R v Glynatsis

Facts of Offences 13An Agreed Statement of Facts was tendered at the sentencing hearing. In addition, the Offender gave evidence and was cross-examined concerning aspects of his conduct giving rise to the offences. 14What follows is drawn from the Agreed Statement of Facts. 15The Offender was born in January 1983. He obtained Bachelor of Law and Bachelor of Business Administration degrees from Macquarie University in 2005. He commenced, but did not finish, a Diploma in Financial Services from Kaplan Professional in 2010. The Offender's Position 16In February 2007, the Offender commenced employment with PricewaterhouseCoopers ("PwC"), a large accounting firm which provides a range of professional services to public and private clients, including some of Australia's leading companies. He was initially employed as a graduate consultant in the Research and Development section of the Tax and Legal Department ("R&D Section") and, from July 2009, he was employed as a Senior Consultant within that Section. 17The nine offences for which he is to be sentenced were committed in a period between November 2009 and November 2010. 18Around 20 January 2011, search warrants were executed on behalf of the Australian Securities and Investment Commission ("ASIC") in relation to this matter, at which time the Offender was placed on leave. The Offender resigned from PwC at the beginning of June 2011. 19It is necessary to refer briefly to the function of the R&D section of PwC to place the Offender's conduct in context. The R&D section of PwC specialises in the provision of taxation advice to companies engaged in research and development activities that are potentially risky or innovative. The Offender's role in this section rarely required him to work on projects that involved accessing "inside information" as defined in s.1042A Corporations Act 2001 (Cth). 20During his employment at PwC, the Offender had access to a business process and record management system called Documentum, which houses caches of files relating to (amongst other things) PwC's clients and the various projects in respect of which PwC had been retained to provide advice. Unless access to a client file or projects stored on Documentum had been specifically limited, all Documentum users had access to that information. 21The Offender had exclusive use of a laptop provided to him by PwC which was protected with a username and password unique to the Offender. This laptop contained a program which enabled the Offender to access the Documentum database, and also automatically saved the documents he viewed and recorded the date and time at which he viewed them. Insider Trading Conducted by the Offender 22Between November 2009 and November 2010, the Offender, on the occasions to be mentioned shortly, improperly and for the purpose of financial gain: (a) accessed confidential PwC documents on Documentum identifying proposed transactions involving PwC clients, such as corporate takeovers, which contained inside information; and (b) shortly afterwards traded in "Division 3 financial products" (as defined in s.1042A Corporations Act 2001 (Cth)), namely securities (for example, shares in a company or units on a listed trust or fund) and Contracts for Difference in respect of securities ("CFDs"), to which the inside information related. 23It is not necessary for the purpose of these remarks on sentence, to expand upon the concept of CFDs, which are "derivatives" within the meaning of ss.761D and 1042A Corporations Act 2001 (Cth) (see, generally, International Litigation Partners Pte Ltd v Chameleon Mining NL [2011] NSWCA 50; 276 ALR 138 at 150 [68]-[71]). 24The Offender had no legitimate work-related reason to access these documents and, at all relevant times, he was aware that his actions in accessing the documents and subsequently trading, contravened various PwC policies and were illegal. 25The Offender personally caused all of the trading referred to hereafter by placing orders over the internet through either a trading account held with CMC Markets Asia Pacific Pty Limited in his own name, or three separate trading accounts held by relatives ("relatives' trading accounts"): (a) an account in the name of Michael Glynatsis, the Offender's uncle; (b) an account in the name of Irene Glynatsis, the Offender's sister; or (c) an account in the names of Michael Glynatsis and his business partner, Peter Nicola. 26The Offender traded, acquired and disposed of relevant financial products, through his relatives' trading accounts, as their agent, although not pursuant to any formal written agency agreement. In particular: (a) each of the relatives gave the Offender permission to trade through their accounts, and provided him with their usernames and passwords for this purpose; (b) each of the relatives was broadly aware of the Offender's trading through their accounts, although they were usually not aware of the specific details of each particular trade; and (c) all of the trades through the relatives' trading accounts were conducted by the Offender on behalf of, and for the financial benefit of, his relatives. 27It is not alleged that any of the relatives were complicit in the Offender's offences. 28Further, the Crown accepts that the Offender did not derive any financial benefit for any trades conducted through his relatives' trading accounts. First Offence 29Challenger Kenedix Japan Trust ("CKT") was an Australian-based listed property trust whose ordinary fully-paid units traded on the Australian Stock Exchange ("ASX") at all material times. Challenger Limited ("Challenger") is an investment management firm that was listed on the ASX in 1987. Income payments made by Challenger pursuant to annuities are guaranteed by Challenger Life Company Limited ("CLC"), a life insurance company under the Life Insurance Act 1995 (Cth). 30Prior to 20 November 2009, the Offender had never acquired any units or CFDs in respect of units in CKT through either his own trading account, or his relatives' trading account. 31At 2.31 pm on 19 November 2009, the Offender, for no legitimate work-related reason, accessed on Documentum a letter dated 18 November 2009 from PwC to Challenger Financial Services Group Limited entitled "Engagement Letter - Provision of Australian and Japanese Tax Services: Challenger Kenedix Property Trust". The letter contained a proposal from PwC to provide tax structuring and due diligence servicing in respect of a proposed takeover. 32Between 20 November 2009 and 2 December 2009, the Offender: (a) acquired, through his own trading account, 58,000 CFDs in respect of units in CKT at prices between $0.705 and $0.79 per CKT unit, resulting in a total exposure of $42,950.00; and (b) acquired, for his relatives' trading accounts, 48,700 units in CKT at prices between $0.71 and $0.73 per unit, for a total cost of $27,971.00. 33At the time when the Offender acquired all of these units and CFDs in respect of units in CKT, he possessed inside information concerning CKT to the effect that CLC had developed, and sought advice from PwC in relation to, a proposal to take over 100% of the interests of CKT by way of a scheme of arrangement. 34At the time when the Offender acquired all of these units and CFDs in respect of units in CKT, he knew that this inside information was not generally available and, if it were generally available, that a reasonable person would expect it to have a material effect on the price or value of units and CFDs in respect of units in CKT. 35At 10.07 am on 9 December 2009, CKT released a public ASX announcement, classified as "price sensitive", stating that it recommended a proposal from CLC which, if approved and implemented, would result in CLC owning all of the units in CKT and unit holders receiving a cash consideration of $1.00 per unit. 36Prior to this analysis, units in CKT last traded on the ASX at $0.70 per unit. When trading resumed after the announcement, the opening price of CKT units was $0.965 per unit, a 37.9% increase from its preannouncement price, and the price reached an intraday high of $1.00 per unit. 37On 9 December 2009, after the public announcement, the Offender disposed of all of the units and CFDs in respect of units in CKT for prices of or reflecting between $0.965 and $0.99, for a total consideration of $94.658.00. This resulted in a total gross profit of $23,737.00, comprised of $13,600.00 for the Offender and $10,137.00 for his relatives. Second Offence 38Hastings Diversified Utilities Fund ("HDF") is a small-cap diversified utility stock trust whose ordinary fully-paid units traded on the ASX at all material times. APA Group ("APA") is an Australian-based listed natural gas infrastructure business, owning and operating gas transmission and distribution assets. 39As at 11 March 2010, the Offender did not hold any units or CFDs in respect of units in HDF, but he had previously held CFDs in respect of units in HDF and had last traded them on 29 January 2010. Second Offence - First Particulars 40Shortly after 2.00 pm on 11 March 2010, the Offender, for no legitimate work-related reason, accessed on Documentum a transaction summary report entitled "APA: Project Mo", which had been created or saved the previous day. Shortly after, he accessed, again for no legitimate work-related reason, a powerpoint presentation entitled "UK Water Assets - 31 December 2009" which had been created or saved the day before and set out steps for the proposed acquisition of 100% of the units in HDF by APA and other entities. 41Between 11 March 2010 and 17 March 2010, the Offender: (a) acquired, through his own trading account, 9,000 CFDs in respect of units in HDF at a price reflecting $1.25 per HDF unit, resulting in a total exposure of $11,250.00; and (b) acquired, through one of his relatives' trading accounts, 10,000 units in HDF at a price of $1.225 per HDF unit, for a total of $12,250.00. 42At the times when the Offender made these acquisitions, he possessed inside information to the effect that APA had developed, and sought advice from PwC in relation to a proposal to acquire 100% of the units in HDF. 43At the time of these acquisitions, the Offender knew that the inside information in his possession was not generally available and, if it were, that a reasonable person would have expected it to have a material effect on the price or value of units and CFDs in respect of units in HDF. 44The proposed takeover of HDF by APA was not publicly announced, and did not eventuate in March or April 2010. 45Between 23 March 2010 and 8 April 2010, the Offender disposed of all the units and CFDs in respect of units in HDF for prices between $1.235 and $1.275, for a total consideration of $23,880.00. This resulted in a total gross profit of $380.00, comprised of a loss of $120.00 for the Offender, and a profit of $500.00 for his relatives. Second Offence - Second Particulars 46Between 18 March and 4 May 2010, the Offender did not acquire any further units or CFDs in respect of units in HDF through either his own trading account or any of his relatives' trading accounts. 47At about 12 noon on 4 May 2010, and again at 2.57 am on 5 May 2010, the Offender, for no legitimate work-related reason, accessed on Documentum a powerpoint presentation entitled "APA: Project Moe - Acquisition Structure/Steps Overview", which had been created or saved on 4 May 2010, and which contained a detailed outline of steps for the proposed acquisition by APA of 100% of the units in HDF. 48Between 11.07 am on 5 May 2010 and 7 May 2010, the Offender acquired through his own trading account, 40,000 CFDs in respect of units in HDF at prices reflecting between $1.255 and $1.315 per HDF unit, resulting in a total exposure of $51,550.00. 49At the times of these acquisitions, the Offender possessed inside information concerning HDF to the effect that APA had developed, and sought advice from PwC in relation to, a proposal to acquire 100% of the units in HDF, and that APA had proposed a bid price of $1.54 per unit in HDF. 50At the times of these acquisitions, the Offender knew that this inside information was not generally available and that, if it were, a reasonable person would expect it to have a material effect on the price or value of units and CFDs in respect of units in HDF. 51The proposed takeover of HDF by APA was not publicly announced and did not eventuate in May 2010. 52On 13 May 2010, the Offender disposed of all his CFDs in respect of units in HDF at prices reflecting $1.34 or $1.35 per unit, resulting in a gross profit for the Offender of $2,225.00. Third Offence 53Brockman Resources Limited ("BRM") is an ASX 300 Australian-based mining company whose ordinary fully-paid shares traded on the ASX at all material times. Wah Nam International Holdings Limited ("Wah Nam") is an investment holding company, incorporated in Bermuda and listed on the ASX. 54Prior to 3 May 2010, the Offender had never acquired any shares or CFDs in respect of shares in BRM through either his own trading account or any of his relatives' trading accounts. 55On 14 April 2010, and again on 26 April 2010, the Offender, for no legitimate work-related reason, accessed on Documentum an extract from a draft bidder's statement relating to the proposed takeover of BRM by Wah Nam, entitled "Risk Section - Risks relating to the offer and the combined group". 56At 10.06 am on 3 May 2010, the Offender acquired through his own trading account, 10,000 CFDs in respect of shares in BRM at a price reflecting $3.34 per BRM share, resulting in a total exposure of $33,400.00. 57At the time of this acquisition, the Offender possessed inside information concerning BRM to the effect that Wah Nam had developed, and sought advice from PwC in relation to, a proposal to make an offer to acquire more than 80% of the shares in BRM. 58At the time of the acquisition, the Offender knew that this inside information was not generally available, and of the effect upon a reasonable person, if it were. 59On 3 and 4 May 2010, shortly after the Prime Minister announced a proposed Resources Super Profits Tax ("RSPT") on mining profits, share prices of Australian mining companies, including BRM, generally fell significantly and, thereafter, share prices of such companies generally remained relatively volatile for many months. 60On 4 May 2010, the Offender disposed of all of his CFDs in respect of shares in BRM at prices reflecting $2.84 and $2.96 per BRM share, resulting in a gross loss to the Offender of $4,400.00. Fourth Offence 61At 11.06 am on 10 May 2010, the Offender, for no legitimate work-related reason, accessed on Documentum a 116-page draft bidder's statement setting out extensive details of Wah Nam's proposed takeover of BRM, which had been saved on Documentum only nine minutes earlier. This document identified, amongst other things, that Wah Nam intended to make a takeover offer for all of the shares in BRM at a price representing "a substantial and attractive premium" to the existing and past prices of BRM shares, with an effective price of $4.50 per share suggested. 62At 12.03 pm on 10 May 2010, the Offender recommenced acquiring, through his own trading account, CFDs in respect of shares in BRM, and he continued to acquire them up until 13 July 2010. He acquired, over this period, a total of 31,000 CFDs in respect of shares in BRM, for prices reflecting $2.77 and $3.02 per BRM share, resulting in a total exposure of $90,355.00. 63At the times of these acquisitions, the Offender possessed inside information to the effect that Wah Nam intended to make, and sought advice from PwC in relation to, a takeover of all of the shares in BRM, that Wah Nam intended to offer a price representing "a substantial and attractive premium" to the existing and past prices of BRM shares, and that Wah Nam had proposed offering an effective price of $4.50 per BRM share. 64At the time of these acquisitions, the Offender knew that this inside information was not generally available, and was aware of the effect upon a reasonable person, if it were. 65Between May and October 2010, the proposed takeover of BRM by Wah Nam was not publicly announced, and it did not occur. 66Between 3.30 pm on 10 May 2010 and 13 September 2010, the Offender disposed of his 31,000 CFDs in respect of shares in BRM at prices reflecting between $2.67 and $3.34 per BRM share, resulting in a total gross profit for him of $3,851.00. 67On 10 November 2010, Wah Nam released a public ASX announcement stating that it intended to make a takeover offer for all of the ordinary shares in BRM at an effective price of $6.47 per share, which represented an 89.9% premium to the value-weighted average price for the 180 days to 9 November 2010. When trading resumed after the announcement, the opening price of BRM shares on the ASX was $5.70 per share and the price reached a high that day of $6.09 per share (a 28.5% increase from its preannouncement price). Fifth Offence 68Ferraus Limited ("FRS") is an Australian-based mining company whose ordinary fully-paid shares traded on the ASX at all material times. 69As at 10 May 2010, the Offender and his relatives did not hold any shares or CFDs in respect of shares in FRS, but the Offender had previously held CFDs in respect of shares in FRS and had last traded them on 28 April 2010. 70At 11.06 am on 10 May 2010, the Offender accessed the 116-page draft bidder's statement mentioned above (at [61]). In addition to detailing the proposed offer by Wah Nam to acquire all of the shares in BRM, the document also identified that Wah Nam intended to make an off-market takeover offer for all of the ordinary shares in FRS and that Wah Nam intended to offer an effective price representing "a premium" to the existing price of FRS shares. 71Between 18 May 2010 and 6 July 2010, the Offender acquired, through his relatives' trading accounts, 10,000 shares in FRS at prices between $0.795 and $0.80, for a total cost of $7,975.00 72At the times of these acquisitions, the Offender possessed inside information with respect to Wah Nam's intention. 73At the times of these acquisitions, the Offender knew that this information was not generally available, and was aware of its impact upon a reasonable person, if it were. 74Between May and September 2010, the proposed takeover of FRS by Wah Nam was not publicly announced and it did not occur. 75On 24 June 2010 and 22 September 2010, the Offender disposed of all of the 10,000 shares in FRS at prices of between $0.84 and $0.85 per FRS share. This resulted in a total gross profit for his relatives of $475.00. 76On 10 November 2010, Wah Nam made a public ASX announcement, classified as "price sensitive", stating that it intended to make an off-market takeover offer for all the ordinary fully-paid shares in FRS at an effective price of $1.29 per share. When trading resumed after the announcement, the opening price of FRS shares on the ASX was $0.86 per share, and the price reached a high that day of $1.15 per share (a 33.7% increase from its preannouncement price). Sixth Offence 77Apollo Gas Limited ("AZO") was an Australian gas company whose ordinary fully-paid shares traded on the ASX at all material times. Dart Energy Limited ("DTE") is an Australian publicly listed company focused on the development of coal bed methane throughout eastern Australia and Asia. 78Prior to 24 September 2010, the Offender had never acquired any shares or CFDs in respect of shares in AZO through either his own trading account or any of his relatives' trading accounts. 79At around 12.02 pm on 24 September 2010, the Offender for no legitimate work-related reason, accessed on Documentum a letter dated 23 September 2010 from PwC to DTE entitled "Engagement Letter - Project Trojan". 80At 3.37 pm on 24 September 2010, the Offender acquired through one of his relatives' trading accounts, 18,300 shares in AZO at a price of $0.61 per share, for a total cost of $11,163.00. 81At the time of this acquisition, the Offender possessed inside information that DTE had developed, and sought advice from PwC in relation to, a proposal to make a takeover offer for AZO. 82At the time of the acquisition, the Offender knew that the inside information in his possession was not generally available, and of its effect upon a reasonable person, if it were. 83On 28 September 2010, AZO released a public ASX announcement, classified as "price sensitive", recommending a takeover offer from DTE to acquire all issued securities in AZO for an effective price of $0.79 per share. When trading resumed after the announcement, the opening price of AZO shares was $0.75 per share, and the price reached an intraday high of $0.81 per share. 84On 29 September 2010, the Offender disposed of all of the AZO shares at a price of $0.85 per share, resulting in a gross profit for the Offender's relatives of $4,392.00. Seventh Offence 85Dominion Mining Limited ("DOM") was an Australian mining company whose ordinary fully-paid shares traded on the ASX at all material times. Kingsgate Consolidated Limited ("KCN") is an ASX listed mining company. 86As at 11 October 2010, neither the Offender nor his relatives held any shares or CFDs in respect of shares in DOM, but the Offender had previously held CFDs in respect of shares in DOM, and had last traded them on 1 December 2009. Between this date and 11 October 2010, the Offender did not acquire any shares or CFDs in respect of shares in DOM through either his own trading account or any of his relatives' trading accounts. 87At around 12.40 pm on 12 October 2010, the Offender, for no legitimate work-related reason, accessed on Documentum a PwC powerpoint presentation dated 11 October 2010 entitled "Project Territory: Draft Red Flag Tax Report", which was marked "Strictly Private and Confidential". 88Between 2.26 pm on 12 October 2010 and 19 October 2010, the Offender acquired, through his own trading account, 11,000 CFDs in respect of shares in DOM at prices reflecting between $2.82 and $2.89 per DOM share, for a total exposure of $31,586.00. In the same period, he acquired, through one of his relatives' trading accounts, 4,300 shares in DOM at a price of $2.80 per share, for a total cost of $12,040.00. 89At the time of these acquisitions, the Offender possessed inside information concerning DOM to the effect that KCN had developed, and sought advice from PwC in relation to, a proposal to acquire 100% of the shares in DOM at a price including a premium above net tangible assets identified in DOM's consolidated balance sheets. 90At the time of these acquisitions, the Offender knew that the inside information in his possession was not generally available, and was aware of its effect upon a reasonable person, if it were. 91On 20 October 2010, DOM released a public ASX announcement, classified as "price sensitive", stating that it had agreed with KCN a takeover proposal for KCN to acquire all of the issued and outstanding shares in DOM at an effective price of $3.63 per share. When trading resumed after the announcement, the opening price of DOM shares was $3.14 per share, and the price reached an intraday high of $3.35 per share (a 33% increase from its preannouncement price). 92Between 21 October 2010 and 3 November 2010, the Offender disposed of all of the shares and CFDs in respect of shares in DOM at prices between $3.202 or $3.25 per share, for a total consideration of $49,519.00. This resulted in a total gross profit of $5,893.00, comprised of $4,164.00 for the Offender and $1,729.00 for his relatives. Eighth Offence 93Caledon Resources Limited ("CCD") is an Australian-based mining company whose ordinary fully-paid shares traded on the ASX and London Stock Exchange at all material times. Guangdong Rising Assets Co Limited ("GRAM") is a Chinese State-owned asset management company. 94Prior to 22 September 2010, the Offender had not acquired any shares or CFDs in respect of shares in CCD through either his own trading account or any of his relatives' trading accounts. 95At 2.38 pm on 22 September 2010, the Offender, for no legitimate work-related reason, accessed on Documentum from a client directly for GRAM, a powerpoint presentation dated 22 September 2010 and entitled "Project Jack - Draft Tax Report", which was marked "Strictly Private and Confidential". 96Between 3.56 pm on 22 September 2010 and 3 November 2010, the Offender acquired 24,500 shares in CCD through two of his relatives' trading accounts at prices of between $1.14 and $1.191 per share, for a total cost of $29,017.00. 97At the times of these acquisitions, the Offender possessed inside information concerning CCD to the effect that GRAM had developed, and sought advice from PWC in relation to, a proposal to acquire CCD and that PwC had advised GRAM that it had not identified any tax issue it considered would have a materially adverse impact on the decision to acquire CCD. 98At the times of these acquisitions, the Offender knew that this inside information was not generally available and was aware of its impact upon a reasonable person, if it were. 99At 6.11 pm on 8 November 2010, CCD released a public ASX announcement, classified as "price sensitive", stating that it had reached an agreement in principle with GRAM on the terms of a possible cash acquisition of CCD by a wholly-owned subsidiary of GRAM at a price of about $1.78 per CCD share. When trading resumed after the announcement, the opening price of CCD was $1.60 per share (a 12.7% increase from its preannouncement price). 100Between 9 November 2010 and 12 November 2010, the Offender disposed of all of the shares in CCD at prices of between $1.54 and $1.62 for a total consideration of $38,770.00, resulting in a total gross profit for his relatives of $9,753.00. Ninth Offence 101Exoma Energy Limited ("EXE") is an Australian gas explorer whose ordinary fully-paid shares traded on the ASX at all material times. CNOOC Limited (also known as the China National Offshore Oil Corporation) ("CNOOC") is China's largest producer of offshore crude oil and natural gas, and is traded on the Hang Seng and the stock exchanges of New York and Hong Kong. 102At 4.32 pm on 16 November 2010, at which time the market for EXE was $0.25 per share, the Offender, for no legitimate work-related reason, accessed on Documentum a draft contract entitled "Farmin Agreement", which had been created or saved only a few hours beforehand. This document identified, amongst other things, that CNOOC and EXE proposed to enter into a contract upon certain specified terms. 103Between 11.09 am on 17 November 2010 and 23 November 2010, the Offender acquired, through one of his relatives' trading accounts, 40,000 shares in EXE at a price of $0.25 per share, for a total cost of $10,000.00. This relative had pre-existing holdings of 11,500 shares in EXE, which had been acquired by the Offender (as agent of his relative) on 26 October 2010. 104At the time of these acquisitions, the Offender possessed inside information concerning EXE to the effect that CNOOC and EXE proposed to enter into a contract under which CNOOC would acquire a 50% interest in a number of EXE's exploration permits, that EXE would receive $50 million as consideration for the 50% interest, that CNOOC would receive an option to acquire a placement of up to 19.9% of the fully-paid ordinary shares of EXE for a price of $A0.315 per share, and that CNOOC was to receive an equivalent number of options for each share that it acquired under the placement. 105At the times of these acquisitions, the Offender knew that the inside information in his possession was not generally available, and of its impact upon a reasonable person, if it were. 106On 9 December 2010, EXE released a public ASX announcement, classified as "price sensitive", stating that it had executed the Farmin Agreement and identifying various features of the agreement. When trading on the ASX resumed after the announcement, the opening price of EXE was $0.31 per share, and the price reached an intraday high of $0.315. 107On 23 December 2010, the Offender disposed of all of the shares in EXE at a price of $0.235 per share, resulting in a gross loss to his relative of $600.00. Total Profits from the Offender's Insider Trading 108The total gross profit (excluding losses) derived from all of these offences was $50,826.00. Deducting the losses on some of the transactions ($5,120.00), this figure stands at $45,706.00. 109The total gross profit (excluding losses) derived by the Offender through his own trading account was $23,840.00. Deducting the losses made on some of these transactions ($4,520.00), this figure stands at $19,320.00. 110The total gross profit (excluding losses) derived from the Offender's insider trading through his relatives' trading accounts was $26,986.00. Deducting the losses made on some of these transactions ($600.00), this figure stands at $26,386.00.

The Offender's Subjective Circumstances 111As mentioned earlier, the Offender was born in January 1983. He was 27-28 years' old at the time of the offences and is now 29 years of age. He is unmarried. 112The Offender has no prior criminal history. 113A presentence report dated 7 June 2012 is before the Court, together with an intensive correction order assessment report dated 3 December 2012. 114In addition, senior counsel for the Offender tendered a report of Sam Borenstein, consultant clinical psychologist, dated 20 April 2012. Also tendered were a range of documents concerning the Offender's background, education and family circumstances, including a letter from his sister, Irene Glynatsis, and references from persons who know the Offender and attest to his prior good character. 115A number of documents were tendered, as well, concerning the financial circumstances and bankruptcy of the Offender's father, an issue to which I will return. 116A number of media reports were tendered, revealing the publicity which has been given to the charges brought against the Offender. 117As mentioned, the Offender resigned from PwC in early June 2011. I will proceed to sentence the Offender upon the basis that his convictions for these offences will have a terminal effect upon his capacity to work as a legal practitioner and in the area of financial advice in the future. 118As already mentioned, the Offender gave evidence at the sentencing hearing which extended to his background, as well as the circumstances of the offences. Amongst other things, the Offender confirmed that the history given to Mr Borenstein was correct. 119The Offender was born in Greece and came to Australia with his parents and younger sister when he was seven years' old. When he was 10 years' old, his mother left the family and returned to Greece. The Offender had been close to his mother and her departure had an unsettling effect. 120To some extent, the Offender's paternal grandmother filled the void left by his mother, looking after him (in conjunction with his father) until he was about 14 years' old. 121The evidence establishes that the Offender was a hardworking and studious young person, working in the father's fish and chip shop whilst he was at school. When in Years 11 and 12, the Offender helped his father who ran a Greek restaurant in Terrigal. 122The Offender did well in the Higher School Certificate and undertook tertiary studies. He continued to work whilst a university student. 123Whilst studying at university and working in Sydney, the Offender was living with his grandmother, as were his uncle and, occasionally, his sister. He continued to work part time in the family restaurant business as a kitchen hand and cook and as a general manager. After university, the Offender again worked in the family business (a nightclub) as a disc jockey, bar tender and casual manager. 124The Offender's father had remarried when the Offender was 16 years' old and he had another daughter (now 11 years' old). The Offender's father and his second wife divorced in 2009. This process resulted in stress and tension across the whole family, culminating in the father's bankruptcy in February 2010, as well as the loss of the family house. 125Irene Glynatsis confirms the family difficulties in 2009. She stated that she and the Offender commenced to look for a house for her father and his young daughter to occupy. A place was found in October 2010, with settlement in December 2010. She confirmed that the Offender had placed most of the deposit on the purchase of the house for his father and half-sister. This provides some context for the offences committed by the Offender in 2010. 126Since his resignation from PwC in June 2011, the Offender has performed some work as a bar manager for large-scale events, this being work organised by his sister. He presently resides with his father and half-sister on the Central Coast. His current employment is in his father's nightclub on the Central Coast. 127Mr Borenstein initially saw the Offender in November 2011, on referral from his general practitioner, for treatment under a mental health care plan. The Offender was treated for depression and anxiety. Treatment continued in the early months of 2012, with a diagnosis being made of adjustment disorder and depressed mood. 128Mr Borenstein observed, in the context of counselling/therapy, that the Offender had come to appreciate the fact that he has been depressed for many years dating to childhood, that he had not come to terms with his parents' failed marriage, and that he took on the role of protecting the family name, and pleasing his father by excelling academically and caring for his younger sister. Mr Borenstein confirmed that cognitive behaviour therapy is being undertaken to manage the Offender's symptoms of depression and anxiety. 129Mr Borenstein observed that the Offender initially rationalised his behaviour, which he regarded as borderline, but that he has acknowledged that his actions were illegal and had demonstrated remorse. 130Mr Borenstein observed that, at the time of the offences, the Offender's family were in a "state of significant distress", with his father having been declared bankrupt and his uncle having "sustained a large financial loss as the result of a rogue share trader". 131Mr Borenstein considered the Offender's future prospects to be sound, given his expression of remorse and contrition, and he believed that the likelihood of the Offender coming before the Court again was extremely low. 132The Offender's evidence confirmed the history contained in the various documents before the Court. He explained that his interest in share trading increased, and that there was an element of boredom and dislike for his job. He explained the family difficulties occurring in 2010. He acknowledged that what he had done was wrong. 133Under cross-examination, the Offender was challenged as to whether he was still, in a sense, distancing himself from accepting responsibility for his knowingly criminal acts during 2010. He denied that he had attempted to downplay his criminal activity in his discussions with Mr Borenstein. 134I accept that the Offender is contrite and remorseful for his actions and accepts full responsibility for them. Whilst it is the case that he did not give a full account of his actions when they were initially under investigation in 2011, he has readily accepted responsibility for his offences, agreeing to the facts upon which he is to be sentenced, which includes an express acceptance that he knew what he was doing to be wrong at the time. 135The Offender is an intelligent young man who held a responsible position. He comes from a background where his educational and other achievements are held in high regard by his family and community. I accept that he felt a level of pressure to assist his father during the clear and serious financial difficulties which affected him in 2010. This provides some context for the offences. 136I accept as well that the Offender's activities involved trading for the benefit of family members, with at least a desire on the part of the Offender to please those family members on whose behalf he was trading. At the same time, the Offender was obtaining some benefit for himself through his activities. 137The evidence reveals that the Offender has been a hard-working young man devoted to his family over the years. He does not appear to be a person who has sought to live life "in the fast lane", in a way sometimes seen with offenders in this class of crime. 138None of these things serve to excuse the Offender's criminal conduct which was serious and in breach of trust. However, it provides some context for the exercise of sentencing discretion concerning this particular Offender.

Sentencing for Insider Trading Offences 139Insider trading offences are regarded as a serious form of criminal activity. They serve to undermine the integrity of the stock market: R v Doff [2005] NSWSC 50; 23 ACLC 317 at [40]. The offences are difficult to detect: R v Rivkin [2003] NSWSC 447; 198 ALR 400 at 409-410 [44]. 140General deterrence is important in the sentencing process to provide a firm disincentive to insider trading, and with a need to sound "a clarion call" to discourage illegal and unethical behaviour by persons who are in a position to offend in this way: R v Rivkin at 409-410 [44]; cf R v Doff [2005] NSWCCA 119; 54 ACSR 200 at 212 [56]. 141Insider trading not only has the capacity to undermine the integrity of the market, it also has the potential to undermine aspects of confidence in the commercial world generally arising from breaches of trust: Hartman v R [2011] NSWCCA 261 at [94]. 142The cases have emphasised the particular gravity of offences by a "true insider", who abuses the office or employment occupied by the offender to take advantage of information acquired in the course of that employment in order to avoid potential losses by an early sale or to buy with a view to profit: R v Doff at 212 [57] (NSWCCA). 143Insider trading is not a form of victimless crime, and it is a form of cheating: R v Hartman [2010] NSWSC 1422 at [45], [94]; Hartman v R at [94]; R v Bateson [2011] NSWSC 643 at [15]-[21]. 144It will be necessary to apply these principles for the purpose of sentencing the Offender for his offences.

Some Other Relevant Matters 145The Crown accepts that the Offender pleaded guilty at the earliest opportunity so that he should receive appropriate credit for facilitating the course of justice. Although it is not necessary for Commonwealth offences to quantify the discount arising from pleas of guilty, I approach the question of sentence of the Offender upon the basis that a 25% discount applies. 146On 15 May 2012, with the consent of the Offender, the Commonwealth Director of Public Prosecutions obtained a pecuniary penalty order under s.116 Proceeds of Crime Act 2002 (Cth) in the sum of $50,826.00, representing the total gross profits derived from the offences committed by the Offender. This amount was paid on 4 June 2012. 147I have regard to the Offender's payment of the pecuniary penalty order as evidencing his co-operation in resolving action taken against him: s.320(a) Proceeds of Crime Act 2002 (Cth). 148I accept that the Offender's co-operation with law enforcement agencies has been somewhat chequered. During voluntary interviews in January 2011, he did not admit any of the suspected offences and he falsely denied having obtained price sensitive information by accessing PwC documents. However, in July 2011, immediately after a compulsory examination of the Offender, his legal representative indicated co-operation and a willingness to plead guilty to appropriate charges. 149A statement of Hayden Evans, a lawyer with ASIC, dated 18 June 2012, accepted that the Offender's co-operation in admitting the facts and pleading guilty at the earliest opportunity had been of "significant value to ASIC" and that, without this co-operation, ASIC would have been required to expend significant time and resources seeking to gather admissible evidence capable of proving the offences. 150The Offender is entitled to appropriate credit for his prior good character. However, in the area of white-collar offences such as this, good character is not as significant a mitigating factor as in sentencing for other classes of offences. The authorities have recognised that it is often an offender's prior good character and standing within the community that enables him to be placed in the position of trust from which he is then able to commit the offence in question: R v Bateson at [33]. 151As a result of his criminal actions, the Offender has suffered certain detrimental consequences, including what I accept is irreparable damage to his professional career in law and finance, together with media publicity which has been given to his prosecutions. Whilst matters of this type do not loom large in the exercise of sentencing discretion, being the almost inevitable consequences of his own actions, they remain matters which are relevant to the sentencing process and ought be taken into account by the Court: R v O'Brien [2011] NSWSC 1553 at [74]-[75].

Determining the Appropriate Sentences 152In the course of these remarks, I have touched upon a range of matters which fall for consideration on sentence under s.16A Crimes Act 1914 (Cth). 153The Crown submitted that the objective gravity of the Offender's crimes was such that a full-time sentence of imprisonment was the only appropriate penalty in the exercise of sentencing discretion. 154Mr Hastings QC, for the Offender, accepted that the offences were such that periods of imprisonment should be imposed, but submitted that, in all the circumstances of the case, the Offender should be released upon recognizance. In the alternative, he submitted that an intensive correction order should be imposed. 155I accept that the circumstances of these offences are serious. The Offender breached a position of trust with PwC. As a result, he had access to a business process and business management system containing confidential, price-sensitive information. On the occasions giving rise to these charges, he used his position to access documents on this system, identifying proposed transactions such as corporate takeovers. He was a true insider. 156On each occasion, the Offender accessed the inside information improperly, and for the purpose of financial gain for himself or his relatives. 157The offending conduct occurred over a period of some 12 months on nine separate occasions. 158In each instance, the securities were sold yielding total gross profits of $50,826.00 or an overall gross benefit of $45,706.00. Of that amount, the Offender derived, on his own account, a gross profit of $23,840.00, and his relatives derived a profit of $26,386.00. 159It is necessary to keep in mind that the total amount invested was $371,507.00. This is an important indication of the gravity of the offences: R v Doff at [31] (NSWSC). 160The Crown submitted that the fact that some of the securities were purchased on behalf of the Offender's relatives was of no particular importance in this case. The Offender had permission from the relatives to access their trading accounts and he did so. Mr Hastings QC submitted that this aspect was of significance in this case. 161I am satisfied that the trading on behalf of relatives is a significant factor which operates in the Offender's favour in this case. For reasons mentioned earlier, it sheds some light upon the Offender, his thought processes and his family background. I keep in mind, as well, the evidence of clear family financial difficulties affecting the Offender's father in 2010, and the various steps which the Offender and his sister were taking on his behalf. 162In raising these matters, I am not suggesting that the Offender was acting as a form of "white knight", for noble reasons to assist his family in committing these offences. There was an element of personal gain as well. 163However, the Offender has no prior criminal history and has generally indicated himself as being a person of good character. For him to have engaged in this criminal fashion, in breach of trust with his employer, may be better understood by the family dynamics occurring in 2010, including significant financial pressure on his father, all of this to be viewed against the background of the Offender's sense of responsibility as the only son in the family. 164I accept that the Offender demonstrated a willingness to put his own interests, and the interests of his relatives, ahead of the integrity of the market and the interest of his employer. All of this, as I have said, involved serious and sustained breaches of trust. However, the context of this offending is important to a proper understanding of the offences. 165Having regard to the objective gravity of the offences and the Offender's subjective circumstances, and sentencing principles applicable to this class of offending, I am satisfied that sentences of imprisonment are required in this case. As I have said, so much was accepted by senior counsel for the Offender at the sentencing hearing. 166I do not accept the submission on behalf of the Offender that these matters can appropriately be dealt with by way of recognizance. The offences are of a gravity that such a sentence would be inappropriate and would not give effect to the purposes of sentencing, including general deterrence. 167This brings me to the issue of the use of intensive correction orders for this class of offence. Intensive correction orders have been utilised with respect to insider trading offences: R v Dalzell [2011] NSWSC 454; 83 ACSR 407 (Hall J); R v Bateson (Buddin J) and R v O'Brien (Hoeben J). 168At the time of the sentencing hearing on 29 June 2012, the Crown referred to the decision of the Court of Criminal Appeal in R v Boughen [2012] NSWCCA 17; 215 A Crim R 476 in support of a submission that an intensive correction order was not available in a case such as this. The decision of the Court of Criminal Appeal in R v Pogson overturned this aspect of R v Boughen, so that an intensive correction order is an available penalty in a case such as this. It remains, of course, to determine whether such an order should be made in the case of the Offender. 169Submissions were made before me which sought to compare or contrast the circumstances of the offenders in R v Bateson, R v Dazell and R v O'Brien, with a view to demonstrating that an intensive correction order either would, or would not, be an appropriate sentence in this case. 170Care must be exercised in comparing other sentencing decisions which, of course, turn upon the circumstances of the particular offender and the nature of the offences committed. These decisions are, however, useful for the purpose of the present decision. 171The Crown submits that it is most important that the sum invested by the Offender in these offences totalled $371,507.00, a sum far in excess of the nearest comparative case, being the sum of $174,755.00 in R v O'Brien. I accept that this is a factor to be taken into account on sentence, although it is also important that the gross benefit in this case was in the sum of $50,826.00, with that sum subdivided as between the Offender and his relatives. The gross benefit in the case of R v O'Brien was $54,748.00. 172In R v O'Brien, the offender traded exclusively to the benefit of his elderly mother's superannuation fund, which he managed and which had lost value. The present Offender traded on his own behalf and on behalf of his relatives, although the circumstances prevailing in 2010 were as I have already described. The Offender's conduct involved eight companies, whereas four companies were involved in R v O'Brien. 173The point is reached where comparisons of this type cannot progress the exercise of sentencing discretion in the present case. The task of a sentencing Judge is to attempt to apply individualised justice in all the circumstances, many and varied as they are, of the particular case. 174The power to impose an intensive correction order is not confined to offenders who are in need of rehabilitation and are at risk of reoffending: R v Pogson at [99]. However, rehabilitation also addresses the moral sensibilities of the offender, not just his or her propensity to reoffend, so that moral self-correction and renunciation of wrongdoing by an offender are included in the concept of rehabilitation: R v Pogson at [120], [124]. 175An intensive correction order is a substantial punishment. Stringent conditions are attached to an intensive correction order which deprive an offender of his or her liberty in a real sense: R v Pogson at [112]. 176In Director of Public Prosecutions v Edwards [2012] VSCA 293, Weinberg JA and Williams AJA observed, at [242], with respect to the Victorian community correction order: "A community correction order is not, and should not be viewed as, a mere 'slap on the wrist'. It is a significant punishment, and is capable of having substantial deterrent effect, both specific and general." 177In my view, these comments are consistent with the statements of the New South Wales Court of Criminal Appeal in R v Pogson, and apply to intensive correction orders in this State (see R v Pogson at [110]). 178At the same time, however, it is necessary to keep in mind that, as with all sentencing options that do not involve immediate incarceration, an intensive correction order also has a significant degree of leniency: R v Pogson at [108]. 179On 25 October 2012, I considered the preliminary question as to whether an assessment report should be obtained concerning the Offender's suitability for an intensive correction order. Such an assessment is a mandatory requirement before a sentence of this type can be imposed: s.67(4) Crimes (Sentencing Procedure) Act 1999. I determined on that occasion, for the purpose of s.69(2) Crimes (Sentencing Procedure) Act 1999, that no sentence other than imprisonment was appropriate for the Offender and that the sentence was likely to be for a period of no more than two years. 180That assessment was necessary to trigger the request for an assessment report. I made it clear that the question remained as to whether the Offender should be sentenced to full-time imprisonment, a question to be answered today as part of the sentencing decision. 181The assessment report dated 3 December 2012 states that the Offender has been assessed as suitable for an intensive correction order, and has signed an undertaking to comply with all of the obligations of such an order. 182The report assessed the Offender as being at a low risk of reoffending, with his criminogenic needs being in the area of his mental health. The author of the assessment report confirmed that contact had been made with the Offender's treating psychologist who stated that ongoing treatment was occurring. The report stated that a local work placement had been arranged for the Offender to undertake the compulsory work component. 183I have had regard to all aspects falling for consideration under s.16A Crimes Act 1914 (Cth). I have had regard, as well, to s.17A of that Act, which provides that a sentence of imprisonment is effectively a sentence of last resort. 184I have concluded that no sentence other than a term of imprisonment is appropriate in the circumstances of the case. To impose a lesser sentence would not reflect the seriousness of the Offender's crimes, or give proper effect to applicable sentencing principles to which I have made reference. 185I have had regard to the principles of accumulation, concurrency and totality. I accept the Crown submission that the Offender's conduct cannot be treated as a single episode of criminality. As there are a number of offences committed over a period of time, I consider that a measure of accumulation is appropriate, although I am satisfied that the total sentence of imprisonment should not exceed two years. 186In my view, the appropriate sentencing outcome will involve concurrent sentences of imprisonment of one year with respect to each of the first to fifth offences, commencing today, 12 December 2012, and expiring on 11 December 2013. With respect to the sixth to ninth offences, concurrent sentences of imprisonment for 12 months will be imposed, commencing on 12 December 2013 and expiring on 11 December 2014. 187I propose to direct that the sentences be served by way of intensive correction in the community.

Orders 188Mr Glynatsis, would you please stand. 189I make the following orders: (a) with respect to each of the insider trading offences contained in Counts 1 to 5 on the indictment, the Offender is sentenced to imprisonment for a period of 12 months, commencing on 12 December 2012 and expiring on 11 December 2013; (b) with respect to each of the insider trading offences contained in Counts 6 to 9 on the indictment, the Offender is sentenced to imprisonment for a period of 12 months, commencing on 12 December 2013 and expiring on 11 December 2014; (c) pursuant to s.7(1) Crimes (Sentencing Procedure) Act 1999, I make an intensive correction order and direct that the sentences which I have imposed be served by way of intensive correction in the community; (d) the conditions of the intensive correction order include the mandatory conditions referred to in s.81 Crimes (Administration of Sentences) Act 1999 and Clause 175 Crimes (Administration of Sentences) Regulation 2008; (e) in respect of the mandatory condition prescribed by Clause 175(b) Crimes (Administration of Sentences) Regulation 2008, the Offender is to report on or before 19 December 2012 to the specified local office of the Department of Corrective Services, or such other location as may be advised by the Commissioner for Corrective Services.

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: 13 December 2012