I have arranged $20k to be put into your account as your "Performance Bonus" payment we have been talking about", referring to an entitlement to a bonus that was contained in Wu's executive service agreement. Roach then sent an email to Jenkins stating that "the Healthzone board" had confirmed the payment and it should be deposited into Wu's account. 145. Dulhunty sent a further email to Wu which said: "Someone has come in with 8,000 at 33c. Suggest snap it up asap" with the sell profile and within the hour sent another email which said: "One hour to go..same profile" and at 15:27:28 the Wang Intersuisse Account bought 8,000 at 31c. This increased the price of Healthzone shares by a further 1c to 31c, from the last trade at 30c which was executed on the Wang Intersuisse Account at 11:28:24 that morning. The trading set the closing price for Healthzone shares at 31c that day. 146. On 13 November, the previous closing price was 31c. Dulhunty sent an email to Wu, stating: "You're going to slow with share buying. I spoke to a broker I know yesterday and he reckons there's no reason we can't buy shares in HZL. He says it would be a good sign to everyone else. I propose to buy up the first batch and suggest you jump on board at 34c. We need to pull our fingers out and get on with getting the price up to 40c asap". 147. To this Wu replied that he was not in the country and was "in the trade show with customers yesterday and cannot keep looking at the bberry while talking to them Plus AS stopped me from buying that, I cant force him".. 148. Later Dulhunty bought 5,500 Healthzone shares at 31c on his Dulhunty CommSec account and a minute later a further 2,000 Healthzone shares at 33.5c on his CommSec Account. The second Bid traded immediately and in full through two price levels, increasing the price by 2c to 33c. 149. Dulhunty sent an email to Wu which confirmed the trades and said: "I bought 7500 shares to 33c. We need to get price up. AS needs to relax. I thought you were going to be the price driver with me filling you in?" 150. Wu replied and again said he was being stopped by Intersuisse but asked how many were needed to act now and Dulhunty replied 7,000 up to 34c. 151. Wu replied: "bought 11,000 shares from 31 to34c" and at 11:37 the Wang Intersuisse Account bought 11,000 Healthzone shares at 34c and traded through three price levels from 31c to 34c, increasing the price from 33c to 34c. This was an increase of 1c from the last trade at 33c, which was executed on the Dulhunty CommSec Account at 10:47 earlier that morning. At 11.41am, Dulhunty sent an email to Wu, stating: "Nice work, profile now as follows" and set out the current orders. The trade set the closing price for Healthzone shares at 34c that day and the following day. 152. At 4.53pm, Dulhunty sent a further email to Wu, stating: "I suspect that when franchisees get their shares + bill to pay…some might sell to pay the bill?" and setting out the current orders, to which Wu replied: "I'm more concerned that it would probably be a big gap from now to 40c as more we bought, more sell is there = might cost big $ to get what we want?" At 5.32pm, Dulhunty sent an email to Wu stating: "It looks like: - For tomorrow.. do nothing until 15500 at 32 clears - Over week, will better idea of tone and timing nee announcements Might be best to get negative announcements out of way while share price low, then build." 153. Wu and Dulhunty exchanged emails which discussed getting the price to 40c but there was no further trading by or on behalf of Dulhunty, Roach or Wu. 154. On 17 November, the previous closing price was 34c. Roach, Wu and Dulhunty continued to discuss getting the Healthzone share price to 40c. Wu confirmed his mate could clear stock below 40c. 155. There was trading on the Wang Intersuisse Account which cleared some of this stock. A Bid for 21,050 Healthzone shares at 34c traded immediately and in full through two price levels, consuming all Healthzone shares on offer at 32c and all 5,550 Healthzone shares on offer at 34c, being the same price as the previous trade which was executed on the Wang Intersuisse Account at 11:37 on 13 November 2008. This trading set the closing price for Healthzone shares at 34c. 156. At 3.33pm, Wu sent an email to Dulhunty and Roach, stating: "32c and 34c stock have ALL been cleared up and I hope tomorrow's sell profile can be changed a bit otherwise it will probably cost us more to get the price up to high or even mid 40s". At 6.17pm, Dulhunty replied: "Nice work. Current sell profile. Expect someone will come in around 35c tomorrow. Might see if I can get some at 44c to get things kick started after Hilson meeting". At 9.28pm, Roach replied: "Good result well done… as soon as we get into the 40's I can start calling HL franchisees to lock down the share payments". At 9.32pm, Dulhunty replied: "Might be better to wait a few days and see if the RG gang dump stock. We also need to get a negative announcement out soon." At 9.43pm, Roach replied: "I think we need to keep pushing fwd with the SP … to pull back wasts the efforts of the day. I also think your too keen with the negative announcement." At 9.57pm, Dulhunty replied with his reasons for an announcement, concluding: "Get 'a' negative announcement out soon Then build share price up again." 10 December 2008 157. In early December, there were a series of emails between Goodman and Dulhunty, in which Goodman expressed interest in acquiring a larger stake in Healthzone, but also indicated he wanted to sell and was suspicious that the market for Healthzone shares was being manipulated. On 10 December 2008, Dulhunty and Roach approved a further $70,000 to $100,000 in fees for Wu, with Dulhunty stating: "MW seeks fees of around $70k $100k to compensate for salary and buying". Dulhunty and Wu discussed Goodman wanting to sell Healthzone shares at 35c and who they could get to buy Healthzone shares. 158. At 11.39am, Wu sent an email to Dulhunty, stating: "If we stepped in to buy shares now, it would just make us look like admitting guilty to RG especially after his email?" Dulhunty replied: "Not sure ... We need to have some people buying shares / putting orders on screen. Sekely told me that RG didn't have issues with people buying, was just interested in selling his shares for 35c Need 5 min plan fast to get some orders from people we know. It is OK to encourage employees, associates to buy shares". 159. According to notes made by Dulhunty, Andrew Sekely at Intersuisse called Dulhunty, reported on a conversation with Goodman and expressed concern that there were no buyers for Healthzone shares. Wu and Dulhunty subsequently put on Bids, and provided details of the Bids to each other: "Placed bid of 5000 shares at 28c" and "Just ordered 5,000 at 27c and working through another broker". 160. The Bids traded and reduced the price for Healthzone shares from 34c to 27c. After the Bids traded, Dulhunty sent an email to Wu, stating: "Bad news…we got hit on both of our buy orders…shares down to 27c. Probably RG". Wu responded: "90% is a trap set by RG with his previous emails…unfortunately you and I jumped onto it". At 1.50pm, Goodman sent an email to Wu and encouraged him to consider Goodman's proposals in relation to the company. Goodman also said he would introduce himself to "your partner in China", a reference to Guoguang Tao, who was Healthzone's second largest shareholder. Goodman's email stated: "Michael Can I just say that I can't understand your change of heart re meeting parties who can forward your ambitions it is December and you may be busy but I would be surprised if you didn't see the importance of the help I am offering you. The stock is 27c no buyer. For your own benefit I would rethink your decision. Business is not going to get any easier in these challenging times and your ebit to debt ratio is alarming. Still happy to help. I will be speaking to your partner in China shortly,via an interpreter if I need . I am sure he is wondering what is going on. I will introduce myself and tell him". 161. Roach asked what happened with the share price and Dulhunty said: "It was me at 27c and MW at 28 Fell into RG trap. Now there are zero buyers and share price is back down to 27c". According to notes of a conversation with Goodman which Dulhunty sent to himself, around this time Goodman expressed further concerns about Healthzone, asked for a meeting between Healthzone and a franchise company, and suggested that he would tell Tao about his concerns. Goodman later sent an email to Tao and said: "I am a holder of about 19% of Healthzone and believe you hold about the same percentage. I thought I should contact you to make sure you are aware of what is happening to HZL and its share price in Australia and also see if you have any interested in either buying more stock or selling your stock" and "I will email more detail if I can ascertain whether you are happy with your investment in the company and which way you think it should go forward. Also interested as to why you are not a director of the company". 9 to 10 March 2009 162. On 9 March 2009, the previous close for Healthzone shares was 27 cents. Dulhunty sent an email to Wu and Roach, stating: "What are doing about the share price collapse? Did you guys get any bites from potential investors such as franchisees, staff? We should remedy this quickly to avoid issues/distractions i.e. RG, JS, GV queries, strategic dumping etc"" 163. At 16:07 an amended Bid for 1,500 Healthzone shares at 38c was entered on the Wang Intersuisse Account. The Bid traded in the Closing Auction at 16:10:40, increasing the price of Healthzone shares by 11c from 27c to 38c and set the closing price for Healthzone shares that day. 164. Dulhunty noticed the trade and told Wu that the Healthzone shares price was back up to 38c. Wu confirmed "that was me" and Dulhunty replied he thought it was, and he would buy tomorrow. 165. On 10 March 2008 at 10:28:04, DCC's CommSec account purchased 5,000 Healthzone shares at 38c and at 10:28:59 a further 5,000 at 39c. The second Bid traded immediately and in full through two price levels increasing the price of Healthzone shares by 1c to 39c, from the last trade at 38c which was executed on the DCC CommSec Account at 10:28:04 that morning. This trade set the closing price for Healthzone shares at 39c that day. 166. Dulhunty confirmed to Wu his purchases and said: "Put through some buying today. I can now only buy through one of 3 brokers since 2 won't let me buy HZL shares anymore...Need to get some more support from other people" 14 May 2009 167. On 14 May Wu sent an email to Roach in which he admitted: "...just between you and me, I've been funding my mates (through their names of course) to buy HZL shares over the last 3 years for at least $250k under RD's 'instruction'..." 17 June to 2 July 2009 168. On 17 June 2009 Roach sent emails to Wu and Jenkins which set out the trades that should be placed to keep the share price at 39c and said: "We need to keep some momentum going... After the 39c was hit yesterday another BUY for 5000 shares returned the price to 40c... I assume it may have been RG teaching us another management lesson. Profile this morning a 70,000 SELL @ 39c. We need to put another BUY for say 2000 at 38c, 1500 at .37c FIRST THING TODAY and then watch and when they get hit take another 1000 at 39c to close the price at 39c as the 40c will be too bigger jump. With the screen pretty low on SELL we could also place a few lower BUYS at at mid 30's that will be likely to sit... but if they get hit we can manage at the close of market to return to 39c with a late small buy. What do you think? " 169. Roach and Wu approved a bonus to Jenkins of $10,000, in accordance with Jenkin's executive service agreement. 170. Jenkins on the Jenkins CommSec Account placed Bids for 1,500 Healthzone shares at 37c and 2,000 Healthzone shares at 38c. On 1 July, he placed a further Bid for 1,000 Healthzone shares at 37c and on 2 July another Bid for 1,000 Healthzone shares at 38c. All these Bids traded on 2 July 2009 in full at 37c. The price of Healthzone shares decreased from 39c to 37c due to the entry of an Ask at 37c at 10:02:44 that morning. 171. Jenkins sent an email to Wu and Roach with a screenshot of the market for Healthzone shares after his Bids traded which said: "Shares" and Roach replied to Jenkins "We need to get back to .39 before close... What is the profile?" 172. At 11:01 on 2 July 2009, 1,500 Healthzone shares were bought on the Jenkins CommSec Account. This trade did not move the Healthzone share price. The residual Bid for 500 Healthzone shares at 37c traded on 15 July 2009. 173. At 11:05 on 2 July 2009, 2,000 Healthzone shares were bought on the Jenkins CommSec Account. This trade increased the Healthzone shares price from 37c to 39c from the previous trade at 37c which was executed on the Jenkins CommSec Account at 11:01 that morning. The trade set the closing price for Healthzone shares at 39c that day. 174. At 11:06 Jenkins replied to Roach and copied to Wu: "done" and at 11:07 Jenkins sent another email to Roach and copied to Wu which said: "Done at 39 cents". 31 August to 1 September 2009 175. On 31 August 2009 at 16:14:23 Healthzone announced 23% growth in net profit after tax for the year to 30 June 2009. 176. On 31 August 2009 Roach sent an email to Wu and Dulhunty, stating: "$24k would close HZL at .42c tomorrow. We need to make sure this happens through support… We can show RG that the market likes what they see even if he thinks its pathetic! I asked Andre if he was a buyer based on his positive response … he said he is "always a buyer if there remains value". Dulhunty replied "Good stuff and who and when?" 177. Roach replied that he would "shop his regulars for commitment." 178. On 1 September 2009 at 7:56 Roach sent an email to Dulhunty and Wu, referring to two scenarios which would involve spending $29,000 to increase the share price to 42c or spending $15,600 to increase the share price to 40c. Wu replied, stating: "Maybe the best thing is for directors to buy, which ticks another box for RG but I suspect he won't be pleased but only blaming market manipulation if pushing the price too high? (Eg. Over 25% jumped from 32c to 40c)". 179. At 14:54 Roach made a small buy on his ETrade Account of 1,500 Healthzone shares at 34c. Prior to this trade Roach had not purchased shares in Healthzone or in any other listed company on his ETrade Account. The trade had the effect of increasing the price for Healthzone shares from 32c to 34c. Wu after being unable to purchase Healthzone shares on his Hub 24 account used his Intersuisse Account and placed a Bid for 15,000 Healthzone shares at 36c which traded immediately and in full through two price levels. This increased the price of Healthzone shares by a further 2c to 36c from the previous trade at 34c which was executed on the Roach ETrade Account at 14:54:22 that afternoon. The trading of this Bid set the closing price for Healthzone shares at 36c for that day. 7 to 15 January 2010 180. In January 2010, the Offenders were about to commence a capital raising through the issue of shares to institutional investors, in two tranches known as "T1" and "T2". Between 6 and 8 January 2010, the price of Healthzone shares dropped from 41c to 33c. On 7 January 2010, Dulhunty sent an email to Wu and Michael Jenkins, stating: "Shares still down. Needs immediate marketing so as not to stuff T1 and T2. Tried to fix but I cannot." Roach then responded separately to Wu and Jenkins: "If we don't get this price back up to .41c HZL will need to issue and xtra 385,965 shares for T1 with issue price to be 75% of the 5 day VWAP = $110,000 dilution Already potentially costing $22k per day for every day we leave at .38c for T1 issue. This is urgent and we can't buy as Directors or EC but we need to find someone who can fast." Roach, Wu and Jenkins discussed who might be available to trade. 181. On 8 January 2010, at 8.11am, Roach sent an email to Wu and Jenkins, stating: "We need to do something as USA raised an issue overnight…With investors watching. Potentially could go lower and need to act today and everyday to remedy. Must be someone outside I/S that can support?" At 9.09am, Dulhunty sent an email to Roach, copied to Jenkins and Wu, stating: "Guys…you need to 'market' the shares so as not to stuff the close T1 and T2. Suggest get onto it straight away I tried by am blocked". Roach approached one associate, who did not have an online trading account, and then asked Pattinson to call him. At 12.57pm, Pattinson placed a Buy order through his wife's account for 5,005 Healthzone shares, which traded immediately and caused the share price to increase from 31 cents to 33 cents. Pattinson then sent his wife's bank account details to Roach. Pattinson and Roach exchanged text messages about further trading, with Roach identifying a block of $12,000 worth of Healthzone shares at 33 cents, adding: "If they ask you why tell them they have not been this cheap for ages". At 3.57pm, Pattinson placed a further Buy order for 37,500 Healthzone shares at the market price, which partially traded before the close. 182. At 9.37am, Roach sent an email to his sister Mary Ann Harper, stating: "I used someone else yesterday and spent $15k. Would have been nice if your account! Anyway would love Andrew to be set up asap so I could use him from Monday if possible. If you can give me all the details I can handle it for you. I need to ensure stability in next month while I am on my roadshow." 183. On 11 January 2010 Dulhunty sent an email to Roach, Jenkins and Wu which stated: "What's happening about marketing the shares today and tomorrow? It will not be easy for the shares to rise and may require coordination of buying and selling within daily % change limited". 184. Roach sought Pattinson to buy Healthzone shares, sending the following message: "Chasing payment advice now... Are you ready to go again to buy at .38c... Currently a 10000 share chunk... Don't buy them all. Then a jump to 50000 shares for .45c so I will get some on sale at .41c that we may get someone else to hit. I will call you when I get transfer advice from bloody accts!!" 185. Roach sent an email to Dulhunty and Wu and asked: "I have buyer back in onto the 38c stock today. Do I get him to buy the 10,000 chunk or leave some for the next buy to pickup and lift to next level. We need some on sale at .40 to > .43c range. Last thing we want is take out the .38c and someone the put out mor lower priced to sell... better to have sellers at 41, 42 or 43 before we hit at 38.MW is on a flight now so it is up to you or I to get sellers on screen. Can you help with sellers? Best leave MJ out of these emails and use my address." 186. Dulhunty replied to Roach and to Wu and said: "Will help with the selling at 41-43c Would be ideal to take out what can as soon as can (before more sellers jump in) I suspect % movement limits may get in the way and other sellers may jump in" 187. Pattinson bought 5,500 Healthzone shares at 38c on his wife's account, which increased the Healthzone share price from 33c to 38c. Dulhunty sent a screen-shot of the trading in Healthzone shares to Roach and Wu, noting "Going good...38c and sell orders at 40c - 42c see below". 188. Dulhunty placed the following Asks on his DCC CommSec Account: 3,000 Healthzone shares at 40c, 2,000 Healthzone shares at 41c and 2,000 Healthzone shares at 42c. The first Ask was cancelled on 14 January 2010. The remaining two Asks were amended and traded on 13 January 2010. 189. At 1.30pm, Roach obtained the login details for his sister and brother in law's CommSec Account and at 2.49pm a Bid of 16,000 Healthzone shares at 35.5c was placed on the Harper CommSec Account, which traded in part, increasing the price from 33c to 35c. This trade set the close. The Bid for the remaining 1,000 Healthzone shares was amended to 35c. 190. At 3.04pm, Roach sent an email to Dulhunty and Wu, stating: "Just got another buy through but there was another seller placed 15000 shares at 35c that had to be taken out. The buyer tried to buy 16000 shares at market to get back to 38c but Commsec only allowed 15000 shares which only took the price from 32c back to 35c Should I get it hit again to take out the 38c x 15000 shares or wait? Or maybe wait until 3.55pm and buy 1000 shares to close at 38c? Now someone had just put 1000 on buy at 35c." 191. An email from Dulhunty said "Get some now at 38c" but further Bids to get to 38c were not allowed by CommSec. Roach complained to Dulhunty and Wu about his failed attempts to purchase the Healthzone shares, providing details of the orders placed on the Harper Commsec account: "Fking Commsec…Put the BUY on for 16000 at market SELL was 15000 @ 35c and 15000 at 38c 16000 would have closed at 38c Commsec left 1000 sitting at market for 35c Went back in to cancel 1000 but Commsec would not allow until after market close. So placed a new BUY at 38c for 1500 shares Commsec left on "Process" then cancelled 1500 BUY leaving the 1000 sitting as BUY order at 35c Looks like tomorrow for 38c and higher!" 192. On 12 January 108,000 shares were put up for sale on market at 35c and the closing price for the day dropped from 35c to 33c. Roach sent an email to Dulhunty and Wu, saying: "Another block … With that qty likely RG", although it was not in fact Goodman. The Offenders discussed different approaches to the share price. At 3.36pm, Roach sent an email to Dulhunty and Wu, stating: "Surprised how popular HZL is at lower prices… What do suggest we do for close today? Ideally 10,000 share buy but Commsec wont cross both prices. So if buy the 7911 we clost at 32.5c If we leave we close at 33c Happy to buy 25,000 shares to close at 40c but Commsec want permit? Any suggestions?" At 3.40pm, Dulhunty replied: "Options - Buy say 9,000 shares at price of up to 35c to just get back to 35c - Do nothing and wait until tomorrow Preference would be to get back up to 35c and work on growth tomorrow morning". Ultimately, no trading occurred by or on behalf of Roach, Dulhunty or Wu. 193. On 13 January Dulhunty sent details of the opening buys and sells and suggested at 9.55am a Bid of 9,000 at 35c. Roach was in New York and could not access his computer and asked Dulhunty: "Can you buy for me....for them?", including account details for the Harper Account. 194. Dulhunty asked Roach for further details for the Harper Account and a minute later sent an email to Roach which said "Done". 195. At 9:52:11 a Bid for 9,000 Healthzone shares at 35c was placed on the Harper CommSec Account which traded at 10:04 in two trades and increased the price of Healthzone shares from 33c to 35c. 196. After the Bid had been placed Dulhunty sent an email to Roach and Wu with a screenshot of the market for Healthzone shares as at 09:53 on 13 January 2010 and a further email at 10:07:28 (once the Bid had traded) to Roach and Wu with the subject "35c...OK for now", containing a screenshot of the market for Healthzone shares as at 10:07:44. 197. Dulhunty then amended a number of Asks on his DCC CommSec Account and sent an email with details to Wu and Roach: "small sells 36 to 38c runway for take off". Dulhunty asked Roach if "Mary" was to take some up but later sent an email to Roach which told him not to worry as "there are still more at 35c" 198. Dulhunty continued watching the market and sent an email to Roach with suggestions for "Mary" to take Healthzone shares to 36c and later to 37c, but the account did not have any funds. 199. Dulhunty sent an email to Roach which said: "The following would be good if someone did as follows: 16,500 at 0.37 = $6105 I can't do" and then sent the same email to Wu and Jenkins. Roach replied to Dulhunty suggesting that he could get Pattinson to do the trade and soon after sent Pattinson a text message asking "Brett can you buy 16,500 at 0.37". Pattinson said "OK" and Roach told Dulhunty that Pattinson would do the trade. 200. However two hours later when the trade had not been executed Dulhunty said to Roach that Pattinson "better hurry up" and Roach sent a text message to Pattinson, stating: "Hey Z, Will you be sure you can do that BUY? Don't want to leave too late". Roach was told "its underway". 201. At 14:54:37 Perry Andronos placed a Bid for 20,000 Healthzone shares at 38c on his CommSec Account which traded immediately in part over four trades, three of which matched with Asks on the DCC CommSec Account. These trades increased the Healthzone share price by a further 3c (from the price of 35c set by the Harper CommSec Account earlier that morning) to 38c and set the closing price for Healthzone shares at 38c that day. 202. Dulhunty saw this trade and sent an email to Roach and Wu which said : "Great progress : 38c ...would be good to do 2,000 at 40c at 3:55pm if still good". Dulhunty also sent an email to Jenkins, Roach and Wu and suggested a trading halt once Healthzone shares got to 40c to give them time to deal with the announcement about the capital raising referred to as T1. In an email with the subject "Trading halt and timing", Dulhunty stated: "This should also be soon after shares get back to 40c Might need to some firepower ready tomorrow with a small open, then keep it up until say lunchtime halt". Wu replied: "Agree in principle but also might be better to confirm with JO today they are OK with this too". Roach also replied: "Agree need to discuss with JO but not in context of holding price but good governance". 203. On 14 January Dulhunty sent an email to Roach which asked about a Plan B for "Mary" in case funds did not clear and asked if Wu's network could assist. 204. Dulhunty also sent an email to Jenkins with a draft of the Trading halt announcement with suggested timing and what to say to the ASX to get the trading halt. 205. Dulhunty sent a further email to Roach with details of sells to put on the Mary Account. However, the Mary Account did not work and Dulhunty tried to find out why. 206. At 09:00:18 and 09:01:47 Dulhunty placed two Asks on his DCC CommSec Account, the first for 3,000 Healthzone shares at 40c and the second for 3,000 Healthzone shares at 41c. The first Ask traded in part at the opening on the market at 10:04:18. 207. Roach sent an email to Dulhunty which said he would get a different account and also asked Dulhunty what was required as to quantity and price. Dulhunty said 2,000 at 40c at 9.55am. 208. Roach sent a text message to Tynas, stating: "Hey day trader! Are you interested in doing some day trading for me and I dd you the bootie?". 209. Roach then sent an email to Dulhunty which said: "It will happen as you have described..." and Dulhunty replied to Roach: "OK, Should I hold off BP for dry gunpowder if needed? I assume so and plan to call BP in 5 mins" and later confirmed to Roach: "BP on hold for now...on standby to fire when ready" 210. At 09:57:49 Roach replied: "No need I have made other arrangements. Just watch screen for me and update as I cannot. BP is touchy because he goes through phone order broker who is asking to many questions." 211. At 9:59:39 a Bid for 2,000 Healthzone shares at 40c was entered on the Tynas CommSec account which traded with an Ask on the DCC CommSec Account entered earlier that morning. The trade resulted in a further increase in the price of Healthzone shares by 2c to 40c, from the last trade at 38c which was executed at 14:54:37 on 13 January 2010 on the Andronos CommSec Account and the DCC CommSec Account. The trade between the Tynas and DCC CommSec Accounts set the close at 40c. 212. At 10:46:46 Tynas entered a further Bid for 3,000 Healthzone shares at 41c on his Tynas CommSec Account which he later cancelled. 213. Dulhunty sent an email to Jenkins to proceed with the trading halt which was copied to Roach and Wu. At 11.02am, Dulhunty sent an email to Roach and Wu, stating: "See below - Current market profile + How we want it to look at 10am on Monday - Need to figure out who does what before Monday…from today - Orders can go on screen any time between now and Monday - If build up the buy side now, then won't be taken up until Monday...and can remove before Monday - This might bring others to the table for strong Monday open Requirements: - More non-related friendlies...need to start working on this and get a few accounts set up - With cash coming in, small fees could be agreed (to be paid later) - Some gossip with people that can invest/buy from Monday....i.e. Andre, Selim, staff etc" 214. At 11.27am, Roach sent a text message to Tynas, stating: "Well done BT ... Now to our the trading halt for the big announcement! Can you give me some acct details so I can set you up with the bootie and make good on the RD promise!" At 2.04pm, Roach sent a text message to Pattinson, stating: "Hey Z, can you text how many shares you purchased for how much each on which day and how much we owe you in total for your bonus?" 215. On 15 January 2010, at 7.39am, Dulhunty sent an email to Roach and Wu, stating: "Very important for T2: - if Monday goes well, then fast and easy - if Monday tanks, then the whole of T2 could be in doubt or take too long Have you guys got any feedback about this? Need to build up friendlies NOW and their accounts now for strong Monday open". On 17 and 18 January 2010, Dulhunty and Roach discussed which accounts to use and the plan for the trading. 25 February 2010 216. On 24 February 2010, Goodman lodged a Form 604, a notice of change of interest of substantial shareholder, with the ASX that showed 96 sale transactions between 42c and 23c. Roach reported that Goodman was disappointed that the Form 604 did not cause a big dump of Healthzone shares. 217. Dulhunty sent an email to Wu and Roach which said: "Should be easy to get to 35c if no interference……. MW...can you drive? Ask Roach for the codes", and Wu replied "We will be at EGM together so doesn't matter me/Roach to drive." 218. At 10:11:12 on 25 February 2010 Healthzone released the "Results of Extraordinary General Meeting" relating to the approval of a share and warrant issue. 219. At 11:35:23 and 13:07:13 there were Bids for 10,000 Healthzone shares at 33c and 10,000 shares at 33.5c entered on the Harper CommSec Account. The Bids traded immediately. The first traded through two price levels and increased the price of Healthzone shares from 32c to 33c. The second trade increased the price a further .5c to 33.5c and set the close. 220. According to CommSec records, the orders which resulted in the Bids at 11:35:23 and 13:07:13 on the Harper CommSec Account were placed through IP address 203.51.48.91 which according to Telstra was assigned at those times and on that date to username in the name of Dulhunty. 221. After the trading Dulhunty continued watching the orders being placed in the market for Healthzone shares and sent an email to Roach and Wu with a screenshot of the market for Healthzone shares and said "Will wait and see what happens up to 3:50" and Roach replied: "Are you still buying over two price brackets in the same day? This is what RG is cracking over because he said clearly ramping." Dulhunty replied and said: "10,000 at up to 33 10,000 at up to 33.5 Not ramping… RG is full of it… its just what people do but will be careful not to do again if this buzzes RG's bonnet bee ". After further shares were put on market at 33c, Dulhunty said: "Someone's back at 33…RG's gotta get a life", although it was not in fact Goodman. 222. After the close Dulhunty sent an email to Wu and Roach informing them of the closing price of Healthzone shares at 33.5c, stating: "Here's market close at 33.5c. Got distracted at end of day so no trumpy". 1 March 2010 223. After its shares were suspended from trading Healthzone released its half year accounts after the close. 224. On 1 March 2010, Dulhunty sent emails to Wu and Roach that said he was going to be offline and the "Trumpy" account would need to support Healthzone shares after the suspension and company announcement and Wu would need to drive. Wu requested from and was provided by Dulhunty with the account details, usernames and passwords for the Harper ("Mary") and Vringer ("Trumpy") CommSec Accounts. On 2 March 2010, Dulhunty placed an order for 5,000 shares at 35 cents through the "Mary" account, which executed immediately. Dulhunty then emailed Wu, stating: "Mary just did 5k at 35c Logging off now. You'll need to watch and drive carefully today…key stabilisation day with roadshow and following results". At 11.37am, Roach sent an email to Wu, stating: "We have used $65k to date and I have had $60k transferred to me by invoice. RD has done another trade today. It is starting to build up. I will need another deposit and I can only imagine what PC is thinking with my nose in the trough! Have you got any opportunity to provide a Mary or Trumpy? Meanwhile HZL are going to have to top me up. I will send an invoice later today but you will need to make sure MJ processes today. Also, can you arrange from Mary a range of BUY prices to make the screen look a little stronger?" Wu replied: "Shall do and will try to find some Mary and Trumpy". 19 March 2010 225. Before the market opened Roach sent an email to Dulhunty and Wu, concerned that the "Mary" account "is out of action for now" and there were issues in relation to using the "Trumpy" account. Dulhunty replied and asked: "Who is now going to sell the 2,000 at 29c? (need small seller for Trumpy to buy). RD can't buy and sell at same time. Mary possibly out of action (and prefer to keep as buyer anyway). Propose to check Trumpy buying ability closer to 10am". 226. Wu informed Dulhunty "Ok, shall wait your further instruction. The sell orders of mine are: 6000 at 33c and 8000 at 34c." 227. Wu and Dulhunty exchanged emails which discussed the timing of sells which Wu placed on the Wang Intersuisse Account to be purchased by Trumpy. In one of the emails Dulhunty told Wu: "OK, You'll need to put in sell order of 4,000 at 29c at 10:00.Trumpy will buy to meet thFis." and Wu replied "Done". 228. At 9:21:11 an Ask for 4,000 Healthzone shares at 29c was entered on the Wang Intersuisse Account. 229. Dulhunty sent detailed instructions to Roach and Wu about the timing of other trades and a further email that set out the following reasons why the timing was important: "Just for future reference...supposed to wait until 10am to do this (per email below). Reason...to stop others coming in at same level. Next time....carefully read timing instructions in email too...might be important. Have you removed the 8000 sell at 34c?" 230. However despite the planning Dulhunty informed Wu and Roach that the "Trumpy" account was prevented from buying and Dulhunty used his DCC CommSec to purchase the Healthzone shares. 231. Bids were subsequently entered and traded on the DCC Commsec and the DCC Novus accounts and resulted in Dulhunty buying 11,000 Healthzone shares on the DCC Commsec account and 71,000 Healthzone shares on the DCC Novus account, of which 10,800 Healthzone shares were sold by the Wang Intersuisse account. The trading increased the price of Healthzone shares from 26c to 35c and set the close. 232. Dulhunty and Roach discussed whether to "just maintain 35c" or to get to 37c and they decided to leave it at 35c. At 10.50am, Dulhunty sent an email to Roach and Wu, stating: "35 now… up 34% … a bit suss but had to do while can. In hindsight, it would have been a better idea to get some positive announcement before 10am as a basis for people buying. Looks a bit suss with 34% increase for no reason… but then again… near recent prices so ok and explainable. Next? - Just wait around and see what happens to 3pm? - At around 3.30…see if can get to 37? … might be too high". At 2.24pm, Dulhunty sent a further email to Roach and Wu, stating: "Great. Current proposed strategy is to just maintain 35c. Can easily get to 37c at say 3.50pm with 12,000 x 35c = around $4k. Factors For: - Higher price for USA close… but only another 2c. Factors Against: - Looks suss… maybe a bit too high for one day - Potential ASX review. What would you prefer? On standby to execute." Roach responded that it was "better to close at 35c than risk appearing dodgy". Wu also responded that they should "maintain the price at 35c to avoid any potential "shut down" of DCC's account or associates". 233. During the course of the day Roach sent emails to Dulhunty and Wu which set out his concerns that the "Mary" account would be closed and the "Trumpy" account was under review. Dulhunty replied to Roach: "Sounds suss. Tarred with Mary brush for now. Possibly RG complaints. At the end of the day, anyone is allowed to buy and sell shares at whatever price they like...because they like the company, believe in it, support its growth initiatives. It is almost impossible to prove 'motive' for ramping or dumping...something which RG knows well. Even if investigated, nothing happens if Trumpy / Mary just say they like the company. Insider trading is a LITTLE bit easier to prove....but there's nothing material that isn't already in the market... everyone's seen market updates and everyone knows there's a placement in progress. The more likely scenario is that RG heard that he's stuffing the placement and he's selling… he'd be more in the firing line than anyone. Risk of action = very low. Risk that Comsec might just freeze accounts…probable… but not much consequence " 234. Later Dulhunty noted "Closed at 35c...." to which Roach replied to Dulhunty: "Well done!" 3 to 5 May 2010 235. On 3 May 2010 Healthzone released an announcement regarding its international growth. 236. Following the announcement on 4 May Dulhunty sent an email to Roach and Wu which noted "Someone's offering 2500 shares at 31c Might be better to get rid of it early and get back to 32c than leave it hanging there while lobsters from the 32c group climb down to 31 Up to you guys..." and that he would be offline from 3.30 pm but noted "Some more low flying lobsters now...might want to think about take-out of the 31c bracket before more crawl in. Could get hard if hit 28.5c...could happen any time". 237. Roach replied and confirmed that he would drive "Trumpy" and two Bids were then entered by the Vringer CommSec Account: one for 9,482 Healthzone shares at 30c and a further Bid for 12,400 Healthzone shares at 31c. Both Bids traded immediately and in full which increased the price of Healthzone shares from 30c to 31c and this trade set the close. Roach sent an email to Dulhunty and Wu in which he confirmed he had conducted the trades. 238. After the close Roach sent an email to Dulhunty and Wu and complained that he was prevented by CommSec from placing further trades. 239. On 5 May Dulhunty sent an email to Roach and Wu which said: "Need a non-comsec buyer (anyone) to buy some at 10am at 32c...while can.... to stop lobsters crawling to 31. Who can do this? I can't, because I'm being watched closely With every comsec account, they will not let anyone raise the price of HZL...even if the same person pushes the price down, then back up. What is the plan for setting up non-comsec accounts?....Been talking about it for weeks and now stuck." 240. Roach replied to Wu that they only have "BP", a reference to Pattinson, and "Mr X", a reference to Tynas, as their non-CommSec options. 241. About an hour and a half later Dulhunty sent an email to Roach and Wu which said "C'mon...can someone get in at 32 before the lobsters drop? Too slow yesterday" and Roach tried to increase the price to 32c by trading on the Vringer Account but CommSec would not allow the Bid or the Ask. Roach informed Dulhunty and Wu about the failed Bid, stating: "Tried to buy 2000 shares at 32c and order cancelled due to "Orderly Market" = joke!". Roach also informed both Vringers about the failed trading on their account. 242. Roach informed Dulhunty that he tried to contact "BP" and "BT", a reference to Tynas, but had not received a reply, so Dulhunty asked Wu:" MW....any chance of jumping in?" 243. Roach continued sending text messages to Pattinson and Dulhunty emailed instructions: "C'mon guys!...can't SOMEONE pick up 5k at 32c ?" 244. Ultimately the Frame CommSec Account purchased 5,000 Healthzone shares at 32c to increase the price for Healthzone shares from 31c to 32c (from the last trade at 31c which was executed on the Vringer CommSec Account at 15:49:13 on 4 May 2010). The trade set the close at 32c. 245. Roach informed Dulhunty "Got it... on CommSec..." and told Pattinson that he got someone else to do his "dirty work". 246. Jinks sent Roach details of the Frame trade and said "Let me know if you've lost my a/c details." 247. Dulhunty had not been convinced they would get the trade on CommSec and continued to ask about setting up new accounts. He stated: "OK, we're gonna need a few at different places...i.e. 4-5 accounts If ASX is suss we'll need a few". 7 to 11 May 2010 248. On 7 May Roach sent an email to Wu, stating: "We need to reimburse MJ1 for his trade. How best do you want to approach? If we pay as bonus do we have to take tax out or can it be a gross payment? Any ideas as we will be using both DL and MJ1 moving forward". 249. At 4.13pm, Ellen Vringer sent Roach the letter from CommSec closing the Vringer ("Trumpy") CommSec Account. 250. At 4:39pm on 11 May 2010 Roach sent an email to Trudy Potts, Wu, Jenkins and Jinks with the subject "Bonus Payment". The email stated: "Trudy Please arrange a $5,000 bonus payment for Matthew Jinks. Please deduct tax as required and pay balance to his normal account. Thanks, Peter Roach". 17 to 18 May 2010 251. On 17 May Dulhunty sent an email to Roach and Wu about the closing of T2 and that there was "Good current opportunity to get price up to 35c for $9,500. Requirement - quick buy up of block before lobsters come in" and he then set out the factors for and against: "Factors for: - Can do it.. which often can't. - First mover momentum in the right direction… much better than responding to negative. - Make close easier if not done. - Make Singapore buyout of RG easier. - Keep investors happy. Factors against: - $9,500 cost,,, negligible in the overall scheme of things. - Might come back down… less likely to go down if heading up." Dulhunty concluded: "I reckon it's a goer…should also consider fodder for next announcements. Would be good to get some news/updates from executive team.". 252. Roach sent Dulhunty's email to Wu and agreed: "Agree it is a window of opportunity. If we use DL or MJ2 it will cost us $9.5k x 50% for tx and super. Trumpy has STG up and running but STG needs cash on account unlike CommSec where you pay 3 days later. Do you have any other options? If not suggest we get Brett to buy and he invoice HZL for $9.5k Any other suggestions?" 253. Roach sent text messages to Pattinson and asked "How quick can you buy 29800 shares @ 32c?" and informed Wu that he was getting "BP" to do the trade and his plan for a further trade by Jinks. Pattinson replied that he would contact his mate. 254. For some time, Roach had been discussing with Goodman the purchase of his shares by another investor. At 12.40pm, Goodman sent a text message to Roach, stating: "My stock will be put through mkt today or tomorrow. Please let me know the main things I need to see in Shanghai". At 12.45pm, Dulhunty sent an email to Roach, stating: "Questions: - Is BP with Comsec or another broker? - Have you got funds cleared into the SGB account?...electronic takes 1-2 days…need cash deposit. - Is BT available today? Here's what need....all needs to be done very quickly within the space of 10 minutes before lobsters crawl in. Step 1...within 2 minutes of each other. - Seller of 5,000 at 30c...anyone...what about Mary? - Buyer of 5,000 at 30c...non-comsec...BT, BP, St George, MW contacts. Step 2...within 10 minutes. - Buyer of 29,800 at 32c... non-comsec for the step up...but can participate in band...as above - Buyer of 5,000 at 35c...non-comsec...as above" 255. At 12.48pm, Roach forwarded Goodman's message to Dulhunty and Wu with a suggested response. At 1.20 pm, Dulhunty sent a email to to Roach and Wu, stating: "I guess so....what doing in HK? Is that to meet the Singapore investor? Is there any reason for RG to be in Shanghai other than to bother Tao to sell to RG? RESPONSE ....EYS would like to proceed at 30c which was the placement price, not the higher 35c that you asked since our meeting with them. This is at a premium to today's price of 27c. Would you like to proceed?" At 1.52pm, Roach sent a text message to Goodman proposing the sale of his shares to a particular investor, based on Dulhunty's suggestion, to which Goodman responded by asking if it was a firm bid. 256. The Offenders exchanged emails about the need to raise the price. Roach asked Dulhunty to watch the market and let him know when the trade was executed so he could action the 35c buy and Dulhunty confirmed that he would watch the market. 257. After a couple of hours Roach requested assistance from Dulhunty to move the price from 27c to 32c as "BP's mate" had been stopped from putting on the Bids and he was worried about using "DL" and "MJ" accounts as they had just purchased shares and Wu was not answering. 258. Dulhunty suggested some steps, discussed the options with Roach, watched the market and commented when nothing happened, but eventually "BP's mate" traded. 259. Andronos tried to place three Bids on his CommSec account which were rejected by CommSec. Later Andronos placed a further Bid for 5,000 Healthzone shares at 29.5 which traded with an Ask from the Frame CommSec Account. This trade increased the Healthzone share price from 27c to 29.5c and set the close. After this trade a further two Bids on this account were stopped by CommSec and did not enter the market. The closing price was 2.5c below the previous closing price of 32c. 260. After the trade Roach sent an email to Dulhunty and Wu, stating: "Underway now... Everyone so slow!" At the close of the market Dulhunty suggested that they needed further accounts where they can get the passwords and drive trades online and sent details of a number of brokers, stating: "Suggest get everyone to set up new accounts TOMORROW". Dulhunty later sent an email that set out a list of potential brokers for new trading accounts. 261. On 18 May Roach and Wu exchanged emails which discussed Roach's trading plan for that day, which involved Wu managing "RG" and the market. Roach confirmed that "BP" would buy 29,800 at 32c and Wu would have to get "DL" or someone to buy 3,000 Healthzone shares at 35c, but warned him not to leave his 4pm run too late as they were really slow. 262. Dulhunty watched the market and sent reminders to Wu setting out what he should be doing. 263. Andronos entered two Bids on his CommSec Account: one at 11:11:46 for 5,000 Healthzone shares and the other at 11:13:52 for 24,800 Healthzone shares at 32c which increased the price for Healthzone shares from (the last Andronos trade) from 29.5c to 32c. The second trade at 11:13:52 set the close. 264. After that trade Dulhunty and Wu continued to watch the market. 265. After the close Pattinson sent a text to Roach stating "$11,070.85 was the total" and Wu confirmed to Roach that he closed at 32c because the "lobsters" jumped out between 32 and 35c. 23 to 25 June 2010 266. On 23 June Dulhunty sent an email to Wu and Roach with a screenshot of the market for Healthzone shares with the subject "Shares 25c - lowest sell at 30c" to which Wu replied "What would you suggest for the SP?". 267. Dulhunty replied "Buy any amount soon at 30c which is the current selling price ...before selling price reduces" and Roach replied: "We will have to ramp want we?" Dulhunty's suggestion was: "4k at 27.5 with seller 3k at 30.0 at market" 268. Roach asked Jinks about the delay in trading, but Jinks replied that it was "Done. Waiting for confirmation", although it appears the Bid was in fact blocked by CommSec. 269. There were four Bids placed on the Frame CommSec account all of which were referred to CommSec personnel and did not enter the market. 270. Roach sent Wu an email with all the details for the Vringer ("Trumpy") Account with ETrade and said: "I will need you to drive as I will be with Norgate Here are the codes." Roach also sent a text message to Wu which said: "You will need to coordinate as I am with GN in 10 min. You would need to push Brett as he is slow. Just sent you Trumpy details". 271. The Vringer ETrade Account entered a Bid of 3,000 Healthzone shares at 27.5c which traded with an Ask from the Wang Intersuisse Account which was placed earlier that day and increased the price from 25c to 27.5c. This trade set the close. 272. Roach in an email to Dulhunty and Wu confirmed that further attempts to increase the price from 27.5c to 30c were blocked by ETrade. 273. On 24 June Wu was asked by Roach to "Please hit 30c asap before Dennis got hit on his 27.5c" but the attempts by Limbert to lodge Bids on the Limbert CommSec Account were blocked by CommSec. 274. Ultimately the Vringer ETrade Account purchased 2,000 Healthzone shares at 30c, with the the Bid trading immediately and in full, increasing the price of Healthzone shares by a further 2.5c to 30c from the last trade at 27.5c which was executed on the Vringer ETrade Account at 15:32:55 on 23 June 2010. The trade set the closing price for Healthzone shares at 30c that day. 275. Roach emailed Dulhunty and Wu and said "Done" and Wu sent a text to Roach that said "Done" and said there are new sellers at 30c to watch, which Roach confirmed. Dulhunty separately sent an email to Roach and Wu suggesting that he wanted to divest his Healthzone shares, leading to an email from Roach to Wu which stated: "Clearly RD will be just another RG". 276. On 25 June Roach sent a text message to Wu which said: "Need to get it back asap before others drop below 30c can you drive?" Wu replied "I noticed, driving it now. Will need someone to bid at 28c" and Roach replied "Get Dennis". 277. The Wang Intersuisse Account bought 20,000 Healthzone shares at 30c which traded through two price levels and increased the Healthzone share price from 26c to 30c and the last trade set the close. 278. Roach asked Wu to watch the market until the close and Wu confirmed that Healthzone shares closed at 30c. 29 June 2010 279. On 29 June Dulhunty and Roach discussed the fact that the Frame Account was closed by CommSec and Dulhunty asked how they were going with new accounts: "How going with accounts at other brokers? I reckon you need 4-5 others spread between a few places in case 1 or 2 lock up". Roach replied that they had "burnt" five accounts including Dulhunty's and had "burnt" his contacts so he did not want to "play again". THIRD PERIOD OF OFFENDING, AUGUST 2010-NOVEMBER 2011: WU AND ROACH Overview 280. In the Third Period of Offending, Wu and Roach took action whenever they deemed it necessary to create or maintain an artificial price for Healthzone shares at a level that they believed required in the circumstances. 281. Wu and Roach continued to communicate by email to monitor the price of Healthzone shares and agree on a plan to create or maintain an artificial price at the desired level. 282. They traded on their own accounts (Roach's ETrade Account 3201093; Wu's Intersuisse Account and the MGR Hub 24 Account number, 35115) as well as by using third party accounts (the Vringer ETrade Account) and using or requesting others to use third party accounts (the Wang Intersuisse Account). 283. By this stage the other third party CommSec Accounts had been closed or, as in the case of Limbert's, was about to be closed. 284. Dulhunty was no longer involved in the conspiracy or Healthzone generally, since the middle of 2010. 285. Throughout the Third Period of Offending from August 2010 to November 2011 there were 260 trades conducted pursuant to the agreement, of which 4 were wash trades, as follows: • Wu operated trading accounts in his name and the name of his company MGR, and used or asked family members to use a trading account in the name of Wei Wang, by providing trading instructions. There were a total of 194 trades, involving the purchase of 1,882,830 shares and an overall investment of $629,316. • Roach used a trading account in his name to carry out 11 trades, involving the purchase of 75,999 shares and an overall investment of $30,914. • Both Roach and Wu at various times used the Vringer ETrade Account to execute 54 trades, involving the purchase of 133,720 shares and an overall investment of $48,343. • Roach asked one other person, Limbert, to carry out one trade in this period, by giving him trading instructions, involving the purchase of 9,105 shares and an overall investment of $2,549. 286. Examples of the communications and trading for this period are set out below. 9 August 2010 287. At this time, Roach and Wu were trying to maintain the Healthzone share price in order to make Healthzone shares attractive to potential US investors at the end of a capital raise initiative. On 7 July 2010, Roach had sent an email to Wu, stating: "We need to work this again tomorrow I am going to check that 68,925 is not Roger Wells! I will put a sell order fromTrumpy at 36c and get DL to sell 2500 at 42c and see if I can get another for Trumpy of 20000 at 45c. After I check if the 32c is RW and if so he will remove by my undertaking but we will need another seller at say 33c then we need to strike early. How much fire power do you have to BUY...I know we can close the raise if I can get price to 40c = new $800k to $1.5mill". In response to Wu indicating he had $10,000 remaining, Roach stated: "We will need to have HZL allocate as some form of bonus to achieve as we need to get this price up and the capital raise closed". 288. On 9 August Roach asked Limbert to put on a Bid at 28.5c. Limbert entered a Bid for 9,105 Healthzone shares at 28c on his CommSec account which traded and the price for Healthzone shares decreased from 29.5c to 28c. Minutes later Limbert tried to put on a Bid for 2,000 Healthzone shares at 29.5, but CommSec did not enter the Bid into the market. 289. Within minutes of the trade Limbert sent a text message to Roach: "9105 @ .28 and 2000 @ .295 done as requested. = $3139.40" Roach replied: "Yes" and Limbert responded: "Done". 290. Approximately half an hour later Roach sent a text message to Limbert and asked: "Please buy the 2000 shares @ 29.5c asap" and Limbert replied: "I have". 291. At approximately 15:17:17, an Order was placed to buy 2,000 Healthzone shares at 29.5c on the Limbert CommSec Account. The order was referred to CommSec personnel and again was not entered into the market. 292. Nearly half an hour later Roach sent a text message to Wu and told him: "CommSec will not let DL get the price to return to 29.5c can you get a mate to buy back into 29.5c in the next 20 min?" and sent the same message again. 293. At 15:49:41, 4,000 Healthzone shares at 29.5c were purchased on the Wang Intersuisse Account. The trade increased the Healthzone share price from 28c to 29.5c and set the closing price for the day. 294. Minutes later Roach sent an email to Wu: "The longer we leave our price unchanged the more discontent we will suffer. It may take that $100k rush to pull up to 40c and if I can convince JO to keep his guys out of the screen we could do it for a lot less. These guys may make RG look like an angel. I don't get their 5 minute logic but clearly Healthzone shares are not meeting expectations. Any idea what the Reuter report is?" 20 to 28 September 2010 295. On 20 September 2010, Roach sent an email to Wu outlining a further strategy in relation to the Healthzone share price: "We need to get some sell profile active. Trumpy have just put another 8000 shares for sale at 0.33c that have not yet shown up but the only other two sellers are also Trumpy with 10,000 @ .35c and 15,000 @ 38c So there are only two real sellers at .29c and .28c We should leave the lower prices thin but put some larger chunks in higher prices. It has been commented to me that there is simply not a seller market for the shares which is silly because we can control that". On 24 September 2010 Jenkins sent an email to Roach and Wu which said the Healthzone share price was 26c and Roach sent an email to Wu and Jenkins that said in part: "As soon as share price back to 30c I have a buyer for $280k preserved share balance." 296. Roach sent a similar email to Jenkins and Wu on 27 September: "... I am working on the share price to get the $280k outstanding in but we keep having these low flying lobsters hit the screen. We currently have 120,000 shares sub 30c which could be cleaned out with $33k buyer but other may well back in behind them at sub 30c pricing. JB and RW are both sellers and I am guessing one of them has contacted Quam to sell their block of what they have represented as 1.5% of the Company at 25c per share. I have two buyers I am working on to take the block but it is a PITA that the very actions of JB yet again are preventing cash coming into HZL!" 297. On 28 September, at 2.38pm Jenkins sent an email to Roach and Wu with subject "Share price 26 cents" containing a screenshot of the market for HZL as at 2.37pm. At 3.06pm, Roach sent an email to Wu with subject "Shares at 25.5c... we cant let it slide!" with details of the sell profile for Healthzone, stating "We need to at least get back to .26c and better if we could mop up to say .29c or even 30c… so we can get that $280k out of O'Shea which he said as soon as price back to 30c has has a buy trigger for the balance of the preserved shares… which I have no idea what that is! Can you help with your boys?" 298. At 3.17pm on 28 September 2010 the Wang Intersuisse Account entered a Bid for 72,276 Healthzone shares at 28c, which traded through three price levels and increased the price from 25.5c to 28c. The third trade at 15:17:42 set the close. At 4.32pm, Jenkins sent an email to Roach and Wu with subject "Share price 28 cents" containing a screenshot of the market for HZL as at 4:31pm. 5 November 2010 299. Wu and Roach wanted to increase the Healthzone share price to 33c and Roach sent an email to Wu stating: "First time I have ever seen a Bot working our stock... all the 4,000 bought. This is a good thing in that we are getting on the radars of market traders but bad in that they also play games with possible short selling when opportunity arises. Could be our chance today to assist… subject to movements before close". 300. Wu replied: "Agree. Subject to the movement and profile prior to close, we should maybe aim to ramp up to 33c if possible". Wu questioned the "cost column" in Roach's email and Roach replied with an explanation and details of how much it would cost for example to get to 32c: "Cumulative cost from all price points below plus $500 to buy into each new price break. Eg. To lift to 32c will cost all 31.5c at $4,954.64 +$500.00 into the 32c seller = $5,454.64 It will cost $23,917.14 to close at 33c with no further movement today. So do we wait and hope no larger seller gather or go straight for the 33c now... the window seems now". 301. Wu replied at 12:04: "Maybe wait until around 1pm or 2pm? Who can do it? Wang is in Asia at the moment and can't locate him." 302. On 5 November 2010 at 15:51:41, 2,500 Healthzone shares at 32c were purchased on the Vringer ETrade Account. This trade increased the Healthzone shares price from 31c to 32c and set the closing price for the day. 303. At 16:06:06 Wu sent an email to Roach which said: "My one is not available this week as he's in Asia :(" to which Roach replied: "No worries…I used Trumpy to close at 32c on the back of 24 trades for 562,780 shares… we are a real stock now! The sweetest treat was closing VMT down 0.5c to 11.5c to get some cash to close Healthzone shares up 1c… that made me feel even better!" 1 December 2010 304. On 30 November 2010 at 9:10:14, the ASX released details of Roach's Chairman's address to shareholders and at 11:24:54 Healthzone released the results of the AGM. 305. At 11.13am, on 1 December 2010 Jenkins sent an email to Roach and Wu with the subject "Share price 32 cents" containing a screenshot of the market in HZL as at 11:12am. Soon after, the Wang Intersuisse Account sold 100,000 Healthzone shares and these trades moved the Healthzone shares price from 32c to 32.5c. A couple of hours later between 13:25:54 and 13:27:24 the Vringer ETrade Account purchased 25,000 Healthzone shares at 34.5c with an increase of the share price 2c to 34.5c and 5,000 at 35c with an increase of a further .5c. These trades moved the Healthzone shares price from 32.5c to 35c. 306. Roach sent an email to Wu as follows: "Time to run now... no time to lose..." with a screenshot of the current market for Healthzone shares and said: "I have taken out 25,000 @ 34.5c and 5,000 at 35c and then more dropped in at 35c. Can you take out the current 23,300 at 35c, 25,000 @ 36c and 5000, 12,000 @ 36.5c and then 5000 into the 37c? I am available to help as required. We also need to place some higher sell orders into the 40c region to build a higher profile. Please update asap as to your moves…" 307. An Ask for 15,000 Healthzone shares at 40c was entered on the Vringer ETrade Account which did not trade until 20 December 2010. 308. This was followed by a Bid for 38,300 Healthzone shares at 35c entered on the Wang Intersuisse Account which traded immediately and in full at 35c. Then an additional Bid for 3,000 Healthzone shares at 36c which traded immediately and in full which increased the price by a further 1c to 36c. 1 to 3 March 2011 309. In early 2011, Roach and Wu discussed strategies for increasing the Healthzone share price. On 6 January 2011, Roach sent an email to Wu, stating: "The spread is our daily danger zone. I am sure the next round of IR activity will again build momentum but we also need to build the Seller side with more depth and volume. The 50c is Trumpy and suggest if you can would be good to get your boys to place some volume in higher prices. The Buyers side has some stupid prices so why not the Seller side maybe even up to 60c. We saw the run up a few weeks ago to 48.5c and it would not have been possible if the Sellers profile was not providing for it..." On 14 February 2011, Roach sent an email to Wu, stating: "We need to coordinate this better…Trumpy selling and Wang buying…Albeit on large volumes". 310. On 28 February 2011 Healthzone released its half yearly results. On 1 March Roach sent an email to Wu and asked if Wang was available to buy and later another email about their US investors and said that "the yanks" would deem the half yearly results bad as the actual performance did not compare to the forecasts. He asked Wu: "….Do you think it would be worth taking out the 43c, 46.5c and eat into a small bite of 47c?. Wang could then sell down again in coming days hopefully. Or should you and I start buying and announce?........." 311. Although the Wang Intersuisse Account entered two Bids, one for 5,000 Healthzone shares at 42.5c at 10:17:11 and again at 10:17:34 for 5,000 Healthzone shares at 43c and purchased 10,000 Healthzone shares, the price went down from 43c to 42.5c. 312. Wu sent an email to Dulhunty which said: "I think it's actually much powerful if you and I start buying large chunk say 60k shares each, which will not only help the share price but further positive news to be deemed by the market? …………" 313. Following a further price decrease at 15:18:15 3,500, Healthzone shares at 42.5c were purchased on the Vringer ETrade Account. The Bid traded through two price levels and increased the Healthzone share price from 39.5c to 42.5c and set the closing price for the day. 314. After the close Roach sent an email to Wu which confirmed the "Trumpy" trade and asked about Wang as follows: "…Lots of volume but price held with a quick Trumpy buy at the end of the day. How much was Wang? Never seen the BUY side so washed out " 315. On 2 March Roach sent an email to Wu which said: "Solid Buy side now… Clearly some investors think the numbers were OK. The lobster have gather at 43c as expected but the open will clear 50,000 as BUY meets SELL at 43c I think the rest of the lobster will clear in short order. We need to keep the pressure on the shallow sellers between 43c and 48c thereafter." Later Roach sent a further email to Wu with a screenshot of the current market for Healthzone shares and said: "PITA…Low flying lobsters Any thoughts…" 316. At 15:26:05, Wu entered a Bid to purchase 200,000 Healthzone shares at 42c on his Intersuisse Account. The Bid traded through three price levels and these trades increased the Healthzone share price from 40c to 42c and set the closing price for the day. 317. After the close, Healthzone announced Richard Eu as an Alternate Director to Ian Spence and later Roach sent an email to Wu with the subject "Healthzone director bought on-market" which attached a link to a press release. 318. At 12.27pm on 3 March 2011, Roach entered a Bid for 60,000 Healthzone shares at 42c on his ETrade Account which traded at 41c and 42c and increased the Healthzone share price from 37c to 42c. Minutes later Roach sent an email to Wu and confirmed: "Just pulled back up with 60,000 shares from 37c to 42c. Need to watch closely for close". At 2.13pm and 3.35pm, Jenkins sent emails to Roach and Wu, noting the share price for Healthzone was 42 cents and then 41 cents, and enclosing the market depth for Healthzone shares. 319. On 4 March, 31 March, 4 April there were emails between Ellen Vringer and Roach about the payment of a bonus. Roach stated: "Unfortunately MW and I had to buy shares to support the market and HZL is to reimburse me but cannot be done through Gillian and MW agreed I should use the money that was double paid" Roach separately emailed Wu, suggesting the amount that he should be paid: "I would suggest $40k - $50k so it does not align with the $30k share buying and provides a little head space for support in the near future". 27 April 2011 320. Before the market opened Roach sent a text message to Wu, stating: "You should try and pull back the SP today and then you must get your 3Y lodged at close of trade. We need to be sure to only state buys in such a way that buries individual buy price." 321. Wu replied: "Ok to join 10am call, I will see how much is required to pull back the SP as I haven't topped up the account yet since the buy last week with $21k." 322. At 12:06:52 an Ask 143,400 Healthzone shares at 35c was entered on the Wang Intersuisse Account. The Ask traded immediately and in full at 35c. The trading did not move the Healthzone share price. 323. Approximately two and a half hours later Roach sent an email to Wu with the subject "SP" and a screenshot of the current market for Healthzone shares: "Anything we can do?" 324. Wu replied by a text message and said: "Maybe u can buy 23000 shares at cost of around $8245 to lift up the price to 39c. Then my 3y can be announced tomorrow and yours on Friday? Or vice versa?" 325. Roach replied: "I can only buy through St George and it will allow even a 1c increase. Can you buy now and we get a payment back to you by Friday?" 326. At 15:53:43, a Bid for 23,000 Healthzone shares at 37c was entered on the Wu Intersuisse Account. The Bid traded immediately and in part for 20,900 Healthzone shares at 35c, 36c and 37c, increasing the price of Healthzone shares by 2c to 37c, from the last traded price of 35c which was executed pursuant to the Ask entered on the Wang Intersuisse Account at 12:06:52 that morning. The trading left a residual Bid for 2,100 Healthzone shares at 37c which was amended at 15:55:55 to 2,100 at 39c, which traded immediately and in full at 39c and increased the price from 37c to 39c and this trade set the close. 327. Immediately after the trade Wu sent a text message to Roach: "Done" and Roach replied: "Into 37c can we buy 1000 shares into 39c?" 328. At 15:55:55, the residual Bid for 2,100 Healthzone shares on the Wu Intersuisse Account was amended from 37c to 39c. The residual Bid traded immediately and in full increasing the price of Healthzone shares by a further 2c to 39c from the last traded price of 37c which was executed on the Wu Intersuisse Account at 15:53:43 that afternoon. The trading set the closing price for Healthzone shares at 39c that day. 329. Within minutes of trading Wu replied to Roach and said: "I placed the order of 23000 shares on market, should lift SP to 39c" and Roach replied: "Done... Great" 330. After the close Roach sent Wu an email which said: "Send me some sort of invoice for the cost. Also do you want me to review 3Y?" and Wu replied: "I'm working on 3y now" and then Wu sent an email to Roach with an Appendix 3Y Change of Director's Interest Notice for Michael Wu dated 27 April 2011 for Roach to review. 18 May 2011 331. On 18 May 2011 at 8 am Roach sent a text message to Wu and said: "Do not respond to email re shares I just sent you. Txt only" 332. Just after 11 am Roach sent an email to Wu with the subject "SP" and a screenshot of the current market for Healthzone shares and said: "I would not be surprized to find RD is a seller. His usual response to our rejection. Have you bought yet? Maybe you can pull back by watching profile. VERY light buy side as a result. We must be very careful to get good news out soon or risk being crucified." 333. Just before 3pm Roach sent an email to Wu with the subject "Urgent" with a screenshot of the current market for Healthzone shares which said: "I bet this is RD! Just the pattern at which he works… Are you going to buy today? If so it would be good to pull back to 34c asap before there is any panic. If someone is playing with us it we will have to watch VERY closely to 4pm to see if anyone is trying to drag us back. Please let me know you are watching. Spoke with Phil Wiltshire and you and I are calling back juts after market close. I will call you first to brief you on my call. I am tied up now for 30 min." 334. Immediately afterwards Roach sent a text message to Wu and said: "Pls check my email on share price". 335. Wu replied: "Haven't bought but can buy 25k shares?" and Roach replied and said: "21024 on sell @31c and 76923 on sell @ 34c We only need to get back to 34c". Wu responded: "Maybe 22k on market then" and Roach said: "Ok" . However nearly ten minutes later Roach told Wu: "HZL Price has fallen to $0.300 18-05-11 15:34:09 Last:$0.300 Vol:437145 Trades:17." 336. A minute later Roach sent a further text message to Wu: "This is nasty SP activity please watch close closely and do what it takes as I in with Matt Jinks. If it is RD we will not win but we can't close this low". Wu replied: "Just lift up to 34c but I bet it's not RD as the sell profile is very strange" 337. At 15:43:54 on 18 May 2011, 5,000 Healthzone shares at 34c were bought on the Wu Intersuisse Account. These trades moved the Healthzone shares price from 30c to 34c. 338. Nearly a minute later Roach sent a text message to Wu and said: "Still showing 30c on screen, are you on line?" and then a further text message to Wu: "OK back to 34c" 339. At 15:56:13, 1,000 Healthzone shares at 34c were bought on the Wu Intersuisse Account. This trade did not move the Healthzone share price and set the closing price for the day. 340. That evening Wu sent an email to Roach with the subject "RE: 3Y" attaching an Appendix 3Y Change of Director's Interest Notice for Michael Ge Wu dated 18 May 2011 and asking Roach for his feedback 341. Roach replied and asked Wu: "How many did you buy today?" and Wu replied: "6000 today so that's why I put 100k in 3Y.". Roach responded: "Did your boys buy as well? What is the risk of you lodging then we lodge the EGM notice and you get a please explain from ASX?". Wu replied: "I spoke to GR re this and he advised there's no perfect solution here and the best way is for me to lodge sooner rather than later unfortunately :(." 342. Wu then clarified and said: "I mean Guy Sanderson", who was Healthzone's corporate advisor on such matters. 2 to 9 June 2011 343. On 2 June 2011, Roach sent an email to Wu, stating: "Not sure if there is any position to do anything but easy jump to 37.5c. Could be relevant to getting EYS and balance of T1 funds quickly?" On 7 June 2011, at approximately 2.30 pm Healthzone announced its application for a NASDAQ Listing and a share issue with increased investment to 19.9% by Eu Yan Sang. 344. Roach sent an email to Wu: "I am not sure how you are positioned with Wang and trading but if we could close today at 38c or higher it would be a big positive for completion of the balance of T1 and T2. It would cost $26k to close at 38c and $45k to close at the magic 40c. It would also be a big boost for us with CBA to see such a supportive market. HZL can pay Wang back or Wang can exit in coming weeks as we push the price. What do you think? Peter 0.36 30769 $11,076.84 0.37 15384 $ 5,692.08 0.375 23554 $ 8,832.75 0.38 25000 $ 9,500.00 0.39 20000 $ 7,800.00 0.395 5000 $ 1,975.00 0.4 112498 $ 200.00 $45,076.67" 345. At 14:53:55, a Bid for 71,000 Healthzone shares at 37.5c was entered on the Wang Intersuisse Account. The Bid traded immediately and in part through three price levels for 69,707 Healthzone shares, increasing the price of Healthzone shares from 35c to 37.5c. The trading left a residual Bid for 1,293 Healthzone shares at 37.5c which traded at 14:54:09 in full at 37.5c. The trading of the residual Bid did not move the price of Healthzone shares. 346. Roach sent a text message to Wu: "Is Wang buying or someone else?" and Wu replied: "Wang" and Roach responded: "For a moment I thought we may have had some REAL support:(" 347. Wu replied: "Agree and hopefully the support will come from US upon finish the nasdaq" and Roach responded: "Sure... Agree he has been very supportive:)" and Wu replied: "He's happy to get into it now to close at 38c. we do need to compensate him" 348. At 20:00:12 on 8 June 2011 Roach received a text message from John O'Shea (US European American Equities): "With the stock at .34. It make sense to see if maybank will buy in first round." 349. Roach sent the text message to Wu and said: "This from JO... With the stock at .34. It make sense to see if Maybank will buy in first round. JO" 350. Roach sent a further text message to Wu: "Can't believe JO wants us to do all the work and he gets the commission! He gets $140k on EYS and now he wants us to do the second $2mill of T1 on our own and he gets another $100k plus his $40k retainer and $40k advisory = $320k and he has done nothing! He seems to have given up before he starts! This share price is going to cause us issues..." 351. Wu replied: "that's bad!...it's typical JO like last time (didn't really prepare and get fired up until last minute)...you may want to have a heart-to-heart talk with him?" 352. At 08:39:05 on 9 June 2011 Roach sent an email to Wu with the subject "Early sceen? negative" with a screenshot of the current market for Healthzone shares and said: "This is a worry… seller at 33c x 100,000 so clearly a large holder dumping. Hopefully it gets taken out early and we can immediately work to pull back with smaller trades. We will need to manage this process very tightly during the next month. We also need to get our next announcement out this morning. We can legitimately pump price subject to sell profile. The EGM one may then be deemed negative and I think my own will need to go in short order thereafter. Thoughts?" 353. Wu sent an email to Roach which said: "I think the timing gap of M&A announcement and EGM notice should not be too wide, maybe within a day with hope the positive/negative effects will cancel each other? Then follow by yours shares purchase announcement (3Y and maybe short announcement in words format) before the weekend? The bottom line is, regardless of which plan we play, I think we do need to prepare to jump on the market and buy some or large quantity on screen anyway. I think once it's settled down within a day or two, it'll be back to normal like previous as I think the sellers (due to EGM) might only be short-term pattern (ie.1 or 2 days)." 354. Roach replied with a screenshot of the current market for Healthzone shares: "Agree…Looks like the old "drag the price low then build the chunky steps trick" is in play with someone seeking to exit some large chunks. I am just doing a final edit of today's release now for your signoff and then we lodge." 355. Roach sent an email to Wu with the subject "Strategy... thoughts?" and a screenshot of the current market for Healthzone shares: "Easy back to 35c but we have two options when the announcement goes up. 1. Buy back too high as possible subject to screen profile a. 60,000 block at 35c is a PITA 2. Wait and see how market reacts and seller or buyer profile changes. a. This will be risky if low sellers deepen up" 356. Wu replied: "I reckon at least we bring it back to 35c as step 1 (ie. With 5000 shares) then wait and see the reaction when announcement is released." Roach responded: "OK… but will need to watch close from lodgement" 357. On 9 June 2011 at 2 pm Healthzone announced that it had reached agreement in relation to the acquisition of a majority shareholding of Forte Brands, the development of new brand products and retail growth of company stores and Healthy Life China. 358. After the announcement Wu sent an email to Roach: "Let's see what happens after lodgement." Roach replied: "60,000 seller moved up to 36c from 35c but now a 10,000 lobster at 33c Suggest we pull back to 36c asap" 359. About an hour and a half later Wu replied to Roach: "Can't locate Wang today as he's on road to Melbourne...anyone from your end could action?" and minutes later Wu said: "Left msg for Wang to ring me back." 360. Roach replied: "I only have Trumpy and any buy that raises the price is rejected! We really need to get it up before close and the USA wakes up..." 361. At 15:40:03, a Bid for 14,000 Healthzone shares at 34c was entered on the Wang Intersuisse Account. The Bid traded immediately and in part through two price levels for 13,000 Healthzone shares, increasing the price of Healthzone shares from 33c to 34c and leaving a residual Bid for 1,000 Healthzone shares at 34c on the Wang Intersuisse Account. 362. After the trade Wu replied: "It's working now." 363. At 15:46:48, the price of the residual Bid for 1,000 Healthzone shares at 34c on the Wang Intersuisse Account was amended up to 35.5c. The amended Bid traded immediately and increased the price of Healthzone shares by a further 1.5c to 35.5c from the last traded price of 34c set by the trading on the Wang Intersuisse Account at 15:40:03 that day. The trade set the closing price for Healthzone shares that day. 364. Following the trade Wu sent a text message to Roach: "Done but I noticed a block of 55k shares at 35.5c n Wang only hit at 35.5c?" and Roach replied to Wu: "Any close that is up is good 35.5c good result." 21 to 22 July 2011 365. An email dated Thursday 21 July 2011 with a time of 12:47 pm was sent from Todd Rowley (a US investor) to Roach with the subject "Antoine". The email said: "Peter, I spoke to Antoine today, it seems he is hesitant at the moment. I will likely need to circle back when he returns Friday as tomorrow is a Belgian holiday." 366. Roach replied by email and said: "Todd Thank you for the follow-up. Was there any specific or obvious cause for his hesitation that may be addressed? I again appreciate your support and would value you follow-up again as you suggest." 367. Todd responded "The hurdle is the stock price isnt .38....if it were he would likely participate without hesitation." 368. At 02:14:58 on 22 July 2011 Roach forwarded the email from Todd to Wu: "This is immediate $500k with SP roadblock:( What can we do today? We really need to close at 38c everyday to close this offering. The deal is on the nose because we are selling above the current SP." 369. Wu replied: "Let's see today's profile but in last 2 days, there was a block of 130k shares at 37.5c and my boy could only hit 37.5c" 370. At 15:45:52, a Bid for 17,000 Healthzone shares at 37.5c was entered on the Wang Intersuisse Account. The Bid traded immediately and in full through two price levels increasing the price of Healthzone shares by 0.5c to 37.5c, from the previous trade at 37c which was executed on the Wang Intersuisse Account at 14:05:58 on 20 July 2011. The trading set the closing price for Healthzone shares at 37.5c that day. 371. After the trade Sekely sent an email to Wu and copied to Wei Wang: "Gentlemen - This is to advise that after buying 17000 Healthzone shares today the outstanding balance of W Wang Account is $11753.Please settle within trade + 3 days" 9 to 10 August 2011 372. In July and August 2011, a private investment company in the United States, Renn Capital Group Inc (Renn Capital), conducted due diligence in relation to a possible investment in Healthzone. At 12:36:54 on 9 August 2011 Roach sent an email to Wu with the subject "Important" and a screenshot of the current market for Healthzone shares: "Very dangerous position and need to be ready to respond… No buyer support and 4 low flyers. We will be in CBA meeting from 3pm to 4pm so must have a watch kept. Renn is going to Committee in 12 hours on the market close of today to decide progress and amount so there has not been a more critical day to close at 36.5c or higher Robert just text saying call went well and Eric just ticking boxes for tomorrow's meeting and wanted to know more about EYS relationship and history with HZL. Robert said he gave us a good wrap." 373. Approximately an hour and a half later Roach sent a further email to Wu with the subject "Disaster recovery required..." and a screenshot of the current market for Healthzone shares "May need steps… let me know and I can place on sell some of Trumpy's shares" 374. At 14:12:36 a Bid for 4,000 Healthzone shares at 31c was entered on the Wang Intersuisse Account. The Bid traded immediately and in full increasing the price of Healthzone shares from 28c to 31c. 375. At 14:37:41 an Ask for 2,000 Healthzone shares at 33.5c was entered on the Vringer ETrade Account which traded after about 20 minutes. This trade increased the price of Healthzone shares from 33c to 33.5c. 376. At 15:37:35 a Bid for 29,000 Healthzone shares at 35c was entered on the Wang Intersuisse Account. The Bid traded in part at 15:37:35 and in full at 15:37:56 after the residual was amended to 35.5c. The trade at 15:37:35 decreased the price of Healthzone shares from 33.5c to 32.5c. The trade at 15:37:56 increased the price of Healthzone shares from 32.5c to 35.5c and set the closing price for Healthzone shares that day. 377. At 08:58:41 on 10 August 2011 Roach sent an email to Wu with the subject "today" and a screenshot of the current market for Healthzone shares: "Also serious buy side volume is likely to be FIM. Anything that trades through Citicorp Nominees could be considered FIM. We need to pull to 38c asap if opportunity like exists now. RENN have asked me to call them Wed Dallas time (it is 4pm Tue Dallas at present) and they are just going into their committee meeting now." 378. Wu replied and said: "Did FIM participate T1/T2? Why they would rather buy on market instead of capital raise?" 379. Greg Lidicky at Intersuisse sent an email to Wang and copied to Wu: "Good Morning Mr Wang, I have included the total buy amount for Healthzone shares and your BPAY details for you below, could you please forward the BPAY receipt number when possible. Total amount: $13,341.54 Biller Code: 464123 Client Ref: 00084907112". 380. Just after 3 pm Roach sent an email to Wu with the subject "Close today" and a screenshot of the current market for Healthzone shares: "4,500 shares would get us back to 37c? JO words are it would show the shares have "character"" 381. At 15:50:16, a Bid for 4,500 Healthzone shares at 37c is entered on the Wang Intersuisse Account. The Bid traded immediately and in full through two price levels increasing the price of Healthzone shares from 36c to 37c and setting the closing price for Healthzone shares that day. 382. Later that evening Wu sent an email to Roach: "..Did you get my text message? Got a headache with Wang now." 16 August 2011 383. At 13:55:48 Roach sent an email to Wu: "Best to keep our email out of HZL server. When I type my CCR email extra special need. The comparison is between 30 min apart today not over two days. I have just managed to get 1500 shares through Trumpy at 36c and hopefully it has bumped the BOT for 10 min now no BOT sales. It is a computer and gets thrown when buying heads upwards while selling down. But let's watch carefully for the close." 5 October 2011 384. At 12:03:47, a Bid for 700 Healthzone shares at 30c was entered on the Vringer ETrade Account. The Bid traded immediately and in full increasing the price of Healthzone shares from 29c to 30c. 385. Between 12:18:57 and 13:14:41 a total of 24,700 Healthzone shares were bought on the MGR Hub 24 Account. The trade at 12:18:57 did not move the Healthzone shares price. The trades at 13:14:41 increased the price of Healthzone shares from 30c to 31c. 386. At 12:21:59 Wu sent an email to Sekely: "Hi Andrew,Sorry about the late reply but Mr.Wang's PA advised me the account has now been cleared and I will email you the payment advice later today." 387. At 12:48:04 Roach sent an email to Wu with the subject "SP" and a screenshot of the current market for Healthzone shares. 388. At 13:45:32, a Bid for 550 Healthzone shares at 32c was entered on the Vringer ETrade Account. The Bid traded immediately and in full increasing the price of Healthzone shares from 31c to 32c. 389. At 15:34:48, 34,450 Healthzone shares at 32c were bought over two trades on the MGR Hub 24 Account. These trades did not move the Healthzone shares price and were the last trades of the day. The second trade set the close. 390. Due to the trades on the Vringer ETrade Account and the MGR Hub 24 Account the price for Healthzone shares moved from 29c to 32c. 391. Between 6 October 2011 and 16 November 2011, Roach and Wu continued to communicate about the Healthzone share price and there were further Buy and Sell orders placed on the Vringer E*Trade Account. 17 November 2011 392. On 17 November 2011, Healthzone was placed in external administration.

THE ACTIONS OF RUSSELL GOODMAN

1. Russell Goodman ("Goodman") was an investor in Healthzone. His involvement in the trading of shares in Healthzone, and the conduct he exhibited towards each of the present offenders, were matters upon which senior counsel for each offender applied considerable focus in the course of their respective submissions. In short, it was submitted that Goodman's activities constituted an important part of the context in which the offending occurred, and served to significantly mitigate its seriousness. It is therefore necessary for me to summarise some of the evidence as to Goodman's involvement. In doing so, I have incorporated references to a 70 page document tendered in the proceedings and referred to as "Annexure A", the entirety of which I have read, and to which I was taken at length, particularly in the course of submissions made on behalf of Dulhunty.
2. Goodman first approached Wu in early October 2007 offering to market Healthzone shares to investors. Following discussions between Goodman and Dulhunty, it was resolved that 10 million shares would be issued to Goodman, at 60c per share. This occurred in December 2007. From time to time Goodman thereafter encouraged both offenders to buy shares in order to demonstrate their confidence in Healthzone (Facts at [75]; Annexure A at [25]).
3. On 30 December 2007 Goodman sent an email to Dulhunty (Annexure A at [84]) stating: "Try 75c. Would love to see some Directors buying … I will look after the share price if you look after the profits".
4. On 18 January 2008 Goodman sent a further email to Dulhunty (Annexure A at [87]) stating: "If you guys really believe in the company today is the day to step in or for friends to step in before my placement people lose faith. I'm back on Tuesday needs to close at 70 or better".
5. By March 2008, Goodman was expressing his concern about Healthzone's operations and was seeking a greater involvement in formulating the company's general direction (Facts at [87]). On 5 March 2008 Dulhunty reported that Goodman had said that he would "need to smack down the HZL share price to 40c" (that price being 35% below the opening price of 62c). Dulhunty also reported that Goodman wanted a seat on the Board (Annexure A at [104]).
6. On 7 March 2008 Goodman wrote to Roach and Dulhunty (Annexure A at [107]) stating: "The key, as I see it, is to keep me, plus my investors, happy, to get the share price as high as possible by 8 October 2008 when the cash or stock is to be issued to the Health Minders vendor".
7. In July 2008 Goodman continued to express his dissatisfaction at what he perceived to be a lack of consultation in relation to the operations of Healthzone. He warned of possible sell orders at a low price. In this context he made arrangements for a meeting to take place to discuss a possible merger between Healthzone and a business known as Athlete's Foot (Facts at [113]). That merger did not proceed.
8. By September 2008 the relationship between Healthzone and Goodman had deteriorated further. The price of shares in Healthzone had dropped to 36c (Annexure A at [145]). Dulhunty was expressing concern that Goodman was intending to place sell orders at a low price (Facts at [114]).
9. On 2 September 2008 Goodman sent an email to the present offenders, again expressing his concerns and asking for a seat on the Board of Healthzone. He also suggested that the merger with Athletes Foot should be considered. He again encouraged the directors of Healthzone to purchase shares. He predicted a further drop in the share price (Facts at [115]; Annexure A at [148]).
10. On 10 September 2008 an associate of Goodman sold 18,971 shares in Healthzone at 36c. Goodman urged Dulhunty to purchase a small parcel of shares (Annexure A at [152]).
11. On 1 October 2008 Goodman again expressed his dissatisfaction with Healthzone's operations, and repeated his request for a seat on the Board. He advised that he would otherwise divest himself of the company's stock (Facts at [119]; Annexure A at [163]). On 3 October 2008, in circumstances where the previous closing price of Healthzone shares was 55c, Goodman placed 1 million shares for sale at a price of 42c (Facts at [119]).
12. On 13 October 2008 Goodman confirmed his intention to exit Healthzone and advised that he would offer around 9 million shares to the market. Between 15 October and 23 October he placed 8.4 million shares for sale at 49c. The share price dropped from 55c to 35c. On 27 October Goodman amended the ask to 184,000 shares and dropped the ask price from 49c to 29c, which was 6c below other asks. On the following day he sent an email to Wu and Dulhunty, the general tenor of which was to suggest that Healthzone shares were worth little (Facts at [119]-[123]; Annexure A [176]-177]).
13. In November 2008 Goodman expressed further concerns about Healthzone's operations. The offenders discussed their own concerns about Healthzone's falling share price in light of Goodman's decision to sell (Facts at [134]).
14. On 5 November 2008 Goodman wrote to Wu (Annexure A at [193]) stating that the price of Healthzone shares had gone only "one way" and that Healthzone had some "major credibility issues". He went on to state: "As much as you hope that one day it will be a great company, I really suggest you speak to me about how to speed up that process and derive the wealth it could create for you and your family in the future".
15. In early December 2008 Goodman corresponded with Dulhunty and expressed interest in acquiring a larger stake in Healthzone. At the same time he indicated that he wished to sell his shares, and was suspicious that the market for Healthzone shares was being manipulated (Facts at [157]-[161]).

THE OBJECTIVE SERIOUSNESS OF THE OFFENDING

1. Section 16A of the Crimes Act 1914 (Cth.) ("the Act") sets out a series of matters to which the Court must have regard when passing sentence. In terms of assessing the objective seriousness of an offence, these matters include: 1. the nature and circumstances of the offence (s.16A(2)(a)); 2. if the offence forms part of a course of conduct consisting of a series of criminal acts of the same or similar character - that course of conduct (s.16A(2)(c)); 3. the personal circumstances of any victim of the offence (s.16A(2)(d)); and 4. any injury, loss or damage resulting from the offence (s.16A(2)(e)).

Submissions on behalf of Crown

1. The Crown submitted that the principal factors relevant to an assessment of the objective seriousness of the offending in the present case included: 1. the nature and scope of the conspiracy; 2. the overt acts of the offenders, to the extent that those overt acts were indicative of the content and duration of the conspiracy; 3. the extent to which the conspiracy was an ongoing enterprise that encompassed multiple or continuing criminal objectives; 4. the extent to which the objects of the conspiracy were achieved; 5. the role, and involvement within the conspiratorial organisation, of each offender; 6. the period of the conspiracy; and 7. the period of the involvement of each offender as a participant.
2. With these matters in mind, the Crown pointed to the fact that the conspiracy in the present case extended over a period of several years and involved: 1. multiple trades; 2. the utilisation, by each offender, of a number of separate trading accounts; 3. the involvement of third parties; 4. the purchase of a large amount of shares; and 5. a significant overall monetary investment.
3. It was submitted that the conspiracy was one that had, as its principal objective, the manipulation of the Healthzone share price. The Crown pointed to the overt acts in which the offenders engaged and submitted that such acts were planned, calculated, sophisticated, designed to avoid detection and carried out in circumstances where each offender knew that what he was doing was against the law. It was submitted that even if it were accepted that neither offender was motivated by a desire to derive an immediate profit (a matter which the Crown did not concede) it remained the case that each of them had a significant financial and personal interest in Healthzone which they each sought to support through their criminal activity.
4. In terms of the involvement of each individual offender, the Crown pointed to the fact that Dulhunty was part of the conspiracy for a period of three years and one month during which there were 377 trades involving the purchase of 1,797,424 shares at an investment of $679,475.00. It was pointed out that Dulhunty personally executed at least 157 of these trades, involving the purchase of 675,500 shares at an investment of $263,359.00. It was also pointed out that Dulhunty had the log-in details of a number of third party trading accounts through which 83 trades, involving the purchase of 397,830 shares at an investment of $128,938.00, were conducted.
5. The Crown submitted that Dulhunty's activities included monitoring the Australian Stock Exchange on a daily basis, calculating the time at which action should be taken, assessing the volume of trades and the price at which those trades needed to be carried out, and arranging for their execution. It was submitted that Dulhunty was also the principal advocate for opening new trading accounts in the names of third parties to allow the manipulation of the share price of Healthzone to continue without detection.
6. The Crown submitted that Roach was part of the conspiracy for a period of approximately three years, during which there were 495 trades, involving the purchase of 3,442,577 shares at an overall investment of $1,153,968.00. It was pointed out that Roach personally executed, or alternatively arranged for third parties to execute, at least 63 trades, involving the purchase of 385,837 shares at an investment of $137,915.00. It was pointed out that Roach had log-in details for, and used, third party trading accounts which were responsible for 137 trades involving the purchase of 531,550 shares at an investment of $177,281.00.
7. It was submitted that once he had joined the conspiracy, Roach worked closely with Dulhunty. It was submitted that Roach largely assumed Dulhunty's role when the latter left the conspiracy, and that Roach was instrumental in setting up new trading accounts and contacting third party associates for the purposes of conducting trades.
8. The Crown submitted that the principal point of distinction between the offenders, in terms of their roles and level of involvement, was that Roach joined an existing conspiracy which had been devised and implemented by Dulhunty and Wu. The Crown submitted that there was otherwise no material difference between the two offenders, be it in terms of the extent of the positions of seniority that each of them held, or the control that each of them exerted in carrying out the conspiracy.
9. The Crown described as "unprecedented" the duration and extent of the collusion and co-ordination which existed between the offenders, and the level of corporate control and seniority at which each of them operated. The Crown went so far as to submit that even if it were found that the offenders were not motivated by the desire to derive immediate personal reward or profit, this was not a factor which mitigated the offending.
10. For all of these reasons the Crown initially submitted that I should conclude that the objective seriousness of the offending was in the worst category. Ultimately however the Crown's position shifted slightly, to the point where it was submitted that the offending approached, rather than fell into, such category.

Submissions on behalf of Dulhunty

1. Senior counsel for Dulhunty accepted that the offending was objectively serious but submitted that in view of a number of factors it did not even approach, much less reach, the worst category.
2. Senior counsel submitted that in acting as he did, Dulhunty was not motivated by a desire for immediate profit and was in fact motivated by the desire to act in what he thought were Healthzone's best interests. In this context, senior counsel pointed to the fact that Dulhunty had worked extremely hard to build and develop Healthzone. It was further submitted that Dulhunty's offending stemmed from a genuine belief that the company was undervalued and that these factors differentiated the present circumstances from a "typical" case of market manipulation. It was submitted that these factors, without more, removed the present case from the worst possible category of offending.
3. It was submitted that the objective seriousness of the offending was further lessened by the fact that: 1. Healthzone was (in relative terms) a small company, such that the potential damage to the market as a whole, or to investors in the company, was negligible; 2. the offending did not include the purchase of shares at a price which exceeded their intrinsic value; 3. this was not a case where shareholders had been misled by buying or selling without proper information being provided to them; and 4. no false names or other methods of obfuscation were used.
4. Senior counsel for Dulhunty placed considerable emphasis upon the role played by Goodman. He variously described Goodman's behaviour as "predatory", "bullying", "threatening", "aggressive", "highly coercive" and carried out in "bad faith". Senior counsel described as "surprising" the fact that Goodman had not been charged with any offence, although I should say that surprising or not, the fact that Goodman was not charged does not bear upon my assessment of the objective seriousness of the offending, nor upon the sentencing exercise generally. Senior counsel submitted that the evidence established that Goodman had repeatedly put pressure upon the Directors of Healthzone to purchase shares, and that the entirety of his conduct was directed towards positioning himself to be able to take over Healthzone at minimal cost.
5. Senior counsel submitted that Goodman's behaviour provided a substantial part of the context in which the offending took place, and that such context was a matter of significant mitigation. In essence, it was submitted that the pressure under which the Directors of Healthzone were placed by Goodman played a considerable part in the offending. Whilst senior counsel accepted that it was not justifiable for Dulhunty to succumb to pressure by engaging in serious criminal offending, he submitted that in all of the circumstances Dulhunty effectively had no alternative other than to do what he did. All of these matters, it was submitted, rendered the offending far less serious than had been suggested by the Crown.

Submissions on behalf of Roach

1. Senior counsel for Roach also submitted that the role played by Goodman constituted an important factor which served to distinguish the present case from other cases of market manipulation. He too submitted that this factor, as well as a number of others, removed the case from one which approached the worst category. In these respects senior counsel for Roach effectively adopted the submissions made on behalf of Dulhunty.
2. Senior counsel submitted that properly understood, the scope of Roach's offending was not nearly as extensive as had been submitted by the Crown. It was pointed out, in particular, that Roach had joined an existing and operative conspiracy, as opposed to being responsible for its foundation and initial implementation.
3. Senior counsel submitted that Roach had no previous experience in managing, or being on the Board of, a publicly listed company. He pointed out that Roach had no tertiary education qualifications or formal business education, had only previously been involved in small family companies, and had not, prior to this offending, traded in shares in a public company. Whilst acknowledging the caution to be exercised when evaluating an offender's criminality in a conspiracy by examining the individual physical acts of each conspirator, senior counsel for Roach submitted that it was nevertheless relevant that Roach was involved in what was a relatively small investment when compared to the total sum expended during the entire conspiracy.
4. Senior counsel also submitted that the damage to the share market brought about by the offending was negligible for a number of reasons. Firstly, he submitted that Healthzone was a small company. Secondly, he submitted that the majority of the share trades conducted during the period of Roach's involvement in the conspiracy resulted in a minimal change to Healthzone's share price. Thirdly, it was submitted that where trades were made to counter trades deliberately designed to damage the share price, there was no damage to the market.
5. Senior counsel submitted that ultimately s. 1041A was directed towards the promotion of public confidence in the fairness and honesty of markets for financial products. It was submitted that Roach's offending had a negligible effect upon undermining public confidence in the share market, and a similarly negligible effect upon the market's integrity. Whilst it was acknowledged that it was possible for investors or potential investors to have made decisions about purchasing or retaining Healthzone shares based on the market price of the shares which had been manipulated, it was submitted that the risk of potential loss to investors or potential investors was in fact quite limited in light of the fact that Healthzone shares were not heavily traded.
6. Whilst generally accepting that as a consequence of his offending Roach may have stood to benefit financially in an indirect way, senior counsel emphasised that the offending was not motivated by immediate financial profit or gain. It was submitted that this was a matter which significantly reduced Roach's moral culpability, and that it operated to further remove this case from the worst category of offending.
7. Senior counsel for Roach further submitted that the conspiracy was not a particularly complex one, and was sophisticated only to the extent that it involved the use of multiple trading accounts, some of which were operated by others. It was pointed out that all of these accounts were operated by real persons or entities. It was also pointed out that Roach had not attempt to hide his offending by, for example, destroying correspondence or hiding evidence of trades which had been made.

Crown submissions in reply

1. In submissions in reply, the Crown took issue with the proposition that either offender was motivated by a desire to act in what were thought to be the best interests of the company. It was submitted that there was simply no evidence of what it was that motivated either offender. It was further submitted that on any rational view, manipulating the share price of a publicly listed company was not something that could possibly be regarded as being in that company's best interests.
2. The Crown also took issue with the significance which was sought to be attached by each offender to the conduct of Goodman. It was submitted that although Goodman was, at times, aggressive towards one or other of the offenders, his conduct was simply consistent with that of a person who was becoming increasingly frustrated at the operation and direction of a company in which he had significant financial interest. It was submitted that in the absence of sworn evidence from either offender, the documentary evidence, including Annexure A, exhibited little more than extreme annoyance, and periodic anger, on the part of each of the offenders towards Goodman. It was also pointed out that in the case of Dulhunty, his participation in the conspiracy commenced before Goodman's involvement and that in these circumstances, Goodman's actions could not provide an excuse for, or an explanation of, Dulhunty's offending. Ultimately, the Crown submitted that Goodman's conduct was of little significance and that irrespective of how Goodman had acted at any time, each offender obviously had available alternatives which did not involve criminal offending.

Consideration

1. Where a sentencing judge is asked to take into account matters in favour of the Crown on sentence, such matters must be established beyond reasonable doubt. Matters sought to be taken into account in favour of an offender must be established on the balance of probabilities: R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at [27] per Gleeson CJ, Gaudron, Hayne and Callinan JJ, citing R v Storey [1998] 1 VR 359 at 369. In the present case, neither offender gave sworn evidence. That was their right, and it is something from which I draw no adverse inference whatsoever. However the practical consequence is that I am left to determine the various issues which have been raised on the basis of the documentary evidence which has been tendered.
2. Foremost amongst the issues raised is the conduct of Goodman, and its effect upon the offenders. It is evident from the correspondence that Goodman was someone who, to say the least, took his investment in Healthzone seriously. He had an obvious interest in the proper conduct of the company's operations. He developed an unfavourable view of those operations. He developed a similarly unfavourable view of Healthzone's direction generally, and the abilities of those who were guiding it. Clearly, he thought that he was far better placed to guide the company's operations. He repeatedly sought a seat on the Board. His correspondence reflects all of these matters. Such correspondence also reflects Goodman's general contempt for, and anger and aggression towards, the offenders.
3. I am satisfied that each of the offenders was concerned about Goodman's behaviour, about his underlying motivation, and about the overall effect that those matters might have on Healthzone. I am also satisfied that each offender is likely to have felt threatened by the tone of Goodman's correspondence on occasions. To this extent, Goodman's conduct provides part of the context in which the offending occurred.
4. However I am not satisfied, in the absence of sworn evidence from either offender, that the effect, upon either of them, of Goodman's conduct extended beyond that which I have described. I am therefore not satisfied that Goodman's conduct has the significance for which senior counsel for each offender contended. Even if one accepts, in a general sense, the nomenclature adopted by senior counsel for Dulhunty to describe aspects of Goodman's behaviour, it was no answer for either offender to respond to that behaviour by engaging in serious criminal offending. It goes without saying that there were alternatives available.
5. Moreover, in the case of Dulhunty, his participation in the conspiracy commenced before Goodman became involved. Goodman's first approach to Healthzone came on 9 October 2007 (Facts at [75]). As early as 5 May 2007, some 5 months before, Dulhunty had written to Wu setting out reasons for taking steps to increase the price of Healthzone shares (Facts at [63]). Further, in a statement tendered to the Court, Dulhunty expressly conceded that "there were times that (he) engaged in improper trading for other than defensive strategies". In these circumstances, the significance of Goodman's conduct is even less in Dulhunty's case.
6. As previously outlined, it was submitted that neither offender was motivated by the desire for immediate personal profit, and that each of them was motivated by what each regarded as the best interests of Healthzone. The circumstances of the offending were such that it was not likely to produce any immediate profit to either offender. It was not offending which was committed, for example, in response to a margin call. In these circumstances I am prepared to accept that immediate monetary gain or immediate personal profit did not form part of the motivation of either offender. That said, the maintenance of a high share price would obviously have been likely to produce some benefit to each offender over time and I am satisfied that this formed part of the motivation of each offender.
7. Each offender is an educated and obviously intelligent person. I do not accept the proposition that either of them could possibly have thought that deliberate and sustained criminal conduct which saw Healthzone's share price being artificially manipulated was in the best interests of the company. Moreover, even if either or both of the offenders held a view that Healthzone's share price should have been greater than what it was, that is largely irrelevant. The fact is that each was a party to an agreement to manipulate that price.
8. The offending was sustained over a considerable period. It involved multiple trades worth substantial sums of money. The conduct of each offender was calculated and planned. However I do not consider that the conspiracy was particularly sophisticated. Trading accounts which were used were held by real people or entities and to this extent, there was no deliberate obfuscation by, for example, setting up accounts in false names. That said, and as set out in the facts, some of those trading accounts were closed down. The response of the offenders to that circumstance was to move swiftly to ensure that new accounts could be set up, so as to allow the offending to continue without detection (see Facts at [279]).
9. Although each offender was involved in the conspiracy at a different time, the overall period of the involvement of each of them was broadly the same, as was the role that each of them played. The Crown highlighted the fact that some difference arose from the fact that Roach joined an existing conspiracy, whereas Dulhunty was involved (with Wu) at its inception. Whilst that is strictly correct, I am not satisfied that Dulhunty in fact devised the conspiracy in the first place. In all of the circumstances, there is nothing to differentiate between the level of participation of each offender in the conspiracy, or the period over which that participation took place.
10. I accept that there is no evidence which establishes the effect, if any, of the offending conduct on the stock market overall. Whilst that is a relevant consideration, s. 1041A of the Corporations Act 2001 is, by its terms, directed towards the prohibition of transactions which have, or are likely to have, the effect of creating an artificial share price, or the effect of maintaining that price at an artificial level. That is precisely the conduct to which the present conspiracy was directed. Moreover, even in the absence of evidence that the present offending had any direct adverse effect upon the market, it remains relevant to observe that members of the public who trade in shares are obviously entitled to do so in circumstances which are fair and transparent. The stock market is an indispensable component of the economy of this country. Amongst other things, it serves as a barometer of consumer confidence, and of the country's financial state. It is essential that the market be allowed to operate, at all times, openly, and in a way which engenders confidence, not only in the minds of those who trade in it, but in the minds of the members of the wider community. Manipulative behaviour which distorts, or which threatens to distort, market integrity necessarily strikes at the heart of all of those considerations.
11. In R v Jacobson [2014] VSC 592 Kaye J put the matter in this way (at [41]): "The express objective of s 1041A of the Corporations Act is to promote a fair, orderly and transparent market for registered securities. As part of that objective, s 1041A is directed to ensuring that the market price for registered securities truly reflects the genuine interaction of the forces of supply and demand for those securities on a free market".
12. In the present case, the share price of Healthzone did not, as a consequence of the offending, reflect the genuine interaction to which his Honour referred.
13. Like that of the offender in Jacobson, the conduct of the present offenders was calculated to undermine the objectives of which Kaye J spoke. It was sustained offending and occurred over a significant period of time. It had the capacity to threaten the integrity of, and public confidence in, the stock market, and to cause damage to members of the community who had invested their savings into that market. For his part, Dulhunty expressly acknowledged this in his statement to the Court, in which he accepted that his offending had "jeopardised the integrity of our financial market".
14. As a result of the offending in each case, dealings in Healthzone shares were other than open and transparent. The price of the shares was manipulated and distorted.
15. In all of the circumstances, and although I am unable to accept the Crown's submission that the offending in either case falls into, or approaches, the worst possible category, it was nevertheless of considerable seriousness.

The relevant statutory provisions

1. I have already noted that s. 16A of the Act sets out a number of factors which the Court is required to take into account when sentencing a Federal offender. From the point of view of an offender's subjective case, those factors include: 1. the degree to which the offender has shown contrition for the offence, either by taking action to make reparation for any injury, loss or damage resulting from the offence, or in any other manner - s. 16A(2)(f); 2. the plea of guilty - s. 16A(2)(g); 3. the degree to which the offender has co-operated with law enforcement agencies in the investigation of the offending, or of other offences - s. 16A(2)(h); 4. the character, antecedents, age, means and physical or mental condition of the offender - 16A(2)(m); 5. the offender's prospects of rehabilitation - s. 16A(2)(n); and 6. the probable effect that any sentence or order under consideration would have on any of the offender's family or dependants - s. 16A(2)(p).
2. It should be noted that the matters in s. 16A do not constitute an exhaustive list of relevant factors. As outlined below there are factors falling outside the provisions of s. 16A which are relevant in this case.

Evidence tendered on behalf of the offender Dulhunty

1. Senior counsel for the offender Dulhunty tendered a large volume of subjective material. That material included a statement of 19 October 2015 of the offender, addressed to the Court, which canvassed (in part) aspects of the offending to which I have previously referred. In that statement, Dulhunty expressed his deep contrition for his offending and described his life as having been destroyed by it. He pointed to the loss of his business, life savings, career, marriage and reputation, and expressed a firm resolve not to re-offend in the future.
2. Also tendered was a report of Dr Olav Nielssen, Psychiatrist which sets out, amongst other things, Dulhunty's background. He attended Sydney Grammar Preparatory and High Schools. Following completion of the Higher School Certificate, he studied accounting and became a Chartered Accountant. He subsequently completed a Masters of Business Administration and a Law Degree. He married in 2001. He reported to Dr Nielssen that his marriage had since failed. He has two children, aged 7 and 9.
3. Dr Nielssen diagnosed Dulhunty as suffering from a major depressive illness and assessed him as requiring intensive treatment by way of anti-depressant medication and cognitive behaviour therapy. Dr Nielssen concluded that Dulhunty would be a vulnerable prisoner because of his background, and that his depressive illness would render any period in custody more onerous. However, Dr Nielssen acknowledged that he would be able to seek treatment with anti-depressant medication in custody.
4. A report of Dulhunty's General Practitioner, Dr Arthur Huang, was also tendered. Dr Huang confirmed that in 2011 Dulhunty was diagnosed with atrial fibrillation and had been prescribed medication to control his heart rate and rhythm. Dr Huang also reported that Dulhunty was diagnosed with thyroiditis in December 2011, although his last blood test in 2014 demonstrated satisfactory blood levels. Dr Huang further confirmed that Dulhunty had been referred for a psychiatric assessment in June 2012 and that his depression recently worsened. He is presently taking Zoloft prescribed by his treating psychiatrist, Dr Jacobson, and has suffered from insomnia since 2011. A report of Dr Jacobson which was tendered confirmed that Dulhunty remains mentally unwell and in need of ongoing medication.
5. A report was also tendered from Ingrid Stengelis, Psychologist. Ms Stengelis reported that in November 2008 Dulhunty had attended for treatment to manage anxiety, and had returned for treatment in November 2011 for the same reason. She reported that in May 2014 he returned for further treatment to manage the stress caused by the current proceedings. Although Ms Stengelis has treated Dulhunty in a professional capacity, much of her report had, as its focus, matters personal to him. She described Dulhunty as having displayed genuine remorse for his actions, and reported that his focus in life had altered due to the stress arising from his offending and the associated proceedings.
6. A large body of testimonial material was also tendered from persons who have become acquainted with Dulhunty in both a professional and a personal capacity. He is variously described in that material as highly motivated, principled, a man of unblemished character and a person of considerable generosity. Many of the testimonials spoke of his love for, and dedication towards, his family, and of the potential impact, upon that family, of a custodial sentence. In this regard, considerable emphasis was placed on the fact that he is the father of two young children. Reference was also made to his expressions of remorse.
7. One of the testimonials tendered was from the offender's former wife. She described the offending as being extremely out of character, and spoke specifically of Dulhunty's generosity towards friends in need. She described the devastating consequences of the offending, both for Dulhunty personally and for their family as a whole. She spoke of his devotion to his children and his continued involvement in their lives. Consistent with the report of Dr Nielssen, she attested to Dulhunty's depression and anxiety. Like a number of other persons who provided testimonials, she expressed the view that Dulhunty would not re-offend, and described the fact that he would not be able to resume his career as amounting to "the equivalent of a life sentence".
8. There is also evidence that Dulhunty corresponded with officers of the Australian Securities and Investments Commission and, in a general sense, co-operated with the Commission's investigation.

Evidence in the case of Roach

1. A pre-sentence report of 15 October 2015 set out Roach's background. He is one of four children and has been married for 32 years. He divides his time between assisting his elderly mother, who is in poor health, and residing with his wife. He has been unemployed, and reliant upon his wife financially, since his offending.
2. Roach completed his formal education in Year 11, at which time he left to commence an apprenticeship as an aircraft engineer which he successfully completed. The author of the pre-sentence report stated that Roach acknowledged the seriousness of his behaviour, took responsibility for his actions, and expressed remorse.
3. An affidavit of Roach's wife was tendered. She and Roach have three children, aged 26, 22 and 18. Both Roach and his wife have been involved in community work with their local church for a number of years, during which Roach has been instrumental in establishing and conducting programmes to assist those who were unemployed or otherwise disadvantaged.
4. Roach's wife described the pressure, upon Roach personally and upon their family as a whole, which had resulted from the offending and the associated proceedings. She made specific reference to the impact upon members of her family as a consequence of the attendance, at her home, of police when conducting their investigation. Roach became bankrupt in 2012. As a consequence, his wife has assumed a greater level of responsibility within the family. She described the effect of all of these matters upon her children. Those effects have included their second son discontinuing his tertiary studies.
5. Roach's wife also made reference to the loss of what she described as the offender's "impeccable business reputation and community service record". She described him as a person of integrity who had been shamed and humiliated by his offending.
6. Testimonials provided by persons who have known Roach in both a personal and professional capacity were tendered. The authors of those testimonials variously described Roach as a person of character, integrity and honesty. They expressed having been shocked upon becoming aware of the offending, and spoke of Roach's expressions of remorse.

Submissions on behalf of the Crown

1. In written submissions, the Crown argued that apart from the pleas of guilty entered by each offender, neither had otherwise expressed any contrition or remorse for the offending. These submissions were seemingly prepared without the Crown having the benefit of reading the testimonial material to which I have referred. The Crown submitted that in any event, the fact that each offender had sought to diminish his respective criminality by relying on the conduct of Goodman demonstrated that neither of them had fully accepted responsibility for the offending. It was submitted that in these circumstances, any expressions of contrition should be viewed as qualified.
2. The Crown accepted that each offender had entered a plea of guilty before the Local Court. However, it was submitted that it was relevant to consider whether the plea in each case had been motivated by a willingness to facilitate the course of justice, or whether it was little more than a recognition of the inevitable, in the face of a strong Crown case. In terms of the timing of the pleas, the Crown traced the chronology of the proceedings against each offender. The Crown pointed to the fact that the charges were laid on 6 August 2014, that the pleas of guilty were not entered until 19 May 2015, and that in the intervening period a Brief of Evidence was served. Between about 10 September 2014 and 19 May 2015 there were discussions between the legal representatives of each offender and the representatives of the Crown regarding the possibility of a plea of guilty being entered, and the possibility of reaching an agreement as to the facts.
3. Ultimately, the Crown's position was that the plea in each case was "some evidence" on the part of each offender of remorse, acceptance of responsibility and a willingness to facilitate the course of justice. However, the Crown argued that the significance of each of these factors was limited by the strength of the Crown case which, it was submitted, had rendered a conviction inevitable. It was submitted that any allowance for the plea of guilty in each case should be assessed with these matters in mind.
4. The Crown further submitted that general deterrence was a particularly important consideration in determining sentence in a matter of this nature, and that specific deterrence was also important.
5. The Crown acknowledged that neither offender had any relevant prior convictions. However it was submitted that in the context of offending of this nature, good character and the absence of prior convictions were of less significance.
6. Finally, the Crown submitted that because of the ongoing nature of the conspiracy, its sophistication and the awareness of wrong doing by the offenders, I should be cautious in concluding that either offender had positive prospects of rehabilitation. It was submitted that apart from the nature and extent of the offending conduct, other factors which bore on that consideration included, in the case of each offender, his age and the degree of available family support.

Submissions on behalf of Dulhunty

1. Senior counsel for Dulhunty acknowledged the relevance of general deterrence on sentence although he did not accept that it had the significance suggested by the Crown. It was submitted that Dulhunty's actions did not constitute undermining the integrity and efficacy of markets to any significant extent and that in these circumstances general deterrence had a lesser role to play than might otherwise be the case. It was further submitted that there was no evidence of any personal profit being derived by Dulhunty from his offending, such that this court would otherwise have an interest in imposing a sentence which would deter those from abusing markets for personal gain. In terms of personal deterrence, it was submitted that Dulhunty's subjective intention was to protect the company from damage during the duration of the conspiracy. It was submitted that in these circumstances, personal deterrence was of little significance.
2. It was submitted that Dulhunty had been co-operative throughout the investigation and that his plea of guilty was, in effect, a continuation of that co-operation. It was submitted that in these circumstances, he should receive the full benefit of that plea.
3. Senior counsel made reference to the evidence of Dulhunty's relationship with his children, and the harmful impact that a custodial sentence would have upon them. It was pointed out that within the testimonial material there was evidence that Dulhunty had structured his career so that he could spend more time with his children and that, as a consequence, he played an invaluable role in their lives. Senior counsel also relied upon Dulhunty's prior good character and the significant contribution he has made to the community over a long period. It was submitted that in all of the circumstances, I should find that Dulhunty had shown genuine remorse, that he had good prospects of rehabilitation, and that he was unlikely to reoffend.
4. Senior counsel also relied upon the fact that Dulhunty had, in effect, lost the career to which he had been dedicated and that he had little or no prospect of obtaining similar employment at any time in the future. This, it was submitted, constituted significant extra curial punishment.

Submissions on behalf of Roach

1. Senior counsel for Roach submitted that Roach had shown contrition over and above that evidenced by his pleas of guilty. It was submitted that those pleas, which had been entered in the Local Court, were demonstrative of Roach's remorse, and of his acceptance of responsibility. It was further submitted that the fact that Roach sought to reach agreement with the Crown as to the facts to be put before the Court underscored, rather than undermined, his willingness to facilitate to the course of justice. It was submitted that in all of these circumstances Roach should be given the full benefit of his pleas.
2. Senior counsel for Roach also relied upon the delay which had been occasioned in bringing these proceedings. It was pointed out that an examination of Roach in relation to this matter took place in September 2012, but that it was not until 2014 that he was charged. It was submitted that the investigation was not one of great complexity but that the delay it had resulted in significant stress for the offender and had left him in a state of uncertain suspense.
3. Senior counsel also cited Roach's previous good character which, it was submitted, extended well beyond the mere absence of criminal convictions. In this regard, emphasis was placed on the content of the testimonial material to which I have referred.
4. In all of the circumstances, and whilst acknowledging that prior good character and a lack of criminal antecedents may be of less weight as separate mitigating features in offending of this type, senior counsel submitted that such matters remained of considerable significance, particularly when assessing the Roach's prospects of rehabilitation. It was submitted that the evidence in the present case supported the conclusion that it was most unlikely that Roach would re-offend at any time.
5. Whilst not advancing the proposition that it was exceptional, it was submitted that there was evidence that a custodial sentence would cause hardship to Roach's family. This, it was submitted, arose from the evidence of Roach caring for his elderly mother, as well as the matters to which his wife referred in her affidavit and which I have previously summarised. It was submitted that these were necessarily matters to be taken into account as part of Roach's general subjective case.

Consideration

1. I am obviously mindful of the need to consider the case of each offender separately. However, their respective subjective circumstances are, generally speaking, common and in large measure can be dealt with together.
2. I am satisfied that each offender is genuinely remorseful and contrite. That is the overwhelming effect of the testimonial material which has been tendered in each case, and to which the Crown did not object. I do not regard the position taken by the either offender in relation to Goodman as qualifying, to any significant degree, the remorse that each of them has expressed to others (and in the case of Dulhunty, to the Court).
3. I am also satisfied that each offender has good prospects of rehabilitation. It is apparent that each has learned a salutary lesson. There is nothing to suggest any real prospect of re-offending in either case. In all of these circumstances I have concluded that specific deterrence has no role to play in determining sentence.
4. Each offender is a person of prior good character. Apart from the absence of convictions, each has made a significant contribution to the wider community in differing ways. Each is entitled to draw upon his previous good character as a factor in mitigation of penalty. However, two observations must be made in that regard. Firstly, for the reasons I have developed further below, general deterrence remains an important factor in this case and because of that, less weight is to be given to evidence of good character: McMahon v R [2011] NSWCCA 147 at [76] per Hoeben J (as his Honour then was), Hodgson JA and Grove AJ agreeing. Secondly, and as previously outlined, the offending occurred over an extended period of time in each case. That also operates to lessen the weight to be given to the prior good character of each offender: R v Kennedy [2000] NSWCCA 527 at [22] per Howie J, Simpson J (as her Honour then was) agreeing.
5. In the case of Dulhunty, there is evidence of current symptoms of a depressive illness. I have had regard to that circumstance.
6. Each offender entered a plea of guilty before the Local Court. Although the pleas were entered some time after the charges were laid, it is apparent that in the intervening period discussions and negotiations took place regarding the possibility of a plea being entered, and the content of any factual material which would be put before the Court in that event.
7. In Cameron v R [2002] HCA 6; (2002) 209 CLR 339 the plurality (Gaudron, Gummow and Callinan JJ) observed at [14]: "Reconciliation of the requirement that a person not be penalised for pleading not guilty with the rule that a plea of guilty may be taken into account in mitigation requires that the rationale for that rule, so far as it depends on factors other than remorse and acceptance of responsibility, be expressed in terms of willingness to facilitate the course of justice and not on the basis that the plea has saved the community the expense of a contested hearing".
8. Their Honours went on to say (at [22]): "… leaving aside remorse and acceptance of responsibility, the operative consideration is willingness to facilitate the course of justice. And once that rationale is accepted, the respondent's suggestion that the extent to which a plea of guilty may be taken into account in mitigation may vary according to whether it was or was not a 'fast-track' plea must be rejected. Rather, the issue is to what extent the plea is indicative of remorse, acceptance of responsibility and willingness to facilitate the course of justice. And a significant consideration on that issue is whether the plea was entered at the first reasonable opportunity."
9. In Cappis v R [2015] NSWCCA 138 Garling J (with whom Gleeson JA and Johnson J agreed) said (at [57]): "The central matter which is required to be considered by the sentencing judge is the willingness of the offender to facilitate the course of justice by entering the plea. In assessing that willingness, when a sentencing court is dealing with a Commonwealth offence, a relevant consideration for the sentencing Court is the strength of the Crown case against the offender: see Tyler v R; R v Chalmers [2007] NSWCCA 247; (2007) 173 A Crim R 458 at [114] per Simpson J; Danial v R [2008] NSWCCA 15 at [28] per James J."
10. Recently, in DPP (Cth) v Gow [2015] NSWCCA 208 Basten JA concluded (at [28]) that the decision in Cameron had nothing to say about the operation of Commonwealth law with respect to sentencing. His Honour expressed some doubt as to whether the decision operated to limit the basis upon which a plea of guilty may be taken into account. Hamill J (at [72]) agreed that the decision in Cameron did not limit the impact of a Federal offender's plea of guilty to an assessment of the extent to which it demonstrated a willingness to facilitate the course of justice. However, his Honour expressed a preference to leave the more general consideration of the interaction of Commonwealth sentencing provisions with the general sentencing law of New South Wales, along with the extent to which that consideration is informed by decisions such as that in Cameron, for a case when those matters were the subject of full argument.
11. Based on the available documentation, the Crown case against each offender was strong. Further, the pleas were entered a considerable period of time after the charges were laid. However to use these factors as a basis for concluding that the pleas were not entered at the first reasonable opportunity, or that they were entered other than in a willingness to facilitate the course of justice, would in my view be wrong. Such an approach would ignore, in particular, the discussions which were apparently taking place over a protracted period which seemingly resulted in the pleas being entered. In my view, the fact that each offender was prepared to engage in those discussions is indicative of a willingness to facilitate the course of justice. The fact that an agreement could not be reached as to the entirety of the factual material (necessitating the tender of Annexure A) does not derogate from such willingness on the part of either offender. In all of the circumstances, I am satisfied that the plea in each case was entered at the first reasonable opportunity.
12. Further, and although the documentary evidence established a strong case against each offender, and although this is a factor which has the capacity to cast some light upon the question of whether the plea of guilty was truly motivated by a willingness to facilitate the course of justice or by a recognition of the inevitable (Tyler v R; R v Chalmers [2007] NSWCCA 247 at [114] per Simpson J (as her Honour then was), Spigelman CJ and Harrison J agreeing), I am satisfied in all of the circumstances that each offender has demonstrated a willingness to facilitate the course of justice, not only by entering a plea of guilty but by endeavouring, as far as possible, to reach agreement as to the factual material to be placed before the court. Providing the guilty plea is taken into account in each case, it is not necessary for me to quantify the discount: Tyler at [112]. Each offender should have the benefit of a discount which falls at the uppermost level.
13. Each offender has suffered significant extra curial punishment as a consequence of his offending. Each will be disqualified, upon conviction, from managing a corporation for a period of 5 years. The Crown conceded that this was an appropriate factor to take into account on sentence. The Crown also conceded that a person's loss of career and reputation may amount to a form of extra-curial punishment. However, the Crown submitted that it remained open to each offender, at the expiration of the statutory disqualification period, to re-enter the corporate world in some capacity or other.
14. In my view, the possibility that either offender might obtain similar employment in the future is, to say the least, remote. The nature of the offending, and the fact that it has been made public, make it difficult to envisage either offender being appointed to any position of corporate responsibility at any time in the future. Needless to say, each offender must have known of these likely consequences at the time of the offending and whilst that must be taken into account, it does not mean that extra curial punishment is of no relevance at all. I have taken it into account in determining sentence in each case.
15. I accept the submissions made on behalf of each offender regarding the effect of any custodial penalty upon their respective families. I accept that such effect is likely to be significant in respect of each offender, albeit for different reasons. However, the effect is not exceptional: R v Zerafa [2013] NSWCCA 222; (2013) 235 A Crim R 265 at [93] per Hoeben CJ at CL, Latham J agreeing. It is no greater than what one might reasonably expect in a case such as this. I have taken it into account in assessing the general subjective circumstances of each offender.
16. I have also had regard to the delay in the institution, and finalisation of, these proceedings. I do not intend to level criticism at any party for that delay. The fact is that both offenders have been in a state of uncertain suspense for a period of time.

GENERAL DETERRENCE

1. I have previously found that neither offender was motivated by the desire to derive immediate personal profit. I have also found that there was no deliberate obfuscation on the part of the offenders, such as the use of false names or false accounts. Accordingly, this is not a case where the adoption of such forms of subterfuge made the offending difficult to detect. However that does not mean that general deterrence (for which provision is now made in s. 16A(2)(ja) of the Act) is not important. On the contrary, it must be given significant weight.
2. In R v Pogson, Lapham and Martin [2012] NSWCCA 225; (2012) 82 NSWLR 60, McClellan CJ at CL and Johnson J (with whom R A Hulme and Button JJ agreed) said (at [143]): "Sentencing courts have a responsibility to ensure that the sentence imposed punishes the offender, denounces their criminal conduct and provides sufficient disincentive to others who may be tempted to offend, to ensure that they refrain from criminal activities. Although some statements have been made suggesting that in relation to some offences general deterrence may be controversial, this is not the case with crimes involving the market or other business dealings".
3. In Jacobson (supra) Kaye J said (at [74]): "In cases such as this, the courts have emphasised that the principles of general deterrence and denunciation must be given significant weight. …. Unless the courts adopt a firm approach in the imposition of sentences for such offences, those persons who are minded to commit such offences will consider that the risks in doing so are outweighed by the potential benefits which may accrue from involvement in such offences. For those reasons it has been emphasised by the courts that the considerations of denunciation and general deterrence must take precedence, and be given significantly more weight than the mitigatory factors ….."

THE IMPOSITION OF SENTENCE

1. Section 16A(1) of the Act provides that I must impose a sentence that is of a severity which is appropriate in all of the circumstances of the case. In light of s. 17A(1), I must not pass a sentence of imprisonment on any person for a federal offence unless, having considered all other available sentences, I am satisfied that no other sentence is appropriate. Under s. 17A(2), in the event that I pass a sentence of imprisonment on either offender, I must state my reasons for concluding that no other sentence is appropriate, and I must cause those reasons to be entered in the records of the court. In the event that I conclude that a period of custody must be served, I am required to determine the minimum term that justice requires each offender serve in accordance with Part 1B of the Act, and not by reference to an assumed starting point or ratio: Hili v R; Jones v R [2010] HCA 45; (2010) 242 CLR 520 at [36] - [45].
2. The Crown submitted that in the case of each offender, a custodial sentence should be imposed. Senior counsel for each offender accepted that to be the case. For the reasons I have stated, I am satisfied that no sentence other than a sentence of imprisonment is appropriate in the circumstances of the present case. The issue, however, is how any such sentence should be served. The Crown submitted that any sentence should require each offender to serve a period of actual custody. Senior counsel for each offender submitted that having regard to all of the circumstances, it was appropriate for any sentence of imprisonment to be served in a way which did not involve serving such a period, be it by way of immediate release pursuant to a Recognisance Release Order or otherwise.
3. For the reasons I have already expressed, the offending in this case was of considerable seriousness, and general deterrence has a significant role to play. I accept that general deterrence does not, of itself, mandate that in each and every case of this type of offending, a period of actual custody must be served. Whether a particular sentencing alternative is appropriate or adequate must necessarily be determined on a case by case basis, taking into account all of the relevant circumstances: R v Boulden [2006] NSWSC 1274 at [51]; R v Hinchcliffe [2013] NSWCCA 327 at [276]. However having considered all relevant factors, I have come to the view that a period of actual full time custody must be served in each case.
4. I have already explained the circumstances in which the offender Roach faces two charges. That requires the imposition of two separate sentences, reflective of the criminality in each case: Pearce v R [1998] HCA 57; (1998) 194 CLR 610. I must also bear in mind that although the majority of Roach's offending occurred over a period when the lower maximum penalty applied, the offending in Count 2 occurred at a time when the maximum penalty had doubled. At the same time, I have found that the roles played by each offender cannot be differentiated, and that the total period over which they each offended was essentially the same. All of these considerations are reflected in the sentences I propose to impose.

ORDERS

1. In respect of the offender Robert Venour Dulhunty: 1. The offender is convicted. 2. The offender is sentenced to a term of imprisonment of 1 year and 6 months, commencing on 30 November 2015 and expiring on 31 May 2017. 3. I direct that at the expiration of a period of 6 months, namely on 31 May 2016, the offender be released upon his own recognisance, without security, in a sum of $500.00, to be of good behaviour for a period of 12 months.
2. In respect of the offender Roach: 1. The offender is convicted of counts 1 and 2. 2. In respect of count 1, the offender is sentenced to a term of imprisonment of 11 months, commencing on 30 November 2015 and expiring on 31 October 2016. 3. In respect of count 2, the offender is sentenced to a term of imprisonment of 7 months, commencing on 1 November 2016 and expiring on 31 May 2017. 4. I direct that at the expiration of a period of 6 months, namely on 31 May 2016, the offender be released upon his own recognisance, without security, in a sum of $500.00, to be of good behaviour for a period of 12 months.

Amendments 16 October 2017 - 13 October 2017 - Non-publication order preventing publication of the name of the offender Roach vacated. 16 October 2017 - Typographical corrections to [101] and [108] 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: 16 October 2017