plaintiff. Ho was convicted on all six counts and sentenced to three years’ imprisonment, commencing 11 September 2020 and expiring 10 September 2023, to be served by way of an Intensive Correction Order with...
Key principles
The court treated the six insider-trading and tipping offences as a continuing course of offending over approximately one year and seven months. Despite the offender’s...
The court imposed an aggregate term of three years after setting indicative sentences for each count and applying an overall 50 per cent discount. It ordered that the term be...
Issues before the court
How serious were the six insider-trading and tipping offences for sentencing purposes?
What discounts were appropriate for the guilty pleas, cooperation and assistance?
Was an alternative to full-time imprisonment appropriate?
How should multiple offences forming a course of conduct be reflected in the sentence?
Cited legislation
1 cited instrument linked from this judgment.
Plain English Summary
The court sentenced Michael Ho for six offences involving trading BIG shares and options using confidential information and passing information to an associate. It regarded the offending as serious and considered general deterrence important, particularly because the conduct was difficult to detect and Ho knew the relevant prohibitions. His self-reporting, early guilty pleas and extensive assistance earned a 50 per cent discount on each indicative sentence. The court imposed a three-year aggregate prison sentence, but directed that it be served in the community under an Intensive Correction Order, with supervision and 250 hours of community service.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Deep Dive
2,330 words · generated 28/09/2026
What happened
In R v Ho [2020] NSWDC 905, King SC DCJ sentenced Michael Ming Jinn Ho after he pleaded guilty to six Commonwealth offences concerning BIG Un Limited, an ASX-listed company. Five counts concerned insider trading and one concerned tipping, meaning communicating inside information in circumstances captured by the relevant prohibition. The judgment identifies the offences under ss 104(3A) and 1311(1) of the (Cth), with the tipping count identified under ss 104(3A)(2) and 1331(1) [2]–[4].
Corporations Act 2001
The offending spanned 18 July 2016 to 10 February 2018. Ho had professional investment experience and had received training concerning insider trading. After researching BIG using public information, he met its CEO, Richard Evertz, and obtained information about the company that had not been generally disclosed. Ho then bought and sold BIG shares and options while possessing information about its expected revenue, costs, joint venture and possible acquisition activity. He also communicated information to an associate, Christopher Prunty, in October 2016. The agreed facts describe trading through three brokers and seven accounts, including accounts associated with Ho’s wife, parents and companies [6].
The final count concerned information about a $20 million funding arrangement associated with Finstro. The judgment records that Ho traded in BIG securities while possessing that information. It also describes a later sequence of public reports, ASX inquiries, trading suspension and BIG’s eventual administration and removal from the ASX. The judgment does not find that Ho caused BIG’s collapse. It does, however, discuss the company’s circumstances when assessing the market context and the seriousness of the offences.
The court did not set out every transaction. It relied on the agreed facts and summarised the scale and nature of the conduct. The judgment records a total investment of approximately $1.6 million by Ho, family members and associated companies, and notes that the financial consequences were difficult to quantify. Securities were left worthless after trading was suspended, though the court also noted that the offender had traded with the objective of making profit and minimising losses.
Ho self-reported to ASIC through his lawyers in March 2018. He took part in two voluntary interviews, made admissions and provided materials, including his own notes and chronology. He pleaded guilty to all six charges at the first mention in the Local Court [7], [24]. The court considered this cooperation significant because it assessed that ASIC would probably not otherwise have obtained enough evidence to prosecute him, and because his assistance could support possible proceedings concerning others.
On 11 September 2020, the court convicted Ho on each count and imposed a three-year aggregate prison term. It directed that the sentence be served by way of an Intensive Correction Order, with supervision and 250 hours of community service [27]–[31].
Why the court decided this way
The court’s seriousness assessment rested on both the character of the offences and the particular conduct. It accepted that insider trading and tipping undermine public confidence in financial markets and described these offences as serious [20]. The difficulty of detection was relevant: the judge observed that insider trading often involves verbal communications without records and can be difficult for authorities to discover and prove [21], [23]. The court therefore treated general deterrence as important.
The offender’s knowledge aggravated the conduct. Ho had professional financial experience and had received training about the prohibitions. The judge stressed that he knew his legal obligations but did not act in accordance with them [23]. The court also considered the duration and repetition of the offending. Although it was not described as especially sophisticated, it involved a substantial number of trading instances over about one year and seven months [15], [19], [25].
The court also identified mitigating matters. Ho had no prior criminal record, pleaded guilty at the first opportunity, self-reported, made admissions, provided records and offered future assistance. The judge accepted that his remorse was genuine and that his risk of reoffending was extremely low. The court also considered his family circumstances, the loss of employment and the financial losses suffered by him and his family. These matters informed sentence, but did not remove the court’s view that imprisonment was required.
The court applied s 17A of the Crimes Act 1914 (Cth), describing it as requiring that no sentence of imprisonment be imposed unless the court, having considered other available sentences, was satisfied no other sentence was appropriate [25]. The judge concluded that imprisonment was necessary because of the extended course of offending and Ho’s knowledge that his conduct was unlawful. The court separately found that the three-year term could appropriately be served by an Intensive Correction Order [29].
For each count, the court fixed an indicative sentence after allowing for relevant matters. The terms were 12 months for Count 1, six months for Count 2, 12 months for Count 3, six months for Count 4, 10 months for Count 5 and 18 months for Count 6 [27]. The court applied a total discount of 50 per cent to each indicative sentence. It described the components as 25 per cent for the utility of the plea and facilitation of justice, 12.5 per cent for the Ellis discount and past cooperation, and 12.5 per cent for future assistance [26].
The court then imposed an aggregate three-year term. It explained that there should be a significant degree of concurrency because the offences formed a course of offending [28]. The final order included the standard conditions, supervision by Community Corrections and 250 hours of community service [30]–[32].
Before and after state of the law
This judgment is a sentencing decision, not a comprehensive account of the elements of insider trading or tipping. It identifies the statutory provisions under which Ho was sentenced, but does not provide a full doctrinal analysis of how those provisions operate. The judgment’s principal contribution in this case is its application of sentencing considerations to the agreed facts and the offender’s personal circumstances.
The court did state that the maximum penalty for each offence was ten years’ imprisonment and/or a fine of 4,500 penalty units, or three times the total value of the benefit obtained, whichever was greater [2]–[4]. It also observed that Parliament had increased the maximum term from five years to ten years, treating that increase as an indication of the seriousness attributed to such offending by the legislature [22]. The judgment does not provide the date or legislative history of that amendment.
In sentencing, the court relied on the Commonwealth statutory framework it identified, particularly s 16A of the Crimes Act 1914 (Cth) for matters including the course of conduct, market harm, remorse, guilty plea, assistance, deterrence and character [24]. It also applied s 17A to the question whether imprisonment was warranted [25]. Its discussion of an Intensive Correction Order appears in the context of the sentencing decision and the cases placed before it [29].
The decision does not establish a general sentencing tariff for insider trading, tipping, or a particular scale of trades. The indicative terms and aggregate sentence arose from the specific facts, including the repeated offending, the use of multiple accounts, the confidential information involved, Ho’s knowledge, and his unusually extensive assistance. Nor does the judgment quantify market damage or calculate a realised profit attributable to each offence. It expressly states that the financial consequences were difficult to quantify.
Accordingly, a careful account of the “before and after” position from this source is limited. The court referred to the statutory maximum and to a past increase in that maximum, and applied established sentencing considerations to Ho’s case. The judgment does not describe a change to the law resulting from its decision, nor does it purport to create a new test.
Key passages with plain-English translation
At [20], the court said insider trading and tipping “undermine the faith of the public in the stock market or financial markets in general.” In plain English, the court viewed these offences as harmful beyond any individual trade because they can make investors doubt whether markets operate fairly.
At [21], the judge said general deterrence was “always of significant importance” for this form of offending. The court was concerned not only with the particular offender but also with discouraging others from conduct that may be hard to detect. At [23], it added that the extent of damage from a particular offender may be difficult to measure, while the effect on public confidence remains relevant.
At [25], the court concluded that imprisonment had to be imposed. The reasons included the duration of the offending and Ho’s knowledge, from his training, that the conduct breached the law. This finding did not mean the sentence had to be served in prison: the court went on to consider an Intensive Correction Order.
At [26], the court set out the 50 per cent total discount and explained its components. It also recognised overlap between plea utility, facilitation of justice, past and future assistance, and the Ellis discount. This matters because the judge did not treat the different forms of credit as wholly separate, cumulative entitlements.
At [28], the court said significant concurrency was needed to reflect the course of offending. In plain terms, it did not simply add all six indicative sentences together. It considered the relationship between the offences and imposed an aggregate sentence reflecting their connected character.
Finally, at [29]–[31], the court concluded that the three-year term could be served by way of an Intensive Correction Order. The order still constituted a sentence of imprisonment, but its conditions required supervision and community service rather than immediate full-time custody, subject to compliance.
What fact patterns trigger this precedent
The decision is most directly relevant as an example of sentencing where multiple insider-trading offences and a tipping offence form a connected course of conduct. Its facts include a professional investment background, prior compliance training, repeated access to confidential company information, and trading through numerous accounts connected to the offender and family members.
It may also be relevant to sentencing questions where an offender self-reports and provides evidence that would otherwise be difficult for investigators to obtain. The judge placed substantial weight on Ho’s admissions, contemporaneous notes, assistance to ASIC and undertaking to assist in possible proceedings against others. The decision illustrates how the court described the relationship between an early guilty plea, facilitation of justice, past assistance, future assistance and an Ellis discount.
The judgment also addresses the combination of aggravating and mitigating circumstances: repeated offending and knowledge of the prohibition on one side, and remorse, a clean record, low reoffending risk, rehabilitation and substantial cooperation on the other. The sentence reflects the court’s assessment of that combination in this case, not a rule that the same sentence or discount applies whenever similar features are present.
The decision should not be read as determining liability in a contested case. The facts were agreed, and Ho had pleaded guilty. The court did not resolve disputed evidence about whether the communications or trades occurred. It also did not determine what Mr Prunty or his organisation did in response to the information, noting that the facts did not include that information.
How later courts have treated it
The judgment supplied here contains no later judicial decisions discussing or applying R v Ho. It was decided in September 2020 and the provided text does not give a subsequent citation history. It is therefore not possible, from this source alone, to say whether later courts have followed, distinguished, criticised or otherwise treated the decision.
The cases that appear in the judgment are authorities considered by King SC DCJ when deciding whether an Intensive Correction Order was appropriate: R v Glynatsis [2012] NSWSC 1551, Khoo v The Queen [2013] NSWCCA 323, Hartman v DPP NSWCCA 261 and R v Holt [2016] NSWSC 4634 [29]. The judgment does not explain their individual principles or describe them as later treatments of R v Ho. It also cites Parker v R [2011] 87 ACSR 52 for the characterisation of insider trading as a form of cheating or fraud [20].
Those references show the authorities considered in the sentencing exercise, but they do not establish how the decision has been treated since. Any account of later judicial treatment would require sources beyond the judgment provided.
Still-open questions
Several issues remain outside the scope of the decision. First, because the facts were agreed and the offender pleaded guilty, the judgment does not examine contested questions about what information was inside information, when it became generally available, or whether a particular trade was made while the offender possessed it. It records the agreed facts and sentence rather than resolving those issues as contested legal questions.
Second, the judgment does not quantify how much financial benefit was caused by the charged conduct. It notes that the financial consequences were difficult to quantify, describes the total investment and trading proceeds, and records that some securities became worthless after suspension. It does not attribute specific profits or losses to each count.
Third, the court recognised that it could not precisely determine the extent to which an individual offender damaged market confidence. It treated market confidence and general deterrence as important without providing a method for measuring that harm [21]–[23].
Fourth, the judgment does not provide a general formula for balancing the components of the 50 per cent discount. The judge expressly recognised overlap among the plea, facilitation and assistance considerations [26]. The allocation in this case is an explanation of the sentence imposed on Ho, not a statement that the same percentages apply to other offenders.
Finally, the source does not describe any subsequent appeal or later decision concerning Ho’s sentence. It also does not provide a detailed analysis of the Intensive Correction Order framework beyond the court’s conclusion that it was appropriate in this case. Those matters cannot be answered from this judgment alone.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have it checked by a qualified Australian lawyer.
Catchwords
Mr Elliot Hyde
Judgment (16 paragraphs)
[1]
Solicitors:
CDPP: Mr Timothy Postma
Defence: Mr Stephen Klotz, Hall & Wilcox
File Number(s): 2020/00046865
[2]
Judgment
HIS HONOUR: Michael Ming Ho appears for sentence in respect of six offences.
Counts 1 and 5 are each offences of insider trading contrary to s 104(3A)(1)(c) and (d) and 1311(1) of the Corporations Act 2001. Each of those offences has available a maximum penalty of ten years' imprisonment and/or a fine of 4,500 penalty units, which equates to $810,000 or three times the total value of the benefit obtained, whichever is the greater.
Counts 2, 4 and 6 are also insider trading and contrary to s 104(3A)(1)(d) and 1311(1) of the Corporations Act 2001. The maximum penalty is exactly the same as previously mentioned in relation to Counts 1 and 5.
The sixth offence, which is Count 3, is one of what is generally referred to as "tipping", contrary to s 104(3A)(2) and 1331(1) of the Corporations Act 2001. The available penalty is again the same as in relation to each of the other offences.
The facts have been agreed and are very detailed, including schedules of trading in various individual accounts and I do not intend in these reasons to spend the time reciting the fine detail that has been provided by way of the agreed facts.
Between 18 July 2016 and 10 February 2018, the offender traded in shares and options of BIG Un Limited (BIG) whilst in possession of inside information, that being Charges 1, 2, 4, 5 and 6, and on 14 October 2016, he communicated inside information to an associate, Mr Christopher Prunty, which relates to Count 3 or Charge 3. By utilising three different brokers and seven different trading accounts during the offending period, Mr Ho acquired securities and also procured the acquisition of securities by associate family members and companies with a total investment of approximately $1.6 million.
The investigation commenced in this on 12 March 2018 when Mr Ho, through his legal representatives, self-reported that he had committed offences contrary to the Insider Trading Prohibitions. Mr Ho voluntarily attended two interviews with ASIC officers on 13 March 2018 and 4 May 2018. During the interviews Mr Ho made voluntary admissions to ASIC in respect of his insider trading.
Between 31 December 2014 and 23 February 2018, Big Un was a public company listed on the Australian Securities Exchange. Big Un's core operations were conducted by its wholly owned subsidiary, BIG Review TV Limited (BRTV). BRTV's principal business was the provision of video marketing services for small/medium enterprise clients.
During the period 1 July 2016 to 21 February 2018, BIG shares traded in the price range of 0.11 cents to $4.79 per share, and during the same period, BIG options traded in the price range of 0.01 cents and $4.50 per option. The securities in BIG were amongst the highest performing of companies on the ASX in 2017. However the company was suspended from trading on 21 February 2018, and was ultimately removed from the ASX on 29 August 2018.
[3]
MR HO'S EMPLOYMENT AS A FINANCIAL ANALYST AND KNOWLEDGE OF THE INSIDER TRADING PROHIBITIONS
Between 1 September 2014 and 28 February 2018, Mr Ho was employed as an analyst with investment manager, Maple Brown Abbott Limited. The investment team at MBA was involved in researching companies for potential investment opportunities for MBA's investment fund. Prior to his employment with MBA, Mr Ho had worked as:
A Financial analyst at Helmsec Global Capital from 2007 to 2010;
Associate Director at Merryl Lynch, an investment bank, from 2010 to 2013 and,
An investment associate at Wesfarmers Limited from 2013 to 2014.
By virtue of his education and employment, Mr Ho had knowledge of the legal prohibitions against insider trading in Australia. Additionally, he received training in relation to insider trading and market manipulation as part of the compliance requirements with MBA.
[4]
MR HO'S ENDEAVOURS TO MEET WITH THE CEO OF BIG
On 12 July 2016, BIG released an ASX announcement via the ASX Market Announcement Platform entitled, "June 2016 Quarterly Update", which gave quarterly guidance of $1.8 million in cash receipts from customers, a growth of 53% from the prior quarter and 676% from the fourth quarter of the financial year ending 30 June 2015.
Mr Ho reviewed the June 2016 quarterly update and also a BIG investor presentation entitled, "BIG Un Limited Investor Presentation May 2016". On 12 July 2016, Mr Ho telephoned the CEO of BIG, Richard Evertz. Mr Evertz advised Mr Ho that he was busy and ended the call. Further, on the same day Mr Ho sent an email to Mr Evertz with the subject line, "Investor Call Seeking to 'Get an Intro to the Business'". When introducing himself, Mr Ho indicated to Mr Evertz that he worked in the investment team at MBA. On 13 July 2016, Mr Ho again telephoned Mr Evertz and during that telephone call, the prospect of organising a meeting between the two was discussed. Between 13 July 2016 and 19 July 2016, Mr Ho was contacted by Mr MacDonald, a broker with RBS Morgans, to arrange a meeting between Mr Ho, Mr Evertz and himself. A meeting was scheduled for 19 July 2016.
Mr Ho understood that Mr MacDonald was a broker who was, "clearly helping do investor meetings for BIG". Prior to meeting with Mr Evertz, Mr Ho acquired an initial parcel of shares and listed options on 13, 14 and 18 July, that being in total an investment of $11,232.15. He acquired those after reviewing the June 2016 quarterly update and on the basis of his own research. That is, he had determined from his own research that the company appeared to be doing well and had good prospects, encouraging him to make an investment which was not as the result of any insider trading knowledge.
[5]
CHARGE 1
On 19 July 2016, Mr Ho and Mr Evertz and Mr Macdonald met at MBA's Sydney office. During that meeting Mr Evertz disclosed to Mr Ho information which was not publicly known in relation to the company. Mr Ho recorded the matters discussed in a file note created the same day. Mr Ho was subsequently invited to attend BIG's sales centre the following day so that he could have a "walkthrough of BIG's processes and sales machine". He attended and noted the number of employees and the list of customers observed on a whiteboard, said to have signed contracts with the company. On 29 July 2016, BIG released its June 2016 quarterly update stating the company's revenue for the July quarter and disclosing BIG's member base.
Between 19 July - that is, the first meeting with Mr Evertz - and 2 September 2016, the offender invested through trading accounts in the name of his wife and himself a total of $61,547.50 in shares and options. Between the two accounts, he acquired 256,706 options and 300,000 shares in BIG as well as a further 1,140,500 options with the combined value as referred to. That trading activity was undertaken in circumstances where Mr Ho was in possession of inside information that he ought reasonably to have known was inside information, that is, information not generally available, and that if it were generally available, a reasonable person would expect it to have a material effect on the price or value of BIG shares and options.
Subsequent to those purchases, on 8 September 2016, BIG released an announcement via the ASX Announcements Platform entitled, "Guidance for September Quarter". The announcement included revenue guidance for the September quarter as set out in the agreed facts. The disclosure was of what might be referred to as something less than had previously been indicated to the offender by Mr Evertz.
[6]
CHARGE 2
On 8 September 2016, Mr Ho and Mr Evertz met at the Livelo Café located on Clarence Street, Sydney. During the meeting, Mr Evertz disclosed inside information again as to the expected trading achievements and its intended additional cost base as a consequence of growing its London operations. On the same day that the offender met with Mr Evertz and the inside information was disclosed to him, BIG released a guidance for the September 2016 quarter via the ASX Market Announcement Platform, disclosing that BIG expected to achieve quarterly sales of $2.3 million, a 28% increase on the previous June 2016 quarter. Whilst consistent with the figure disclosed to Mr Ho during the 19 July meeting, the guidance figure was below the 30% to 40% disclosed to Mr Ho at the 8 September meeting.
On 13 September 2016, BIG announced a joint venture with Intermedia Group Pty Limited, which disclosed a conservative gross revenue potential to be derived from the joint venture in excess of $4 million over the next 12 months, using existing resources.
In addition to the inside information obtained by Mr Ho during the 8 September meeting, as a result of either a telephone conversation or a meeting between them, on or about 13 September 2016, Mr Ho was also in possession of further inside information, being that the actual revenues to be generated by an announced joint venture with Intermedia Group Pty Limited, would be $10 million over the next twelve months as opposed to the "in excess of $4 million" estimate publicly disclosed in the 13 September 2016 announcement via the ASX.
After the 8 September meeting, Mr Ho created a file note which was subsequently amended a few times from the period of September or October, including further disclosures of inside information on 13 September 2016, as referred to in the facts. Mr Ho considered the information as to the quarter on quarter growth and also the build-up of cost to be "important" and based on that information provided on the 8th and 13th September, Mr Ho calculated that BIG would achieve revenues for the financial year of 2017 of $15 million and a cost base of $12 million per annum to support a revenue base of $25 million. On 30 September 2016, BIG released "Appendix 4G and Corporate Governance Disclosures" and its "2016 Annual Report" to the market via the ASX Market Announcement Platform.
The inside information provided to Mr Ho had not been made generally available by the release of either document. While in the possession of the inside information received by Mr Ho on 8 and 13 September 2016, between 3 October 2016 and 6 October 2018, Mr Ho personally placed orders to trade through his wife's CommSec account on 3 October and twice on 6 October. The total investment was $3,686.25 and resulted in the acquisition of 305,750 options in BIG. That trading was undertaken in circumstances where the offender knew he was in possession of inside information, being information that was not generally available, and which, if it were generally available, a reasonable person would expect it to have a material effect on the price of or value of BIG options.
[7]
CHARGE OR COUNT 3
On 14 October 2016, Mr Ho sent an email to a Mr Prunty, at the time a fund manager at QVG Capital Pty Limited. He had previously been employed as a fund manager at Ausbil Investment Management Limited. The email included information contained in Mr Ho's September file note as particularised in relation to Charge 2 and a screen shot of a model prepared by Mr Ho in relation to BIG. On 28 October 2016, Mr Ho emailed Mr Evertz and Mr Prunty in an email titled, "Investor Meeting". In the email, he wrote:
"A close acquaintance of mine, Chris Prunty, is a fund manager at Ausbil. Runs $400M [funds under management] and is one of the best stock pickers in the market, in my opinion.
...
Do you think you could make time next week to meet with him?"
In sending the email to Mr Prunty, Mr Ho communicated inside information in circumstances where he ought reasonably to have known that Mr Prunty would, or would be likely to, apply for, acquire, or dispose of Division 3 financial products or procure another to apply for or acquire or dispose of same.
(I note that the facts do not include any information as to whether Mr Prunty or the organisation that he worked for acted in response to the information provided.)
[8]
CHARGE 4 OR COUNT 4
After the September revenue update by BIG on 20 October 2016, Mr Ho was still in possession of inside information to the effect that actual revenues to be generated by the announced joint venture with Intermedia Group Pty Limited would be $10 million over the next 12 months as opposed to the "in excess of $4 million" estimate disclosed publicly in the 13 September 2016 announcement on the ASX.
As a result of acting on the insider information, Mr Ho personally placed all his trades through his wife's CommSec account. Between 20 October 2016 and about 9 November 2016, Mr Ho procured, through his wife's account, 92,912 options in BIG to the value of $2,206.66. Again, the trading activity was undertaken in circumstances where he knew that he was in possession of inside information.
[9]
COUNT OR CHARGE 5
Trading activity by Mr Ho in respect of this count took place between 24 November 2016 and 29 November 2016. During this period, Mr Ho was still in possession of inside information to the effect that the actual revenue to be generated by the announced joint venture with Intermedia Group Pty Limited would be $10 million over the next 12 months as opposed to the in excess of $4 million estimate disclosed publicly in the 13 September 2016 announcement on the ASX. In addition, on 22 November Mr Ho and Mr Evertz met at the Four Seasons Hotel. During that meeting, Mr Evertz disclosed further inside information to the offender to the effect that:
BIG was considering a potential acquisition of BHA Media Pty Limited from Intermedia Group Pty Limited;
BHA was earning revenues of $3 million per annum;
BHA had 36,000 small/medium enterprise clients and,
BIG's targets included signing up 15% of the 36,000 clients of BHA to the BIG product.
On 26 November 2016, Mr Ho was provided with a copy of the BIG investor presentation template which contained in the presentation all the information that had been disclosed to the ASX. On 28 November 2016, Mr Ho attended BIG's annual general meeting. On 29 November 2016, BIG released a presentation titled, "CEO Overview Following AGM 28 November 2016", via the ASX Market Announcement Platform. The inside information previously referred to as the joint venture, and the acquisition of BHA Media, the earnings of BHA and the client base of BHA were not made generally available by release of the presentation.
Acting on the inside information, the offender purchased further options through his wife's account and his own account. On 25 and 28 November 2016, Mr Ho acquired 217,167 options in BIG and procured the acquisition of 401,917 options in BIG by Mrs Ho to the combined value of $27,686.53. The trading activity was undertaken in circumstances where he knew that he was in possession of inside information not generally available.
On 30 November 2016, BIG announced the proposed acquisition of BHA via the ASX Market Announcement Platform, and that announcement also disclosed that BIG had entered into an agreement to acquire BHA, that BHA would provide BIG with revenues of $3 million per annum and give access to 36,000 BHA clients to cross sell its product to.
[10]
CHARGE OR COUNT 6
On 8 December 2015 BIG announced via the ASX "a sponsorship arrangement" with First Class Capital Pty Ltd (FCC). FCC was an Australian based financial services company providing commercial credit to small/medium businesses. BIG did not explain to the market that this sponsorship arrangement was essentially a working capital facility for BIG's subsidiary, BRTV. One of FCC's operating companies was First Class Securities Pty Limited (FC). Finstro is a platform operated by FC which enables, small/medium enterprises (SME) "to invest in growth by managing their cash flow and providing working capital facilities to pay suppliers".
In late November 2016, a second sponsorship agreement was negotiated between FCC and BIG to further document the continued relationship between the parties. The key feature of the agreement was that FCC (via its Finstro platform) would advance funds to BRTV to produce promotional videos. The agreement was signed in August 2017.
On 10 January 2017, Mr Ho and Mr Evertz held a telephone call whereby Mr Evertz disclosed inside information to the effect that BIG had entered into an agreement in which Finstro would fund $20 million worth of customer purchases from BIG, and Mr Ho made a file note of the conversation. During that call, Mr Evertz sought Mr Ho's opinion as to whether the information disclosed was a "big deal". In response, Mr Ho advised that the question of whether or not the information was material was a question for the Board and the ASX to determine. Mr Ho resolved to point the company to the ASX Rules and later that day emailed Mr Evertz a copy of the ASX Guidance Note and directed Mr Evertz to key extracts relevant to determining whether or not information should be disclosed to the market.
Mr Ho in his second interview with ASIC stated that whilst he did not consider the information to be material at the time, he had subsequently realised that the information provided by Mr Evertz was in fact material, given the advancement of the $20 million fund meant that BIG was able to accelerate its growth.
While in possession of the inside information, Mr Ho, on 10 January 2017 and between 13 January 2017 and 9 February 2018, placed orders to trade through a number of trading accounts, being his wife's CommSec account, a CommSec account held jointly under the names of a Dr Maria Ho and Dr Kian Ho (Mr Ho's parents) and a CommSec account held in the name of Mila Investment Co Pty Ltd, being the corporate trustee for the Mila Investment Trust, of which Mr and Ms Ho were the beneficiaries; in addition, an account in the name of Mila Investment with Red Leaf Securities and accounts in the name of Ms Ho and Mila Investments with Netwealth Investments Ltd.
[11]
DISCLOSURE TO THE MARKET OF THE INSIDE INFORMATION OF THE SUSPENSION OF BIG
In February 2018, there was a rapid decline in the value of BIG securities which coincided with its accounting practices being publicly questioned. On 5 February 2018, Ownership Matters Pty Ltd (the Ownership Report), a firm providing governance advisory services to institutional investors, released a report on BIG which raised questions regarding BIG's, "reliance on script to pay service providers", "unusual share issuances at large discounts", and the reported cash receipts of the company.
On 8 February 2018, the Australian Financial Review (AFR), published an article entitled, "BIG Un Limited's Cash Flow Secret Revealed". The article disclosed that BIG "customers are paying for services with money advanced to them" by FCC. On 12 February 2018, BIG released an announcement to the market via the ASX Platform entitled, "Shareholder Update". In the announcement, BIG stated, amongst other things, that BIG continued to use the Finstro financing arrangement to help accelerate its market share growth, however that the company was not dependent on the arrangement for achieving future growth on a sustainable basis.
On 14 February 2018, the ASX sent BIG an "aware query" letter seeking BIG's response to a number of questions and requests for information, including the agreement between BRTV and FCC.
On 19 February 2018, the ASX announced that trading in BIG's shares and options would be "placed in a Trading Halt Session State at the request of the company". On 20 February 2018 BIG replied to the letter of 14 February 2018. The response included the following:
Currently approximately 35% in BIG's contracts globally are financed by FCC;
The arrangement with FCC (through its Finstro platform), enables the company to offer SME businesses, the ability to purchase BIG video subscription packages on deferred payment terms. Like many big retailers, by partnering with Finstro, BIG is able to offer its SME customers interest-free deferred payment terms and no upfront cost of production;
On 9 August 2017, BRTV signed a sponsorship agreement with FC which documented the continuing relationship between the parties;
Pursuant to the Agreement, FC makes an amount of $20 million (Sponsorship Pool) available for the exclusive use of corporate and other promotional videos offered to be produced for, and delivered to, customers at BRTV approved by FC (customers). Currently, approximately $19 million of this amount is utilised by BRTV.
[12]
THE FINANCIAL CONSEQUENCES OF THE INSIDER TRADING
Between 18 July 2016 and 10 February 2018, BIG shares and options had appreciated in value to such an extent that Mr Ho and associate family members and companies stood to make an enormous profit from their holding of BIG shares and options. During the period of the offending, Mr Ho, his family and associated companies acquired BIG shares and options with a total investment of approximately $1.6 million, made up of:
Approximately $422,000 worth of BIG shares and options;
Approximately $1.018 million worth of listed BIG shares that were acquired as a result of the exercise of 4,072,011 call options (with a 25 cent strike price and the underlying each share price of $4.40). Those options had been due to expire in December 2017;
Approximately $100,000 worth of unlisted BIG options with an expiration of December 2018 and a strike price of 25 cents. The acquisition of those options do not form part of the charged conduct; and,
Approximately $122,000 worth of BIG shares, the acquisition of which does not form part of the charged conduct.
The financial consequences of Mr Ho's insider trading activity are difficult to quantity. However:
At all relevant times, Mr Ho traded with the objective of making a financial profit and minimising losses;
Many of the BIG shares and options sold by Mr Ho during the period January 2017 to December 2017 were sold in order to fund further purchases of BIG shares, included clearly by exercising the BIG options which were exercised in December 2017;
Between 13 July 2016 and 9 February 2018, the price paid by Mr Ho and associated family and companies to acquire BIG shares and options was approximately $1,664,000 whereas funds realised from selling BIG shares and options were approximately $1,738,577.23;
After the BIG shares and options were suspended from trading, on 21 February 2018, Mr Ho was effectively left holding securities which are now worthless.
In addition to that, material tendered on behalf of Mr Ho on sentence indicated that as a result of successful trading, a substantial tax liability was incurred.
[13]
CESSATION OF MR HO'S EMPLOYMENT AT NBA
On 20 December 2017, Mr Ho received an email from Jonathan Schapiro of the AFR. He met with Mr Schapiro the following day for an "off the record" meeting. On 28 December 2017, Mr Schapiro published an article in the AFR entitled, "The BIG Winners from BIG Unlimited, 2017's Top ASX Stock", in which Mr Ho was identified as a, "BIG Winner"
On 26 February 2018, Mr Schapiro contacted Mr Ho seeking clarification on whether Mr Ho provided services to BIG in exchange for securities in the company. Two days later, Mr Schapiro advised Mr Ho that he intended to make contact with Mr Ho's employer for further information in relation to Mr Ho's involvement in BIG. Mr Schapiro advised Mr Ho that if he felt like there was something to disclose, "now is probably the time".
On 28 February 2018, Mr Ho told his employer at MBA about his past trading in BIG. MBA advised Mr Ho that he could either resign or he would be terminated because his conduct had breached the firm's policies about the requirement to seek prior approval for such conduct. Mr Ho subsequently resigned.
[14]
MR HO'S PARTICIPATION IN TWO VOLUNTARY INTERVIEWS AND ADMISSIONS MADE TO THE OFFENDING
Less than two weeks after resigning from his position with NBA, Mr Ho contacted ASIC through his legal representatives to self-report his involvement in insider trading. In addition to participating in two voluntary interviews in which he made significant admissions to the offending conduct, the offender provided ASIC with documents to assist in the investigation, including his own detailed file notes and a chronology.
Mr Ho's admissions were provided in circumstances where obtaining independent evidence to prove that Mr Ho traded in securities whilst in possession of inside information would have otherwise been difficult for ASIC investigators. During the course of the interview with ASIC, Mr Ho relevantly made the following admissions:
That between the period of July 2016 and February 2017, he was progressively buying securities in BIG both in shares and options in circumstances where he was in possession of information that was not generally available to the public as it had been obtained through interactions Mr Ho had directly with the CEO. Upon reflection, Mr Ho stated that he had traded with the benefit of "important" information that was not generally available and that he had done "something wrong in that respect";
Whilst he acknowledged that he was in possession of information that was not generally available to other investors, Mr Ho stated that he did not step back and reflect upon his actions in terms of whether he was operating within the framework provided by the Corporations Act;
Mr Ho admitted that none of his meetings or communications with BIG staff were part of his professional role at MBA but were instead engaged in for his own personal benefit. He stated, "This was a personal investment of mine that I was following a little too close obviously".
With specific reference to the inside information particularised in relation to Charge 1, Mr Ho admitted that the information was not generally available and that he traded progressively over July and August with the benefit of that information. Mr Ho stated:
"when the CEO says "aspirationally, I would like to grow revenues for four consecutive quarters", he said that in July 2016: And then I look at the ASX announcement it doesn't say anything about the guidance, I now know that you should not actively trade in that stock because that is not information that's been disclosed to a mum and dad investor."
[15]
SUBJECTIVE MATTERS
Tendered on behalf of the offender is: a reference from the Reverend Michael Turner dated 26 February 2020, a reference from Michael Conway, a friend of the offender's over a period of the last ten years and a person also involved in the stockbroking industry, dated 2 March 2020, a reference from Mr Nicholas Chernih, a friend of the offender's over a period of 15 years, dated 3 March 2020, a reference from Jonathan Fletcher, being the CEO of Running Science, dated 21 March 2020, a business with which the offender has become engaged since losing his job as a result of this offending, a reference from Professor Thalia Anthony, being a Professor in Law at the University of Technology, and a person who has become acquainted with the offender as a result of his involvement with Mr Fletcher's business involved in running groups and coaching, dated 21 April 2020, a reference from Ben Guo, the founder and CFO of Genex Power, who has known the offender since 2009 - the reference being undated, and a further reference from David Hazelwood who again has only known the offender since he has been charged in relation to these matters.
In addition, provided to the Court is a confidential Exhibit, being Exhibit 2, relating to the offender's offer of assistance, outlining the extent of his past assistance and his possible future assistance.
In addition, tendered on his behalf was the tax return for the financial year 2018 in respect of his wife and an academic transcript of Mr Ho's, dated 6 February 2020, as to his participation in relevant courses since being charged in relation to these matters.
As previously referred to, the offender participated in two lengthy interviews with ASIC staff in which he provided full and complete information in relation to his conduct as well as providing them with his own notes of conferences with Mr Evertz and relevant information, and that assisted them in understanding what he had done as well as what others had done.
Having considered the material disclosed by the offender to ASIC and the letter of assistance from ASIC, Senior Specialist of the Markets Enforcement Section, Mr Colin Luxford, dated 3 June 2020, I am of the view that in the absence of the offender coming forward, it is highly unlikely that ASIC would have ever obtained sufficient evidence to prosecute him for any offence. He is in my view, clearly entitled to what is commonly referred to as an Ellis discount for revealing his conduct in those circumstances. Although his trading would obviously have been known, the basis on which he traded was entirely something between himself and Mr Evertz and in the absence of ASIC acquiring his own notes evidencing their relationship, independently of him, it is highly unlikely that they would have ever been able to place themselves in a position to prosecute him.
[16]
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: 19 May 2021
Ho was convicted on all six counts and sentenced to three years’ imprisonment, commencing 11 September 2020 and expiring 10 September 2023, to be served by way of an Intensive Correction Order with standard conditions, supervision and 250 hours of community service work.
On 20 October 2016, BIG released a further announcement, "Revenue Update September 2016 in excess of $2.55 million", via the ASX. It provided a number of announcements in general consistent with the information provided to Mr Ho during the 8 September meeting. That is, that for the September quarter, growth was expected to be 30% to 40% quarter on quarter.
On 20 October 2016, the ASX sent an 'aware query' letter to BIG querying the price increase following the announcement of the September revenue update given.
Utilising those accounts, the offender caused the sale and purchase of both BIG shares and options. The total value of the securities purchased was $327,669.89 and the total value of securities sold was $1,738,577.23. In summary, between 13 January and 9 February, Mr Ho procured:
M Ho and K Ho to acquire 100,000 shares in BIG;
M Ho and K Ho to dispose of 42,500 options in BIG;
M and K Ho to acquire 89,878 shares in BIG;
Mrs Ho to dispose of 324,878 shares in BIG;
Mrs Ho to acquire 663,338 options in BIG;
Mrs Ho to dispose of 60,421 options in BIG;
Mila Investment to acquire 165,000 shares in BIG;
Mila Investment to dispose of 30,000 shares in BIG;
Mila Investment to acquire 276,338 options in BIG and,
Netwealth to dispose of 357,350 shares in BIG
1. 257,350 which had been held on behalf of Mrs Ho;
2. 100,000 which had been held on behalf of Mila Investment.
The trading activity, the subject of Charge 6 was undertaken in circumstances where the offender ought reasonably to have known that he was in possession of inside information not generally available and that if available would have had a material effect on the price or value of BIG shares and options.
In addition to those trades referred to, the offender also exercised the following off market trades:
On 16 December 2017 - 473,873 BIG options held in Mr Ho's name were exercised for $118,468.25 (at 0.25 cents per option);
On 21 December 2017 - 626,338 BIG options held in the name of Mila Investment Trust were exercised for $156,584.50 and,
On 27 December 2017 - 2,971,800 BIG options held in the name of Mrs Ho were exercised for $742,950.
On 3 January 2017, the price of ordinary shares in BIG reached a high of 0.26 dollars and closed at 0.25. The facts indicate that at that point, the listed options in BIG can be thought of as trading "in the money".
Consistent with the information disclosed to Mr Ho on 10 January 2017, the response letter disclosed inter alia that the FCC sponsorship pool (fund) was $20 million and that it was made available to fund customer purchases of BIG's product through its Finstro platform.
On 20 February 2018, the ASX sent BIG a further letter seeking clarification promptly regarding the arrangements with FCC which it was noted was being released to the market on 23 February 2018.
On 21 February 2018, the ASX had announced on the Market Platform that BIG would be suspended from quotation pending the release of BIG's response to the second letter. On 22 February BIG responded stating inter alia that:
Cash receipts for the quarter ending 31 December 2017 of $22,510,000 comprised $18,084,000 attributed to FC's sponsored "paid customers".
On 23 February 2018, BIG released the two letters from the ASX and their response to each, and the ASX announced on that day that BIG would continue to be suspended from quotation. BIG was ultimately removed from the ASX list on 29 August 2018 after entering into administration on 24 August 2018.
With specific reference to the inside information particularised in relation to Charge 2, Mr Ho admitted that the information obtained from Mr Evertz in relation to the quarter on quarter growth and also the build-up of costs was "important". Additionally, Mr Ho was aware that the information provided by Mr Evertz as to anticipated revenues arising from the joint venture with TIG was not generally available, given Mr Evertz specifically advised Mr Ho that an amount of $4 million had been announced to the market, however he believed they could actually achieve $10 million;
With specific reference to the inside information particularised in relation to Charge 6, Mr Ho stated as follows:
"The key information out of this I believed was the information around Finstro. Now I don't. So at the bottom Finstro is a $20 million fund and they've agreed to lend SME's up to $20 million which means BIG can accelerate their growth. So at the time and in factoring the whole course of 2017, I did not spare any thought or the materiality to this Finstro relationship. In fact, if you had asked me at the time, I would have thought it's a non material sponsorship agreement. I have subsequently realised that this was something that was in fact material to the business model and the key point here was that Finstro was a $20 million fund. So I wrote that down. Richard gave me that information. I didn't know what it actually meant until 14 months later."
In relation to the offender's occupation with Maple Brown Abbott, I note this matter is not a matter where he breached in any way the trust of his employer. The only relationship that Maple Brown had in respect of this is that he was employed there, and it is no doubt because he was employed by Maple Brown Abbott that he was provided with the opportunity to have the first and ongoing meetings with Mr Evertz.
BIG Un Ltd was a business beneath the interest of a firm such as Maple Brown Abbott. Its shares and options traded in cents or fractions of cents. It was what is probably colloquially referred to as a "penny dreadful" company where minor fractional changes in the value can result in significant losses or profits. In my view, it is clear that there was no breach by the offender of his employment relationship with Maple Brown Abbott, who were otherwise not in any way concerned in this matter.
In addition, the offender has participated in lengthy interviews detailing all of his knowledge of what he did and others did, relevant to any possible future prosecution of other persons. His evidence in respect of the potential prosecution of at least one other person is referred to as being of high value. Indeed, in my view, in the absence of evidence from the offender and material supplied by him, there would be little prospect of that person being prosecuted for any offence other than what can be demonstrated by what was or was not disclosed to the Australian Stock Exchange at various times, and what appears to be the eventual downfall of the company, that it was treating conditional contracts as final contracts, as a result of which it received finance inflating its income from Finstro.
In my view the assistance provided by the offender to ASIC into his own conduct could not have been more complete than it is. I accept that his assistance in giving an undertaking to give evidence in accordance with his various statements in the future is of very high value to ASIC. Offences of this nature, that is insider trading or tipping, are frequently not capable of being discovered because it happens by way of verbal communications without records. Those involved are not generally interested in disclosing their own criminality or the criminality of any other person that they were involved with. The offender is entitled not simply to an Ellis discount for disclosing his offending but also to a discount for assistance both past and future.
The offender entered a plea of guilty in relation to each of the charges in the Local Court on the first mention. He is entitled to a discount for the utility alone of a plea of guilty in those circumstances. He is also entitled to a discount on the basis of what was clearly a desire to facilitate the course of justice by the manner in which he has dealt with the matter and his assistance to the authorities.
The offender is 33 years of age. He had been born in Australia in 1987. He has been married since 2013 and there are two children in the marriage, neither of the children apparently having reached school age. He has no criminal record in Australia or elsewhere. Despite the fact that he has incurred losses for his parents by his trading on their behalf, they continue to support him and have been present on the last occasion and again today. Their losses were not insignificant.
The offender holds a Bachelor's Degree in Commerce and Engineering, having graduated from the University of New South Wales on 30 August 2010. Prior to that he attended primary school at a Public School and commenced Sydney Grammar School from Year 5 to Year 12. He had a normal childhood and excelled at school and university academically and at sport. He has one older brother and a younger sister, and a younger brother.
I have previously referred to his work history and the loss of his job at Maple Brown Abbott. Since his resignation, he worked for a period at Finlancer Pty Ltd, a wealth management firm, being initially engaged as a contractor from May to September 2018, and was then employed for the following 17 months from October 2018 to 24 February 2020. At that time he secured work on a five to six day per month basis performing bookkeeping services and he has received a small income from coaching runners until mid March 2020 when the COVID 19 lockdown forced the running club to cease. Following his cessation of employment with Finlancer, he has been largely financially dependent on his wife, who works for an insurance company. He continues to do casual bookkeeping and spends his time providing care for his young children and volunteering for a community organisation in Rozelle. He has also been volunteering as a community running coach since the partial lifting of COVID 19 restrictions in May of this year.
While a number of these references are from persons who have only known him since he committed these offences, and members of the clergy are always soft touches for a good reference, I accept that the references provided to the Court are genuine expressions of the opinions of their authors, and I accept in the circumstances, that the offender has demonstrated on a continuing basis since first going to ASIC, genuine remorse and contrition of the highest order.
I accept that because of the nature of this offending, the offender is unlikely to be able to return, at least in the near to medium future, to work in any related field. The financial end result was not the benefit he anticipated in what I interpret as being an effort to advance the family's financial situation and also as a matter of ego to prove his ability to successfully trade in the market, but a substantial loss to himself and his family, including his parents.
I am also of the view from having read of all of the material that Mr Evertz's interest in meeting with the offender was because he potentially saw the offender as someone who might have some direct or indirect influence on the market for BIG Un's shares or options, and was deliberately cultivating him for that purpose. The insider information provided was frequently more glowing than anything released to the stock exchange and indeed, at the end of the day, the BIG Un enterprise collapsed because it appears that it was fraudulently representing its contracts in order to enhance its market value.
Of course, because the offender was foolishly taken in is not really a matter in his favour, but I do take into account to some extent in a minor way, that in my view he was duped from the outset. In my view, the offences themselves were not particularly sophisticated and were certainly opportunistic as the opportunities arose from time to time with additional information. I note in particular, the offender had already decided to invest in the company before he had any inside information and had in fact done so. That was no doubt a contributing factor to his ongoing interest.
The amounts invested are of course relevant to an assessment of the seriousness of the individual charges, although this was in effect, a course of ongoing misconduct. Count 1 was a total investment of $61,547. Count 2, $3,686, Count 4, $2,206, Count 5, $27,686 and Count 6 involved both significant buying and selling. That is the purchase of $327,669.89 of securities from the sale of $1,738,577.23 of securities, although at the end of the day, the offender and his family and associated companies were left holding what might be referred to as an empty bag of securities.
In addition to all of the references that have been provided, there is a Sentencing Assessment Report under the hand of Billy Jo, dated 21 August 2020. Relevantly, it states that he continues to have the close support of his family; that he accepted that he had acted out of self-interest and greed, as he has admitted in his ASIC interviews. It also indicates that he stated that he was in part driven by a desire to demonstrate his knowledge of trading in shares, options and his ability to do so but accepted that he was motivated to offend for financial gain and financial security. He indicated that he had had financial pressures in his lifestyle including a home mortgage, and child care costs as contributing factors to his motivation. As a result of the loss, he was now fully drawn on his home mortgage. He indicated insight into the impact of his offending, reporting that his offending behaviour impacted mum and dad investors who did not have the benefit of insider knowledge and indicated that he had decided to report himself to ASIC when considering his daughters and the life lessons he wanted to instil in them, and because he wanted to take ownership of his behaviour.
He is assessed as being a low risk of re offending. I have already indicated that I accept that he has expressed genuine remorse and contrition to a high degree. I accept that he is a low risk of re offending and in fact, in my view, he is an extremely low risk of re offending.
As to rehabilitation, the offender has never been in trouble before. Although the offending happened over a one year and seven month period, and involved all up a substantial number of trading instances, I am of the view, in the circumstances, that there is a very high prospect of rehabilitation. Indeed, in view of his disclosure to ASIC and his offer of assistance, he has essentially indicated that he has rehabilitated himself.
I accept, as submitted by the Crown, that insider trading or tipping are serious offences as they operate to undermine the faith of the public in the stock market or financial markets in general. It has been characterised in the past as a form of cheating or fraud (Parker v R [2011] 87 ACSR 52).
General deterrence is always of significant importance in relation to the sentencing exercise for this form of offending. As previously referred to, it is extremely difficult to detect in most cases and requires a high level of professional skill to be exercised by the relevant authorities who in fact uncover or detect such offending and to be able to evidence it to the degree required for prosecution.
In this matter I do not perceive specific deterrence as being of significance in relation to the determination of sentence but general deterrence must remain a significant factor to take into account. It is clear that the legislature takes a dim view of such offending as the maximum penalty was increased some years ago from five years to ten years, which in itself emphasises the objective seriousness of such offending in the eyes of parliament and the importance of imposing a sentence that deters others from offending.
The offender had previously received training in relation to insider trading and the prohibitions against it and his conduct in committing these offences with that knowledge is significant. That is, he knew his legal obligations but failed to act in accordance with them. It is of course never possible to determine the extent to which an offender such as an insider trader or a tipper damages the market, but it is the undermining of the public's confidence in financial markets that is relevant and any offending of this nature must have some adverse effect.
I have already referred to matters relevant to s 16A(2)(a) of the Crimes Act 1914 (Cth) and I have already referred to this matter as involving what was in effect a course of conduct as relevant to s 16A(2)(c) and to damaging the market, as relevant to s 16A(2)(d) as well as remorse and contrition as relevant to s 16A(2)(f), and I have also already referred to the fact that the plea of guilty was made at the earliest opportunity relevant to s 16A(2)(g) and the concepts of utility and the facilitation of justice. I am also required to take into account pursuant to s 16A(2)(h), his cooperation and assistance as previously referred to, and to the fact that he is entitled to consideration of an Ellis type discount, and I have referred to s 16A(j), that is, the concept of deterrence and in this matter general deterrence specifically, a factor to which of course the Ellis factor is also relevant, and I have referred to matters relevant to s 16A(2)(m), being his character and antecedents.
Section 17A of the Crimes Act provides that a Court will not pass a sentence of imprisonment in respect of a Federal offender unless the Court, having considered all other available sentences, is satisfied that no other sentence is appropriate in the circumstances. I accept, as submitted by the Crown, that in view of the offending conduct continuing over a one year and seven month period, and in particular, because the offender clearly had received training and knew that what he was doing was in breach of the law, that a sentence of imprisonment must be imposed.
I intend to proceed by way of an aggregate sentence and in those circumstances I am required to provide an indicative sentence in relation to each of the offences. Relevant to each of those sentences are the discounts that are available to the offender. Having carefully considered all the material before me, I am of the view that a total discount of 50% is appropriate. There is of course, a significant overlap between the various discounts that can be provided, such as utility of the plea and the facilitation of justice, past and future assistance, and the Ellis discount. For the purposes of this, I will indicate that the 50% discount in relation to each of the indicative sentences will be composed of a discount of 25% to reflect both utility of the plea and the facilitation of justice, a 12.5% discount on the basis of the Ellis discount and his cooperation, that is past cooperation or assistance and a further 12.5% discount for his offer of assistance in relation to the prosecution of others in the future, in respect of which he has given an undertaking. On that basis a 50% discount overall is appropriate.
In respect of Count 1, the indicative sentence, after taking into account all of the matters to which I have referred, including remorse and contrition, the risk of re offending and rehabilitation, is a term of imprisonment of 12 months. In relation to Count 2, the indicative sentence is six months. In relation to Count 3, the tipping allegation, the indicative sentence is 12 months. In relation to Count 4, the indicative sentence is six months. In relation to Count 5, the indicative sentence is 10 months and in relation to Count 6, the indicative sentence is 18 months.
In my view, there must be a significant degree of concurrency to reflect the fact that this was a course of offending, and taking into account each of those indicative sentences, I have determined the appropriate sentence is one of three years' imprisonment.
Having determined that as the appropriate sentence, I have turned my mind to whether it can be dealt with by an alternative form of sentence in those circumstances, and in respect of this offender, having taken into account in determining the sentences the cases provided for consideration by the Crown of R v Glynatsis [2012] NSWSC 1551, Khoo v The Queen [2013] NSWCCA 323, Hartman v DPP NSWCCA 261, R v Holt [2016] NSWSC 4634, I am of the view that the sentence of three years can be served appropriately by way of an Intensive Correction Order.
So the order will of course be for a term of three years. In my view, the only additional condition necessary to be imposed is a Community Service Work Order. Mr Ho, would you please stand.
You are convicted in relation to each of the six offences. There being no other appropriate penalty, you are sentenced to a term of imprisonment for a period of three years commencing today and to expire on 10 September in three years' time, that is 2023. The standard conditions are to apply. You are not to commit any offence while subject to the Intensive Correction Order and you must submit to supervision by a Community Corrections officer. The Intensive Correction Order is subject to a Community Service Work Order of 250 hours. It is to be supervised by the Community Corrections office at Leichhardt. You must report to that office by midday of Friday next week.
If you fail to comply with the conditions of this order, sanctions may be imposed by the Commissioner of Corrective Services or the Commonwealth Director of Public Prosecutions. Those sanctions may include a formal warning imposing more stringent conditions, or it may include revocation of this order. If the order is revoked, you may be required to serve all or some of the period of your sentence in fulltime custody.
Finally, you are now directed to attend the court registry where a copy of the order will be explained and given to you.
HIS HONOUR: Do you understand all that, Mr Ho?
OFFENDER: Yes, your Honour.
HIS HONOUR: Alright, thank you.
Is there anything, such as the year that I'm in, that I have made a mistake in relation to it?
McHUGH: No, your Honour. A comprehensive and thoughtful judgement. The parties are indebted. May it please your Honour.
HIS HONOUR: All right, thank you. Thank you, Mr Postma as well. I'll adjourn.