R v Joffe; R v Stromer

R v Folbigg [2005] NSWCCA 23; (2005) 152 A Crim R 35 R v GAC [2007] NSWCCA 315; (2007) 178 A Crim R 408 R v Lockyer (1996) 89 A Crim R 457 R v Scholl (No 2) [2009] VSC 237; (2009) 53 MVR 8 R v Shamouil [2006] NSWCCA 112; (2006) 66 NSWLR 228 R v Teys [2001] ACTSC 29; (2001) 119 A Crim R 398 R v Zhang [2005] NSWCCA 437; (2005) 158 A Crim R 504 Re Attorney General's Reference (No 1 of 1975) [1975] QB 773 Samadi & Anor v R [2008] NSWCCA 330; (2008) 192 A Crim R 251 Shepherd v The Queen [1990] HCA 56; (1990) 170 CLR 573 Sutton v R [1984] HCA 5; (1984) 152 CLR 528 TKWJ v The Queen [2002] HCA 46; (2002) 212 CLR 124 Washer v Western Australia [2007] HCA 48; (2007) 234 CLR 492 Category: Procedural and other rulings Parties: Regina (Crown) Daniel Shayne Joffe (Accused) Nathan Stromer (Accused) Representation: Counsel: J V Agius SC/J Paingakulam (Crown) R G McHugh SC/G A Bashir (Joffe) S J Odgers SC/L Fernandez (Stromer)

Solicitors: Commonwealth DPP (Crown) Speed & Stracey Lawyers (Joffe) Johnson Winter & Slattery (Stromer) File Number(s): 2010/34654; 2010/40493

(1) Introduction

1. The Crown, on indictment, charged Daniel Shayne Joffe with 10 counts pursuant to s.1043A(1)(d) of the Corporations Act 2001 (the Act) and Nathan Stromer, with 10 counts pursuant to s.1043A(1)(c) of that Act.
2. The provisions of s.1043A form part of Subdivision B - The Prohibited Conduct - under Chapter 7, Part 7.10 (the insider trader prohibitions):- "1043A Prohibited conduct by person in possession of inside information (1) Subject to this Subdivision, if:- (a) a person (the insider) possesses inside information; and (b) the insider knows, or ought reasonably to know, that the matters specified in paragraphs (a) and (b) of the definition of inside information in section 1042A are satisfied in relation to the information; the insider must not (whether as principal or agent):- (c) apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products; or (d) procure another person to apply for, acquire, or dispose of, relevant Division 3 financial products, or enter into an agreement to apply for, acquire, or dispose of, relevant Division 3 financial products. …"
3. The elements of the offences with which Mr Joffe has been charged include:- (1) That he was an insider. (2) That he "possessed" inside information as defined in s.1042A. (3) That, contrary to s.1043A(1), he procured another person, namely, the accused Mr Stromer, to apply for, acquire or dispose of relevant Division 3 products being the products in the counts in the indictment.
4. The Crown alleges against Mr Stromer that he had possession of inside information as particularised in each of Counts 11 to 20 in the indictment and that he intentionally acquired the financial products particularised in those counts whilst in possession of such information.
5. In relation to the offence with which Mr Joffe has been charged, s.1043A(1)(d) defines the term "procure" as including, without limiting its meaning, "... incites, induces or encourages an act or omission by another person ...": s.1042F of the Act.
6. In the indictment, the Crown alleges that between about 1 June 2006 and 31 January 2007, Mr Joffe (through his employment with Moody's Investor Services Pty Ltd) ("Moody's") came into possession of inside information concerning a number of different corporate entities and that, on each occasion, he procured his friend, Mr Stromer, to acquire the relevant financial products.
7. The entities, the financial products and the counts in the indictment are as follows:- "(a) GasNET Australia Group (GasNet) - financial products acquired by Mr Stromer were GasNet shares - count 1 (Mr Joffe) and [count] 11 (Mr Stromer) (b) Auckland International Airport Ltd (AIA) - financial products acquired by Mr Stromer were AIA shares - [count 2 Mr Joffe) and] count 12 (Mr Stromer) (c) AWB Ltd (AWB) - financial products acquired by Mr Stromer were AWB CFDs - count 3 (Mr Joffe) and count 13 (Mr Stromer) (d) Bora! Ltd (BLD) - financial products acquired by Mr Stromer were BLD CFDs - count 4 (Mr Joffe) and count 14 (Mr Stromer) (e) Alinta Infrastructure Holdings (AIHCA) - financial products acquired by Mr Stromer were AIHCA CFDs - count 5 (Mr Joffe) and count 15 (Mr Stromer) (f) Sydney Roads Group Ltd (SRG) - financial products acquired by Mr Stromer were SRG CFDs and SRG warrants - counts 6-9 (Mr Joffe) and counts 16-19 (Mr Stromer) (g) Rinker Group Ltd (RIN) - financial products acquired by Mr Stromer were RIN CFDs & RIN shares - count 10 (Mr Joffe) and count 20 (Mr Stromer)."

(a) Mr Joffe's notice of motion

1. The accused, Mr Joffe, by way of notice of motion filed on 11 March 2011, seeks, inter alia, the following orders:- "1 An order pursuant to section 192A of the Evidence Act 1995 that the question of the admissibility of the Crown's Coincidence Evidence be determined in advance of the trial. 2. Further to order 1, a ruling pursuant to section 98 or 101 of the Evidence Act 1995 that the Crown's Coincidence Evidence not be admitted at the trial of each of the charges in the indictment. 3. order pursuant to section 21 of the Criminal Procedure Act 1986 that the charges in the indictment, other than charges 6 to 9, be tried separately."

(b) Stromer's notice of motion

1. A notice of motion was filed on behalf of Mr Stromer on 11 March 2011, in slightly different terms, however, the orders sought are to the same effect.

(3) Advance Ruling

1. The hearing of the motions proceeded over a number of days (20, 21, 22 June 2011,19 and 20 July 2011). "Advance rulings" on such applications may add to the overall efficiency of a criminal trial and thereby serve the ends of justice: Adam v R [2001] HCA 57; (2001) 207 CLR 96, 112; see also TKWJ v The Queen [2002] HCA 46 at [42]-[43]; (2002) 212 CLR 124 per Gaudron J at 137-138. Difficult questions concerning the admissibility of evidence may qualify in that respect. In the present proceedings, a number of issues have been raised on behalf of the applicants/accused, which, in turn, has required a detailed examination of the evidence proposed to be led in the Crown case in relation to specified "events" as set out in the Coincidence Notice. The detailed documentary analyses undertaken by counsel for the Crown and counsel for Mr Joffe and Mr Stromer, the written primary and reply submissions and the supplementary oral submissions (supplementing both the primary and reply submissions) and the five day hearing all indicate that an advance ruling approach is appropriate. Accordingly, I make an order as sought in paragraph 1 of the notices of motion.

(4) The evidence sought to be admitted under s.98

1. The Crown seeks to lead coincidence evidence on the basis that the evidence pertaining to each individual count is admissible in respect of each other count.
2. The Crown also proposes to adduce evidence of three uncharged events relating to the following entities and financial products:- (1) Publishing and Broadcasting Ltd ("PBL"). The financial products acquired by Mr Stromer in respect of PBL were Contracts for Difference ("CFDs"). (2) Downer EDI Ltd ("DOW"). The financial products acquired by Mr Stromer in respect of DOW were CFDs. (3) Australian Pipeline Trust ("APA"). The financial products acquired by Mr Stromer were APA units.
3. The object of the orders sought in the notices of motion under to s.29(3) and s.21 of the Criminal Procedure Act 1986 is to create the basis for an order severing the counts on the indictment so that there is a trial of each accused on the individual counts (other than in relation to Sydney Roads Group Ltd ("SRG")).
4. The separate trial issue is, in that way, interdependent with the coincidence evidence issue. The question of severance of the counts, in other words, turns on whether the Crown is to be permitted, in relation to each individual count, to rely upon the evidence it seeks to tender in proof of each other count and vice versa.
5. The applications seek orders for joint trials of the two accused in respect of the counts identified below:- (1) Counts 1 and 11 - GasNet Australia Group ("GasNet"). (2) Counts 2 and 12 - Auckland International Airport Ltd ("AIA"). (3) Counts 3 and 13 - AWB Ltd ("AWB"). (4) Counts 4 and 14 - Boral Ltd ("BLD"). (5) Counts 5 and 15 - Alinta Infrastructure Holdings Ltd ("AIHCA"). (6) Counts 6, 7, 8, 9, 16, 17, 18 and 19 - Sydney Roads Group Ltd ("SRG"). (7) Counts 19 and 20 - Rinker Group Ltd ("RIN").
6. The Crown served a Notice of Coincidence Evidence on 25 February 2011 pursuant to s.98 of the Evidence Act 1995 (the coincidence rule) for the purpose of establishing that each of the accused did the acts alleged against them in the indictment and that each had the required state of mind on the basis that, having regard to the similarity of the events and circumstances, it is improbable that the events occurred coincidentally.
7. The Crown, therefore, seeks the admission of evidence as referred to in the Coincidence Notice in proof of what is a circumstantial case against the two accused. That case has been described in the Supplementary Submissions on behalf of the Crown as follows (at pp. 1-2):- "There was a scheme in place whereby Joffe would obtain inside or confidential information through the opportunity afforded by his employment at Moody's. He would then pass it on to his trusted friend, Stromer, whom he had recruited to purchase shares/securities in the circumstances pleaded. Each of the counts in the indictment represents an instance of the scheme in action. The fact that 10 separate charges have been laid against each accused ought not to distract from what is the central allegation of the Crown and that is that there was a scheme in place whereby Joffe would pass the relevant information on to his recruit, Stromer, in the circumstances alleged in the charges. The Crown case is circumstantial. It is the Crown case that taken together, each pair of charges represents the scheme in action."

(5) Seven events

1. The combined course of conduct, summarised in pp.5-8 of the Coincidence Notice, was compartmentalised into seven "events" as follows:- (1) The receipt by Moody's of information from seven entities the subject of charges, being "inside information". (2) Mr Joffe's direct receipt of inside information in some instances and indirect receipt of information in others. (3) Telephone communications between Mr Joffe and Mr Stromer, by which means Mr Joffe allegedly communicated the inside information to Mr Stromer, thereby procuring Mr Stromer to trade whilst in possession of the inside information. (4) Mr Stromer's acquisition of the financial products in the seven entities whilst in possession of the inside information. (5) The announcement made to the market of an event that pre‑empted the transaction. (6) Mr Stromer's trading out of his position in the seven entities. (7) Mr Joffe's significant surveillance of the share price in the entities traded in by Mr Stromer, usually on CommSec, throughout the material time.
2. The Crown also relies, as indicated above, upon the combined course of conduct not charged but which is summarised at p.9 of the Coincidence Notice, and being constituted by a set of events which correspond with those set out in Table A of the Coincidence Notice, except that it is alleged (in Table B) that Mr Joffe was in direct or indirect receipt of "confidential", as opposed to, "inside" information and that Mr Stromer traded in "confidential", as opposed to, "inside" information.

(B) RELEVANT STATUTORY PROVISIONS

1. Part 3.6 of the Evidence Act - Tendency and Coincidence - contains the provisions of s.98 and s.101.
2. Section 98 establishes the "coincidence rule" which excludes evidence of "2 or more events occurred" being adduced to prove that a person did a particular act or had a particular state of mind on the basis that "it is improbable that the events occurred coincidentally" (relying on similarities in the events and/or the circumstances in which they occurred) unless the requirements imposed by s.98(1) are satisfied. The use of such evidence is additionally subject to s.101.
3. Section 98 is in the following terms:- "98 The Coincidence Rule (1) Evidence that 2 or more events occurred is not admissible to prove that a person did a particular act or had a particular state of mind on the basis that, having regard to any similarities in the events or the circumstances in which they occurred, or any similarities in both the events and the circumstances in which they occurred, it is improbable that the events occurred coincidentally unless: (a) the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party's intention to adduce the evidence, and (b) the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value. (2) ..."
4. Section 101 is in the following terms:- "101 Further restrictions on tendency evidence and coincidence evidence adduced by prosecution (1) This section only applies in a criminal proceeding and so applies in addition to sections 97 and 98. (2) Tendency evidence about a defendant, or coincidence evidence about a defendant, that is adduced by the prosecution cannot be used against the defendant unless the probative value of the evidence substantially outweighs any prejudicial effect it may have on the defendant. (3) This section does not apply to tendency evidence that the prosecution adduces to explain or contradict tendency evidence adduced by the defendant. (4) This section does not apply to coincidence evidence that the prosecution adduces to explain or contradict coincidence evidence adduced by the defendant."
5. As to the requirement specified in s.98(1)(a), the Crown relies upon the Coincidence Notice served on the legal representatives of Mr Joffe and Mr Stromer on 25 February 2011 as sufficient compliance with that requirement.

(1) Similarities in evidence

1. In relation to the requirements specified in s.98(1)(b), the Crown set out what it contended were the similarities in the events and circumstances recorded in Tables A and B of the Coincidence Notice. The Crown relied upon the following:- "A All information alleged to be inside information or confidential information was received by Moody's by way of Moody's clients, often referred to as Credits. B Mr Joffe was employed at Moody's as an associate analyst at all times during which the inside information or confidential information was received by Moody's. C Shortly after receipt of the inside information or confidential information by Moody's, Mr Joffe communicated with Mr Stromer. D Shortly after communication with Mr Joffe, Mr Stromer acquired the financial products in the entities about which Moody's had received inside information or confidential information. E Shortly after Mr Stromer had acquired the financial products, either an announcement was made to the market that made public the information that had previously been inside information or confidential information, or Moody's was advised that the transaction would not be going ahead. F Shortly after the public announcements or Moody's being advised that the transaction was not going ahead, Mr Stromer traded out of his position in the financial products. G During the time that Moody's was receiving the inside information or confidential information, Mr Joffe maintained significance surveillance of the share price in the entities in which Mr Stromer traded."

(2) The Crown's contentions

1. The Crown observed that Mr Stromer commenced his trading in and after June 2006 by acquiring shares in GasNet (between 8 June 2006 and 14 June 2006) and AIA (between 1 August 2006 and 8 August 2006).
2. Following those acquisitions, Mr Stromer principally acquired financial products in the form of derivatives known as CFDs. The Crown anticipated that CFD providers who give evidence in the proceedings will address the characteristics of a derivative.
3. Ms Natalie Beirne from the CFD market maker IG Australia, it is anticipated, will explain that CFDs are leveraged so that they allow the client to use a small amount of equity to secure a larger exposure of an underlying asset. Leverage can be beneficial in strengthening returns, however, it may also work against the investor, resulting in increased losses.
4. The Crown's contention was that Mr Stromer was a relatively inexperienced trader. He would not, it was argued, have entered into high risk derivatives without being apprised of the "inside" and "confidential" information about the entities in which he traded. The Crown submitted that Mr Joffe, through his employment at Moody's, had access to inside information in the case of each charged transaction. The evidence, the Crown anticipated, would establish significant telephone contact between Mr Stromer and Mr Joffe at times that were significant in relation to the relevant purchases and sales made by Mr Stromer.
5. On the "improbability of coincidence", in addition to relevant communications between the two accused, the Crown also relied on the timing of the purchases and sales of the relevant financial products by Mr Stromer.
6. The submission was that the probability that the acts of Mr Joffe (A, B, C and G in paragraph [31] above) and their circumstances and those of Mr Stromer (C, D, F and G in that paragraph) are coincidental, are reduced once it is understood that the acts were repeated time after time in similar circumstances.
7. The Crown submitted that that probability is proportionately reduced as each set of similar circumstances is taken into the mix. It is the coincidence in time and circumstance, over and over again, the Crown stated that was relied upon to prove that the conduct of each accused in relation to any one count was not merely innocent and coincidental: Outline of Submissions on behalf of the Crown at p.4.

(3) The facts in issue

1. Mr Joffe is charged under Counts 1 to 10 in the indictment with having "procured" Mr Stromer to acquire the specified financial products: s.1043A(1)(d).
2. In understanding what "acts" may be relevant to an offence charged under those counts, it is necessary to consider aspects of the offences charged. In that respect, the following matters arise:- (1) An offence under s.1043A(1)(d) involves a concept of "procurement". The word "procure" as noted includes incites, induces or encourages an act or omission by another person: s.1042F(1). (2) As used in s.1043A(d), the term "procure", accordingly, involves the act of procuring a person to do something (as distinct, for example, from simply procuring an act that constitutes an offence). (3) The acts are stated as being "... to apply for, acquire, or dispose of, relevant Division 3 financial products ..." in s.1043A(1 )(d). So read, the words connote a causal connection between alleged acts directed to procuring another person (in this case, Mr Stromer) to do or undertake the act(s) of applying for, acquiring or disposing of the specified financial products and the acts of the other person in doing so. The concept of an act(s) by one person to "procure" another to do an act has been considered in a number of cases including R v F; Ex parte Attorney-General [2004] 1 QD R 162; Deutsch v The Queen [1986] 2 SCR 2; R v Broadfoot (1976) 64 Cr App R 71, 74 and Re Attorney General's Reference (No 1 of 1975) [1975] QB 773, 779 to 780. (4) The issue of "procure another" in the present proceedings, accordingly, involves factual matters concerning communications between Mr Joffe and Mr Stromer, the content of any communications and what, if any, related acts occurred at material dates and times.
3. In the present proceedings the Crown seeks to lead evidence to establish procuring by Mr Joffe of acts by Mr Stromer within s.1043A and in relation thereto to prove the following:- (1) That whilst in the employ of Moody's in the relevant period Mr Joffe had access to relevant "inside information". (2) That by one or more means he utilised the means of access available to him to obtain and possess the inside information being:- (a) inside information within the meaning of s.1042A; (b) inside information that was provided by specified entities to Moody's; (c) having obtained the inside information, Mr Joffe conveyed the inside information to Mr Stromer for the purpose of having him perform the acts referred to in that provision; (d) Mr Joffe procured Mr Stromer to do acts that fell within s.1043A(1)(b); (e) that Mr Stromer then performed a number of acts by way of applying for, acquiring and disposing of the specified Division 3 financial products.

(4) The events relied upon by the Crown

1. The events specified in the Coincidence Notice were reproduced and set out in a spreadsheet format described as a Table. Particular factual matters concerning each of the events were set out in the document which was marked MFI 1.
2. A similar spreadsheet analysis was made in relation to PBL, DOW and APA relevant to the "uncharged events":
3. Particular factual events set out in MFI 1 led to responses by the Crown which were set out in a document, again in spreadsheet format, which became MFI 2.
4. Accordingly, Mr Joffe's response to the Coincidence Notice, the Crown's response thereto and a Reply by Mr Joffe took the following form:- (1) Table of responses by Mr Joffe to "events" set out in the Coincidence Notice (MFI 1), being Mr Joffe's responses to each of the events in the Coincidence Notice in relation to the entities identified in the indictment and Coincidence Notice. In MFI 1 there are 91 "events" consistent with the Coincidence Notice together with Mr Joffe's response to each event. (2) Responses by the Crown in comparable spreadsheet format entitled Response by the Crown to the Table relied upon by Mr Joffe (MFI 2). (3) Reply by Mr Joffe to the Crown's response to the Table - being a point by point response on behalf of Mr Joffe in the nature of a rejoinder to the Crown's responses in MFI 2 as follows:- (a) GasNet - specific responses to (i) Event 1; (ii) Event 14; (iii) Event 27; (iv) Event 40; (v) Event 66; (vi) Event 79 (b) AIA - specific responses to (i) Event 2; (ii) Event 28; (iii) Event 41; (iv) Event 54; (v) Event 80 (c) AWB - specific responses to (i) Event 3; (ii) Event 29; (iii) Event 42; (iv) Event 55; (v) Event 68; (vi) Event 81 (d) BLD - specific responses to (i) Event 4; (ii) Event 17; (iii) Event 30; (iv) Event 43; (v) Event 56; (vi) Event 69; (vii) Event 82 (e) AIHCA - specific responses to (i) Event 18; (ii) Event 31; (iii) Event 44 (f) SRG (charge 6) - specific responses to (i) Event 6; (ii) Event 19; (iii) Event 32; (iv) Event 84 (g) SRG (charge 7) - specific responses to (i) Event 21; (ii) Event 47 (h) SRG (charge 8) - specific responses to (i) Event 21; (ii) Event 34; (iii) Event 47; (iv) Event 86 (i) SRG (charge 9) - specific responses to (i) Event 9; (ii) Event 22; (iii) Event 35; (iv) Event 48; (v) Event 87 (j) RIN - specific responses to (i) Event 10; (ii) Event 23; (iii) Event 36; (iv) Event 62 (k) PBL - specific responses to (i) Event 11; (ii) Event 24; (iii) Event 37; (iv) Event 50; (v) Event 76 (I) DOW - specific responses to (i) Event 12; (ii) Event 38; (iii) Event 51; (iv) Event 64; (v) Event 77; (vi) Event 90 (m) APA - specific responses to (i) Event 13; (ii) Event 26; (iii) Event 39; (iv) Event 52; (v) Event 78; (vi) Event 91

(1) The issue of alternative or inconsistent inferences

1. It has been argued on behalf of each accused (although with somewhat different emphasis having regard to the particular nature of the charges presented against each of them), that, in determining the admissibility of evidence sought to be adduced by the Crown under s.98, I am required to consider and evaluate the extent to which "alternative interpretations" of the evidence may be open. In that respect, it has been argued on behalf of Mr Joffe and Mr Stromer that a determination of significant probative value for the purposes of s.98 "... necessarily requires an evaluation of inferences, at least where the evidence raises the possibility of alternative inferences". Mr S Odgers SC, who appeared on behalf of Mr Stromer submitted that the assessment under s.98, in particular in relation to significant probative value is directed to determining whether it could be rationally concluded that the probability of the inference that the Crown seeks to draw is significantly greater than the probability of an inference inconsistent with that inference.
2. In the submissions for Mr Joffe, it was argued by Mr McHugh that, in discharging the requisite evaluative and predictive function under s.98, it was not only permissible, but it was necessary for the Court, inter alia, to have regard to the availability and strength of inferences founded in the evidence other than the inferences for which the Crown contends.
3. It was not suggested in the submissions for the accused that there was any case law authority that determined that such an approach was either appropriate or open to be taken when assessing significant probative value under s.98. A number of authorities in relation to common law principles pertaining to similar fact evidence and s.98 were referred to but none have been suggested as standing as authority for the submissions referred to in paragraph [68] and [69].

(2) Submissions for Mr Joffe

1. Detailed written submissions were made on behalf of Mr Joffe. These were supplemented by oral submissions. The written submissions were:- (1) Defence Written Submissions on separate trial application dated 13 May 2011. (2) Mr Joffe's Submissions in Reply dated 18 July 2011

(a) The circular reasoning submission

1. Mr McHugh, on behalf of Mr Joffe, in the course of his oral submissions, as indicated, above undertook an analysis of specific matters relating to certain of the "events" set out in MFI 1.
2. He contended that, insofar as the Crown seeks to prove that Mr Joffe possessed inside information by reference to factual matters concerning other events referred to in the Coincidence Notice, there is a problem with the Coincidence Notice "because it becomes circular" (t.19).
3. Mr McHugh in this regard referred to the High Court's decision in Perry v The Queen [1982] HCA 75; (1982) 150 CLR 580. It is necessary in order to deal with the submission to refer here to the facts of that case.
4. Mrs Perry was tried on indictment on two charges of attempting to murder Mr Perry, who was her third husband. The Crown case was that in two separate periods, the first in 1978, the second in 1979 she administered poison to her husband with intent to kill him. She was convicted on the two counts and sought special leave to appeal to the High Court which was granted upon one ground only, namely, that the trial judge wrongly admitted evidence which the Crown contended showed that three other persons with whom the applicant had had a close relationship had died of poisoning.
5. The issue in the case turned on the admission of evidence that the accused's second husband and her brother (M) had died of arsenic poisoning in 1961 and 1962 respectively and that her de facto husband (D) had died of an overdose of barbiturates in 1970. The accused benefited financially from the deaths of her second husband and de facto husband and would have benefited financially from the death of her third husband if he had died.
6. However, it had not been established that D had, in fact, ingested any poison. It was necessary for the Crown to rely on the other instances of poisoning, including those the subject of the particular charges in question, in an attempt to provide an inference that D had in fact suffered from arsenic poisoning. In other words, as Gibbs CJ observed (at 589), it was necessary to assume the guilt of the accused of the offences of which she was charged in order to render admissible the evidence regarding the cause of death of D. Such a line of reasoning was obviously objectionable.
7. Accordingly, the critical aspect which gave rise to the issue of circular reasoning - the need to assume the guilt of the accused on the subject charges - was the absence of evidence on the critical fact - namely the absence of direct evidence that D had died from arsenic poisoning at all. In fact, it was clear that he died from an overdose of sleeping tablets. Without evidence of death by arsenic poisoning, the evidence could only possess a speculative character.

(b) The issue of "alternative inferences"

1. It was submitted for Mr Joffe that s.98 and s.101 do not prevent the Court from assessing the probability of inferences other than those relied on by the party who seeks to adduce the evidence.
2. It was contended that it is logically impossible to assess the relative probability or improbability that a set of similar events occurred coincidentally without considering the likelihood of "alternative available inferences". That is a matter, it was submitted, that can only be rationally assessed in light of all the circumstances in which the events occurred: Mr Joffe's Submissions in Reply at [58]. This, it was said, constitutes the predictive and evaluative exercise to which reference was made in R v Zhang [2005] NSWCCA 437; (2005) 158 A Crim R 504 at [139].
3. The approach to be taken by the Court in the application of s.98, Mr McHugh submitted, involved six matters as set out in a document dated 22 June 2011 in the following terms:- "… The Court's task: 1. For each accused, for each count, for each particular act or state of mind which the Crown seeks to establish, what are the specific events which the Crown asserts are 'similar' (s.98(1))? 2. Is the Court satisfied that those events are 'substantially and relevantly similar (Zhang)? 3. As to proof of the Crown's asserted similar events:- a. if the proof of the asserted event is testimonial, the Court is bound to assume that the jury will accept that evidence, without considering credibility or reliability (Shamouil); b. but if the asserted event depends on an inference, the Court must form its own view of the probabilities and the process of reasoning must not be circular (Perry, Sutton). Compare the factual circumstances in cases such as e.g., Perry (as to the deaths other than Duncan's), Folbigg and Zhang, where there was little or no doubt on the evidence as to the existence of the events asserted to be similar. 4. Taking an evaluative and predictive approach in light of all the anticipated evidence, is it improbable that the [similar] events occurred coincidentally' (s.98(1))? 5. Taking an evaluative and predictive approach in light of all the anticipated evidence, has the Crown satisfied the Court that (in accordance with the no-coincidence process of reasoning) the evidence of the alleged similar events has 'significant probative value' (s.98(1)(b))? 6. If so, has the Crown satisfied the Court that the probative value of the evidence of the similar events substantially outweighs any prejudicial effect it may have on the accused (s.101)?"

(3) Submissions on behalf of Mr Stromer

1. Mr S Odgers SC, who appeared with Mr L Fernandez of counsel on behalf of Mr Stromer, relied on written submissions lodged on 11 May 2011 and submissions in reply dated 17 June 2011. The submissions were supplemented by oral submissions made in the course of the hearing.
2. In the written submissions it was observed that, as against Mr Stromer, it had been submitted on behalf of the Crown that the evidence was tendered to prove that:- (1) He "did the particular acts alleged in each of Counts 11-20 in the indictment, namely, that he acquired the relevant Division 3 financial products identified in each count in the indictment". (2) He "had a particular state of mind, namely, that at the time he acquired the relevant Division 3 financial products identified in each of Counts 11-20 in the indictment, he acted intentionally and was in possession of the inside information as particularised in each of Counts 11-20 in the indictment".
3. The question was whether the evidence could rationally be regarded as having a significant effect on the probabilities relating to the existence of a fact in issue in the trial (Written Submissions, p.3).
4. Mr Odgers noted that the acquisition of the relevant Division 3 financial products identified in each count of the indictment is not in issue at all in respect of any of the counts, except Count 11 (written submissions at [6]). It was indicated that an appropriate formal admission would be made in due course.
5. Mr Odgers focussed his submissions under two headings.
6. The first related to the proposition that, if evidence sought to be admitted under s.98 was susceptible to inferences that were inconsistent with each other, it could not and did not meet the test of "relevance" under the Evidence Act.
7. Second, if the evidence in question was open to alternative inferences (one or more being consistent with innocence) the evidence could not satisfy the requirement of significant probative value.

(a) "Relevance" and "inconsistent inference"

1. In the Defence Further Written Submissions on the proper approach to Coincidence Evidence, it was noted that coincidence evidence, as is the case with all circumstantial evidence, must be evidence that satisfies the provisions of s.55 in order for it to be admissible: s.56(2).
2. Mr Odgers acknowledged that if an inference that the Crown seeks to draw with respect to a fact in issue is one that is reasonably open, the mere existence of other possible inferences will not mean that the evidence ceases to be relevant. However, the submission was that the existence of other possible inferences that are inconsistent with the fact in issue may, in certain limited circumstances, lead to a conclusion that the evidence is not "relevant" (at [5]).
3. It was contended that if the coincidence evidence on which the Crown relies in the proceedings could rationally only be regarded as "equally consistent with two possible inferences, one that the accused was in possession of inside information" (as contended for by the Crown), the other that he was only the recipient of a tip (an alternative inference said to be open on the evidence), then the evidence is not relevant to the fact in issue of whether the accused was in possession of inside information (written submissions at [13]).
4. The submissions acknowledged at [14] that this specific issue in relation to s.55 of the Evidence Act has not previously been addressed by courts in this State. However, reliance was placed upon the proposition that the definition of "relevant evidence" reflects the common law. Reference was made in this respect to the observations in footnote 4 in Washer v Western Australia [2007] HCA 48; (2007) 234 CLR 492 (Gleeson CJ, Heydon and Crennan JJ).
5. The argument was developed by reference to the High Court's decision in Edwards v The Queen [1993] HCA 63; (1993) 178 CLR 193, in particular, to observations concerning the proper approach to be taken with respect to an inference of consciousness of guilt where the Crown wished to invite the jury to infer guilt from a lie told by the appellant in that case.
6. Relevant principles concerning s.98 enunciated by Simpson J in Zhang (supra) and dicta of Latham J in R v Ceissman [2010] NSWCCA 50 at [8]‑[9] were also noted and the observations of Spigelman CJ in R v Shamouil [2006] NSWCCA 112; (2006) 66 NSWLR 228 at [61] extracted. A little later, the submission was:- "26 However, Spigelman CJ said nothing in Shamouil about the proper approach to the drawing of inferences in general, or coincidence evidence in particular."

(b) Alternative inferences

1. Whilst it was accepted that Mr Stromer "acted intentionally" insofar as he intended to acquire the financial products in question, there were a number of matters raised on the question of whether Mr Stromer was in possession of the inside information as particularised. It was submitted that the evidence sought to be relied upon by the Crown was not capable of proving that he did possess such information.
2. Additionally, on behalf of Mr Stromer, Mr Odgers submitted that it was important to take into account that it was not a fact in issue as regards Mr Stromer that Mr Joffe gave him a "tip" to buy the particular financial products (at [9]):- "... It would not be an offence under s.1043A(1) for the accused to have received a 'tip' that a particular financial product should be acquired, even if the person who provided the 'tip' did so on the basis of inside information."
3. The fact in issue, accordingly, was said to be whether Mr Joffe communicated the particularised (allegedly) "inside" information to Mr Stromer, and not that Mr Joffe gave him a "tip to buy particular financial products" (at [9]).
4. Mr Odgers argued that the evidence would not satisfy the test of relevance if it was equally consistent with two possibilities, as discussed above, namely, the possibilities that insider information was received or that Mr Stromer merely received a "tip". In that event, Mr Odgers contended it would follow that the evidence would not have significant probative value.
5. It was also submitted that there was no "substantial evidence" available to the Crown that would provide a clear and persuasive basis for a jury to infer that, at the time Mr Stromer acquired the particular financial products in question, he was in possession of the particularised inside information rather than simply being the recipient of a "tip" (at [11]).
6. The contention was that the available evidence pointed to the contrary.
7. The term "tip" was said to refer to a suggestion that a particular trade is likely to result in a profit. The coincidence evidence, it was submitted, did not possess significant probative value to prove the further alleged fact: Reply Submissions at [2].
8. The issue of "significant probative value" with respect to the particular fact in issue (that the accused Mr Stromer received inside information from Mr Joffe) should be resolved against the Crown where (Reply Submissions at [2]):- (1) The evidence is equally consistent with two possible explanations -in Mr Stromer's case, one that establishes the fact in issue (that he received inside information from Mr Joffe), the other inconsistent with guilt (he received only "tips" from Mr Joffe). (2) It would be a matter of speculation to choose between the two possible explanations. (3) There is no clear and persuasive basis available from the evidence on which the tribunal of fact could be satisfied beyond reasonable doubt of the first explanation rather than the second.

(1) Similar fact evidence principles

1. In the discussion below, references are made to a number of authorities on particular aspects of the common law concept of "similar fact evidence" as variously applied in the case law. Those references are instructive to the extent that they assist in elucidating the application of the provisions of s.98 and s.101. It is, however, the language of the statute (the Evidence Act) which determines the admissibility of the evidence in question: Papakosmas v The Queen [1999] HCA 37; (1999) 196 CLR 297; R v Ellis [2003] NSWCCA 319; (2003) 58 NSWLR 700. The present applications are to be determined on that basis.
2. For coincidence evidence to be admitted, it must be both relevant evidence and adduced for a coincidence reasoning purpose.
3. Evidence admitted under s.98 is intended to be adduced for the purpose of establishing that, because of the improbability of two or more events occurring coincidentally, a person did a particular act and/or he or she had a particular state of mind at the time.
4. In Perry (supra), the High Court determined that in order to render admissible similar fact evidence, a species of propensity evidence, it could not be assumed that the accused had committed the crime charged (at 589, 594-595, 607, 612). That, of course, is a fundamental proposition to be borne in mind and applied throughout the consideration of the present applications. The facts of Perry (supra) and the principle to be derived from the case are discussed in paragraphs [75] to [78].
5. Similar fact evidence, a form of circumstantial evidence, was subject to a special rule of exclusion in criminal cases. Its admission was exceptional: Sutton (supra) at 533 per Gibbs CJ. Gibbs CJ referred to the decision of Lord Wilberforce in R v Boardman [1975] AC 456 where, at [22], it was stated:- "The basic principle must be that the admission of similar fact evidence (of the kind now in question) is exceptional and requires a strong degree of probative force".
6. In accordance with common law principles, similar fact evidence could only be admitted if it was relevant in some other way than that of showing that the accused had a propensity or disposition to commit crime, or crime of a particular kind, or that he or she was the sort of person likely to commit the crime charged: Sutton (supra) at 533. Further, in Perry (supra), Wilson J stated at 604:- "... To be admissible, the evidence must have a sufficiently high degree of probative force to outweigh the inevitable prejudice flowing from the nature of the evidence. It is a question of degree in each case, since probative value will vary with the nature of the similar fact evidence itself, the issues, and the other evidence in the case ..."

(2) The evaluation of the probative force of similar fact evidence

1. A question as to the admissibility of evidence, not unlike the position with a "no prima facie case" submission, does not permit a court deciding the issue to make findings on the accuracy or the weight of disputed parts of the evidence especially where the Crown case is wholly or mainly a circumstantial evidence one. In determining whether charges are founded on the same facts or form part of a series of offences of the same or a similar character, it has been held that "It is immaterial that those facts are disputed by the defence": Sutton (supra) per Brennan J at 541.
2. In assessing probative value under the Evidence Act, the approach to be taken is one based upon an assumption that the evidence in the Crown case will be accepted.
3. As discussed in greater detail in the Appendix to this judgment, submissions were made to the effect that the probative value of the evidence on a number of aspects was either low or non-existent or diminished or were amenable to alternative explanations or inferences. Particular matters relied upon included:- (1) Evidence in the Crown case in relation to some events was open to "plausible" explanations or inferences as against the inferences contended for by the Crown. (2) That there was information about a particular entity in the public domain in relation to a particular count. This included speculation in the media that the entity was a possible or likely takeover target. Such information could provide the basis for some of the trading by Mr Stromer. (3) That some "events" did not fit the "pattern" alleged by the Crown, eg, the GasNet charge, the absence in some instances of stock-checking by Mr Joffe prior to particular trading by Mr Stromer. (4) Although particular information was, according to expert evidence in the Crown case, "material" information, in some cases it was contended that the information was "not very good" information and could not be considered as likely to operate as an incentive. (5) The strength of many inferences as contended for by the Crown, it was argued, was not high. (6) Phone and text message contacts were in the main initiated by Mr Stromer and not by Mr Joffe. (7) There was no evidence of the content of such contacts or communications.
4. A number of submissions for Mr Joffe did not deal with the subject of "alternative inferences" by considering particular evidence referred to in the context of the whole of the evidence in relation to a particular count or the evidence in relation to other counts or both. Rather, the approach was to refer to parts of the evidence in the Crown case relating to particular "events" referred to in MFI 1 as individual segments of evidence. As discussed below, such an approach does not sit comfortably with principles that apply to the assessment of probative value of evidence particularly in circumstantial evidence cases.

(3) Application of s.98 in these proceedings

1. As discussed above, the Crown seeks to adduce evidence in relation to each of the counts on the basis, inter alia, that the alleged offences represent a pattern of conduct. In that sense, the contention was, in effect, that there is an underlying unity between the offences charged. It was also argued that the alleged offences arose out of a "scheme in action" between the two accused and that the facts associated with each count have a striking similarity about them: Outline of submissions on behalf of the Commonwealth DPP in Response to submissions on a separate trial application, p.7 and Supplementary Submissions for Director of Public Prosecutions, at pp.1-2.
2. The level or degree of cogency of the evidence sought to be admitted under s.98 in these proceedings was said by the Crown to be established by a number of matters. These include:- (1) The relationship between Mr Joffe and Moody's. His employment throughout the relevant period by Moody's was as an associate analyst in Moody's Corporate Finance Group (CFG) and Project and Infrastructure Finance Group (PIFG). (2) The long-term relationship between Mr Joffe and Mr Stromer in the nature of a friendship shared by them. (3) The receipt by Moody's of information that constituted "inside information" at specified times from entities that were "credits" of Moody's. (4) The fact that in some cases such information was directly disclosed to Mr Joffe. (5) The opportunity in other cases, it was claimed, that existed for Mr Joffe to access such information, that is, to indirectly obtain inside information. (6) The provision of other confidential information to Moody's by "credits" in relation to proposed corporate activity. (7) The actions of Mr Joffe in making internet searches, usually on the CommSec website, for market information concerning the securities of specific entities that were "credits" of Moody's and the timing of those searches. (8) Contemporaneous telephone contact between Mr Joffe and Mr Stromer. (9) The number, nature and circumstances of the trading activities of Mr Stromer in the relevant period. In this respect, the facts relied upon included the acquisition of financial products in the relevant corporate entities after contacts were made by Mr Stromer with Mr Joffe. The Crown contended this usually occurred shortly before a public announcement of the proposed activity. (10) The timing in relation to the acquisition of financial products by Mr Stromer and announcements made to the market in relation to information that had previously been inside or confidential information. Alternatively, the timing of specific trading where Moody's had advised that a transaction would not be proceeding. (11) That during the period June 2006 to February 2007, the fact that the only financial products Mr Stromer traded in were in relation to entities that had provided Moody's with confidential/inside information. (12) The evidence establishing that Mr Stromer traded in those entities a short time after the information had been received by Moody's. (13) The evidence as to financial dealings between Mr Joffe and Mr Stromer.

(4) Section 101: probative force and prejudicial effect

1. Section 101(2) requires a balancing exercise that can only be conducted on the facts of each case: Ellis (supra) at [95] per Spigelman CJ. Consideration is to be given to the actual prejudice in the specific case which the probative value of the evidence must substantially outweigh: Ellis (supra) at [94].
2. In HML v The Queen [2008] HCA 16; (2008) 235 CLR 334, Gleeson CJ stated at [12] that prejudice in terms of evaluating similar fact evidence meant the danger of improper use of the evidence - not its legitimate tendency to inculpate.
3. Some forms of prejudice are amenable to management as, for example, by giving suitable directions and warnings to juries: HML (supra) at [28].
4. On the other hand, if the trial judge concludes the risk of prejudice is such as to put it beyond reasonably effective management, then the evidence should be excluded.
5. In the present case, the issue is whether the coincidence evidence will have a prejudicial effect that is disproportionate to the probative force of the evidence.
6. Prejudicial effect is a reference to the undue impact adverse to an accused, that the evidence may have in the mind of the jury over and above the impact it might be expected to have if consideration were confined to its probative force: Pfennig v The Queen [1995] HCA 7; (1995) 182 CLR 461 at 488.
7. The reasons as to why propensity evidence has been treated as evidence that has or is likely to have a prejudicial effect were identified in Pfennig (supra) at 488. Hence the need for the evidence to have a high level of cogency.
8. In the submissions for Mr Joffe, reference was made to the authorities that recognise the most serious risk of prejudice in cases involving coincidence evidence, namely, the risk that the jury will give too much weight to the evidence without regard to the strengths and weaknesses of the balance of the Crown case. The danger, it was said, was that the jury could be overborne by the coincidence evidence, and ignore features of the evidence which point to the accused's innocence, or gaps in the evidence of guilt. Dicta of Murphy J in Perry (supra) at 593 to 594 was set out in the written submissions at [112].
9. It was further submitted for Mr Joffe that "the tenuous nature" of the Crown case, the complicated nature of the evidence that was referred to in the submissions and the lack of probative value of the coincidence evidence makes the issue as to prejudice more relevant in these proceedings. The proposal to have all 20 counts heard together in one trial, it was submitted, meant that the focus of the trial would require the accused to convince the jury that the "smear" of the coincidence evidence should be ignored, and will detract attention from the key elements of each charge.

(5) Conclusions as to the charged matters

1. I am satisfied and determine that the evidence identified and particularised in Table A in the Coincidence Notice is evidence that is capable of rationally affecting the probability of the existence of the following facts in issue:- (1) Possession of Mr Joffe of inside information. (2) That that information was communicated by him to Mr Stromer. (3) That he procured Mr Stromer to acquire Division 3 financial products. (4) That Mr Stromer, whilst in possession of inside information, acquired Division 3 financial products.
2. For the purpose of determining admissibility, I am satisfied and determine, in light of the evidence which the Crown proposes to adduce that, in accordance with the test to be applied, the jury would be likely to assign that evidence significant probative value within the meaning of s.98(1)(b).
3. The probative value of the evidence referred to in [228], I assess as being high based upon the following matters:- (1) The similar events identified and particularised in the Coincidence Notice. (2) The sequence and timing of the specified events before and following the acquisitions the subject of the counts in the indictment. (3) The number of events and the attenuated similarity of such events. A pattern of events may still exist on the basis of similarities even though a variation in the pattern may occur in some aspects (as in the case of GasNet). (4) The capacity of the evidence in relation to such events to rationally affect the probability of the existence of facts in issue including, in particular, the issue of "possession" and procurement within s.1043A(1)(d). (5) The capacity of the evidence in question to establish a relevant interrelationship between the issues of possession of inside information, communications between Mr Joffe and Mr Stromer, the transfer of such information from one to the other, the issue of procurement by Mr Joffe and arrangements for the acquisition of the relevant financial products and the acquisitions themselves. (6) The evidence establishing that, in relation to all acquisitions in entities referred to in the counts in the indictment, Moody's had previously been entrusted with inside information by and in relation to all such entities.

(6) Consideration: s.101(2)

1. Clearly, the balancing exercise under s.101(2) can only be conducted on the facts of each case: Ellis (supra) at [95]. As there observed, this requires consideration of the actual prejudice in the specific case which the probative value of the evidence must substantially outweigh. The issue of prejudicial effect goes to the question of the fairness of the trial, being any prejudicial effect the evidence "may" have on both the accused (or either of them).
2. In determining the issue, it is necessary to have regard to the evidence in question, the issue or issues to which it is directed and the nature of the evidence. These and other matters need to be considered in determining the degree and the level of any unfairness to the accused.
3. I do not underestimate either the challenge in conducting a joint trial of all counts nor that in framing appropriate directions and the provision of necessary warnings so as to ensure that the jury's consideration is appropriately confined to the issues and the probative force of the evidence upon such issues.
4. Although the framing of appropriate and effective directions and warnings will demand considerable attention, it is not, in my opinion, one that is beyond the capability of a trial judge. Clearly, it will require assiduous attention to both the facts and issues and the evidence bearing upon them. Counsel for the Crown and the accused should, of course, be provided with an adequate opportunity to contribute to the content and the form in which directions are to be provided.
5. The submissions made on behalf of Mr Joffe and Mr Stromer have raised a number of important matters in relation to s.101(2) that have required close consideration.
6. The number and nature of the counts and the issues and evidence associated with each count are, in particular, to be borne in mind. The necessity for the probative value of the evidence in question to substantially outweigh any prejudicial effect it may have on either or both accused is a demanding requirement - the evidence must clearly substantially outweigh any prejudicial effect the evidence may have.
7. The detailed submissions and analyses of factual material in relation to the present applications have provided an opportunity to gain an understanding of the nature and complexities involved in the issues that are likely to arise at trial and the evidence intended to be adduced by the Crown. As a result, the following observations may be made:- (1) The facts relating to that the individual counts each fall within a limited timeframe. (2) The respective counts against Mr Joffe and Mr Stromer each involve the allegation of the possession and use of inside information which the Crown claims was at the material times received by the one entity, Moody's. The counts against Mr Joffe also allege acts by him to procure Mr Stromer to acquire relevant financial products. (3) The Crown case in relation to each count does not involve voluminous transaction documentation as often occurs in a case which is primarily documentary in nature. There will, however, nonetheless be a considerable amount of other documentation. (4) As to the issue of the jury's ability to distinguish the evidence in relation to one charge from evidence of other charges:- (a) The counts in the indictment concerning both accused relate to trading in securities of a particular entity. (b) The discrete facts (meetings, discussions, website visits, purchases, sales of financial products and other "events" or "acts") are capable of identification and segmentation. (c) Copies of documentation in evidence that is peculiar to a transaction can be presented in a way or by a particular method that enables the jury to link the documentation to a transaction and the "events" concerning it. (d) Statements of agreed facts in relation to particular issues may be of assistance and may also serve to reduce any risk of confusion between transactions.

(7) Whether the Coincidence Notice complies with notice requirements

1. In the submissions for Mr Joffe, a separate issue was raised concerning the adequacy of the Crown's Coincidence Notice.
2. The Coincidence Notice in its original form incorporated the table, Table 1 entitled "Table of related events the subject of the counts in the Indictment". The original Coincidence Notice was dated 25 February 2011. It was amended in the form of the Coincidence Notice dated 8 July 2011.
3. Each "event" in relation to each transaction is sub-titled as discussed below. Several entries under each purport to provide in relation to certain events a reference to particular evidence as well as the substance or effect of the coincidence relied upon. During the course of the hearing, the Amended Statement of Facts was produced by the Crown (Exhibit A) which contains a further and detailed description of factual matters relied upon by the Crown in its evidentiary case with references to the primary sources for many such matters.
4. In oral submissions, Mr McHugh for Mr Joffe referred to entries on the Table to the Coincidence Notice as containing facts but that such facts are in some instances facts in issue. There was, in this respect, said to be a problem of circularity (transcript, 20 June 2011, p.8).
5. In the Reply Submissions for Mr Joffe, it was contended that the evidence should not be admitted by reason of its failure to comply with notice requirements (at [36]-[42]). It was argued that a properly drawn Coincidence Notice should identify for each fact in issue (and for each accused and each count) the "events" or "circumstances' by reason of which the Crown contends "that it is improbable that the events occurred coincidentally". Otherwise, it was submitted it is impossible for the Court to carry out the "evaluative and predictive" task which s.98 and s.101 require.
6. Reference was made to dicta of the High Court in Phillips (supra) and Hoch (supra) in relation to the need to identify the issues at trial on which similar fact evidence is to be tendered that being central to determining relevance and to the assessment of probative force upon which the admissibility of similar fact evidence depends. It was submitted the Crown had failed to identify this in relation to each charge and each accused.
7. Regulation 5(3) of the Evidence Regulation 2005 contains provisions as to what a Coincidence Notice given under s.98(1)(a) must state. This includes, inter alia, a requirement for the substance of the occurrence of two or more events that the party giving the notice intends to adduce and particulars of the date, time, place and circumstances at or in which each of the events occurred.

(8) Conclusions as to the uncharged matters

1. The evidence proposed to be relied upon by the Crown in relation to PBL, DOW and APA are referred to in the Appendix together with the contentions of the parties.
2. I have considered the evidence in light of all written and oral submissions. I set out below the conclusions I have reached in relation to the three uncharged matters.

(a) PBL

1. The material dates and events may be summarised as follows:- (1) Wednesday 11 October 2000 meeting between Moody's representatives and Ms Bernadette Sarroff of PBL regarding a publicly announced joint venture involving PBL. (2) Thursday 12 October 2000 telephone communications between Mr Stromer and Mr Joffe (four occasions). At 11.32, Mr Stromer transferred $30,000 from his ANZ access account to CMC Markets. (3) Friday 13 October 2006 emails circulating at Moody's concerning the proposed PBL meeting. At 10.07 am, Mr Joffe made "numerous" CommSec searches on PBL. (4) Saturday/Sunday 14/15 October 2006 telephone calls between Mr Joffe and Mr Stromer. (5) Monday 16 October 2006, after media speculation the previous week, PBL announced it was declining to comment on speculation it was selling off its assets. At 10.08 am, Mr Joffe made a CommSec search for PBL. Between 12.13 am and 12.16 am (that is, three hours after the announcement), Mr Stromer acquired 12,125 PBL CFDs from CMC Markets. At 12.20 pm, Mr Stromer sent a text message to Mr Joffe and they spoke by phone twice subsequently. (6) Tuesday 17 October 2006 at PBL offices, Moody's representatives were informed of the proposed sale of 50% of PBL's equity in its media interests. (7) Wednesday 18 October 2006, PBL issued a public announcement advising it was recapitalising certain of its media assets. (8) 20 October 2006, Mr Stromer closed out his PBL CFD position at 2.32 pm.
2. The following matters are to be noted:- (1) On 11 October 2006, at the meeting at the offices of PBL, there was no discussion of a concrete or detailed proposal. The discussion concerned an unspecified joint venture proposal involving PBL. There was no discussion of any proposed sale of any portion of PBL's equity in its media interests. (2) There had been media speculation about PBL over the previous week commencing on 9 October 2006. Without more information than that referred to in (1) above, in the context of the particular media speculation that was occurring, it is difficult to evaluate whether and what information could have passed from Mr Joffe to Mr Stromer. This is especially so given that the Crown in MFI 2 acknowledged that there was market speculation about PBL planning some activity which was likely to affect its share price. The internet traffic in those circumstances must be seen in that context. The same comment applies to CommSec searching.

(b) DOW

1. The material matters may be summarised as follows:- (1) On 4 October 2006, Mr Smith of B&B advised Mr Chong the Rail Reliance Consortium ("RRC") had been invited to revise its bid to supply new rolling stock. (2) On 5 October 2006, Mr Chong forwarded Mr Smith's email to Mr Joffe. (3) On 6, 9, 10 and 13 October 2006, Mr Chong and Mr Joffe received information about the RRC bid. (4) On 25 October 2006, Mr Joffe accessed CommSec websites relating to DOW on seven occasions. (5) On 25 October 2006, Mr Joffe and Mr Stromer made telephone contact with each other. Between 3.41 pm and 3.43 pm, Mr Stromer acquired 5,000 DOW CFDs and between 3.44 pm and 3.56 pm, he acquired a further 29,000 CFDs. (6) On 26 October 2006, Mr Stromer disposed of his DOW CFDs. (7) On 7 November 2006, RRC was awarded the tender by the NSW Government.
2. The Crown, in particular, relied upon telephone calls and text messages as follows:- (1) 12.05 pm - Mr Joffe rang Mr Stromer (4.30 minutes). (2) 1.13 pm - Mr Stromer rang Mr Joffe (1.30 minutes). (3) 2.45 pm - Mr Stromer sent a text message to Mr Joffe. (4) 3.37 pm - Mr Stromer sent a text message to Mr Joffe.
3. The proximity in time between these communications and Mr Stromer's trading was emphasised and must be taken into account in assessing the probative value of the evidence.
4. It is to be noted that the initial "information" was provided to Mr Joffe on 5 October 2006 but there was no trading by Mr Stromer until 25 October 2006.
5. There are a number of matters which, in my assessment reduce the probative value of this matter for the purposes of s.98(1)(b). (1) The information provided on 4 October 2006, that RRC were invited to revise the tender, is not, in itself, information suggesting that it was likely that RRC's bid would be successful. Tendering for public - private infrastructure/facilities is a complex process and the outcome of competitive tendering is uncertain. (2) There is no evidence of the further information received after 4 October 2006 being of a quality that would convey particularly useful information as to the tender outcome. (3) The Australian Financial Review published an article on 9 October 2006. The article recorded a likely delay in the $3 million railcar bid and referred to the fact that "fine-tuning" of bids was occurring and the Government was seeking "final clarification from the bidders". There is a suggestion in the material that each of the bidders had been asked to revise their bids. (4) The period of 20 days between the "information" supplied on 5 October 2006 and the acquisitions in question is a delay period which assumes significance when considered along with other contemporaneous events. (5) An article in the Australian Financial Review on 23 October 2006 (two days before Mr Stromer's trades) stated "Downer EDI has staked its claim as the logical choice for the $4 billion public-private partnership (PPP) to build and maintain railcars for Sydney's commuter network". The article went on to refer to DOW and United Group as "jockeying for position as lead players" for the contract. (6) The trading pattern for 25 October 2006 in DOW CFDs does not enhance the probative value of the evidence relied upon by the Crown (the Appendix refers to details on this aspect).

(c) APA

1. In the case of APA, there are a number of discrete facts that make it difficult to accept that the relevant acquisitions of the 23,750 APA units on 21 November 2006 was part of the pattern the Crown relies upon.
2. First, Mr Stromer acquired APA units not CFDs on 21 November 2006.
3. Second, the evidence provides strong support for the proposition that he, like others, was influenced by the announcement made by APA on 16 November 2006 involving what appears to have been an attractive offer as reflected by the very significant increase in trades generally in APA made on 21 November 2006, the day Mr Stromer traded. The offer was only open to 5.00 pm on 24 November 2006.
4. Third, the period of time that elapsed in this instance between the date Moody's received the information and Mr Stromer's trading is a relevant factor in conjunction with the above matters in determining whether the evidence establishes that the "information" was a relevant aspect to the acquisitions in question.
5. Fourthly, I accept the submission that there was no relevant announcement identified in the evidence that explains the sale of units on 29 November 2006.
6. The Crown, in oral submissions, submitted that, even if the evidence in relation to the acquisitions of the APA units was not relevant on the question of coincidence evidence, the evidence relating to the APA matter was relevant to the AIHCA matter and SRG matter.
7. I have concluded that the probative value of the evidence in relation to APA does not exhibit the similarities to the same extent and level as the evidence in question in relation to the charged matters.
8. Additionally, the matters referred to above provide additional bases for the above conclusion, namely, that the probative value of the evidence the Crown seeks to rely upon under s.98 cannot be considered to be high and does not, in my assessment, exceed its prejudicial effect. Accordingly, I do not consider that evidence concerning the APA matter is admissible under s.98.
9. Whether the evidence has relevance and is admissible on any other basis by reason of a link or connection with the AIHCA or SRG matters will depend upon the evidence led at trial. (G) ORDERS
10. In relation to the notice of motion filed on behalf of Mr Joffe on 11 March 2011 and the notice of motion filed on behalf of Mr Stromer on 11 March 2011, I make the following orders:- (1) The evidence particularised in the table to the Notice of Coincidence Evidence dated 8 July 2011, being Table A entitled "Table of related events the subject of counts in the Indictment" is admissible pursuant to s.98(1)(b) of the Evidence Act 1995. (2) The evidence particularised in the table to the Notice of Coincidence Evidence dated 8 July 2011 being Table B entitled "Table of related events not the subject of counts in the Indictment" is not admissible under s.98(1)(b) of the Evidence Act. (3) Leave is granted to any party to apply with respect to any consequential or ancillary orders.

APPENDIX TO JUDGMENT

1. This schedule refers to particular matters raised by the Crown in MFI 1 and in submissions and also by way of response and submissions made on behalf of Mr Joffe in relation to evidence the Crown proposes to adduce at trial pursuant to s.98.
2. The "events" identified in the Schedule are references to particular events contained in the Table (MFI 1) relevant to the counts in the indictment with which Mr Joffe has been charged.

Event 27: GasNet - (3) Joffe and Stromer communicated by telephone, by which means Joffe communicated the insider information to Stromer, thereby procuring Stromer to trade whilst in possession of the inside Information

Facts and contentions

1. The Crown case was that Mr Joffe attended the meeting on 8 June 2006 at BBI. It, inter alia, relied upon Mr Howell's statement. Mr Upson, Mr Whalley and others from BBI attended. Mr Howell's diary notes are relied upon as evidence of Mr Joffe's attendance. The Crown case is that, at the meeting, Mr Joffe and Mr Howell were given details of a proposed takeover of GasNet by BBI and APA as joint-partners. BBI told them they were planning an announcement of the takeover on 16 June 2006. It would be a script offer.
2. On the same day at 5.19 pm, 8.36 pm and 9.10 pm, Mr Joffe and Mr Stromer exchanged "mobile SMS calls".
3. On 9 June 2006, Mr Joffe sent an email to Mr Upson. On Saturday 10 June 2006, Mr Upson sent an email to Mr Joffe and others which included the briefing paper for the proposed GasNet transaction.
4. The briefing paper notes a maximum offer price of $2.80 and a current price of $2.25 with an announcement in mid-June.
5. Mr Stromer sent three text messages to Mr Joffe on Sunday 11 June 2006 and one on Monday 12 June 2006 at 11.59 pm.
6. On Tuesday 13 June 2006, Mr Joffe emailed Mr Upson, Mr Chong and others and informed them he was "conflicted out from this particular deal".
7. On Wednesday 14 June 2006, Mr Stromer's father, Tom Stromer, purchased 22,322 GasNet stapled securities at $2.21 through UBS (at a cost of $49,602.95). The purchase was allocated to an account in the name of Nathan Stromer and his sister, Simone Stromer.
8. At the same time, Tom Stromer acquired 10,000 GasNet stapled securities in his own name (at a total cost of $22,221.55).
9. At 11.17 pm that night, Mr Stromer placed a "mobile SMS call" to Mr Joffe. On 15 June 2006, there was one text message sent by Mr Stromer to Mr Joffe at 6.31 pm. Telephone calls were made between them at 6.47 pm and 9.18 pm.
10. On 16 June 2006, payment for both lots of GasNet securities was made in the sum of $71,824.50 from the Westpac account of Nathan and Simone Stromer.
11. That morning at 10.49 am, Mr Joffe visited the CommSec internet site for GasNet.
12. On 19 June 2006, the takeover bid was announced.
13. Between 2 August and 18 August 2006, Mr Joffe visited the website of GasNet on nine occasions. Competing bids were made as follows:- 15 August 2006 by Colonial - $2.88 cash per stapled security. 22 August 2006 by APA -$3.10 cash per stapled security.

Event 40: GasNet - (4) Stromer traded in or otherwise acquired share in the entities whilst in possession of the insider Information

1. Mr Stromer's father acquired the securities on 14 June 2006. This was said on behalf of Mr Joffe to be significant to the Crown case as to the "pattern" of conduct. It was the father, not Mr Stromer, who did the trading and had control of the relevant account.
2. A further point to be noted on Mr Joffe's behalf was that there was a very plausible explanation. Reference was made in this respect to an article in the Sun Herald on 21 May 2006 (Exhibit 1 at p.83). The article referred to "takeover speculation" in relation to GasNet.
3. Reliance was also placed on other evidence in the statement of Mr David Howell, a statement by him to the effect that "they would be an easy target for a takeover" (t.47).
4. Reliance was also placed upon material indicating that GasNet would be taken out of the Australian Stock Exchange ("ASX") 200 which would have a depressing effect on the price of shares indicating that it was good time to buy. This was said to be programmed to occur some two days after Mr Tom Stromer acquired the shares. These circumstances were said to constitute "a perfectly sensible reason to think the price was going to go down ..." (t.47).
5. These circumstances, it was submitted, constituted coincidence circumstances. These circumstances constitute what was termed "plausible alternative explanations for Mr Stromer's trading" (t.48).
6. The article was also relied upon by Mr Joffe as identifying likely bidders.
7. The Crown distinguished speculation from fact. The Crown acknowledged that the purchase was made by Mr Stromer's father a number of days after Mr Joffe is said to have received the information. However, it relied upon the fact that it was not necessarily in every case that Mr Stromer (and in this instance, his father) would act immediately upon being allegedly informed of insider information.
8. The Crown contended that sometimes time was taken to put together cash to make purchases. The essential point, it said, was that the purchases were made after the alleged receipt of the information.
9. The Crown case was that the purchase made by Mr Stromer's father was consistent, this being the first relevant purchase of financial products, to put "space" between himself and Mr Joffe and that Mr Stromer became "less cautious" as time went by (t.162). The Crown relied upon the contention that the evidence would support the proposition that there was a scheme operating between Mr Joffe and Mr Stromer in the relevant period and that the financial products traded (the subject of the counts) were all in relation to companies about whom Moody's were said to have received inside information.

Event 66: GasNet - (6) Stromer traded out of his position following an announcement or Moody's being advised of the transaction not going ahead

1. It was observed on behalf of Mr Joffe that there was a two month delay before Mr Tom Stromer sold his stocks and that it was, accordingly, "very difficulty to connect the acquisition of the GasNet shares with some speculative theory about selling out once the stock moves after an announcement..." (t.48).
2. It was further submitted for Mr Joffe that this took it out of any "kind of pattern", namely, that the purchases were by Mr Tom Stromer and not his son, Mr Stromer (t.48).
3. A further point was that there were two further takeover bids that occurred in the interim before Mr Tom Stromer sold and there was no suggestion that Moody's had information about those further bids (t.48).
4. Accordingly, it was said that there was an alternative rational explanation, namely, that Mr Tom Stromer saw the company was a takeover candidate based on speculation of the market. Had he been trading on inside information, he would have sold after the bid.
5. The Crown stated it was not an essential part of its case that Mr Stromer would trade out of a position immediately after an announcement was made which reflected information said to have been obtained by Mr Joffe. When the financial products were originally purchased, it was the Crown's position that Mr Joffe and Mr Stromer were then aware of the impending BBI takeover bid. The Crown case was that, as to the particular purchases of parcels of shares (one in the name of himself and another in the names of Nathan Stromer and Simone Stromer), Mr Tom Stromer may not have known of the content of inside information, but that did not at all mean that inside information had not been obtained by his son. Accordingly, the purchase by Mr Tom Stromer, it was contended, was not inconsistent with the Crown case.
6. As to the issue of timing in the sale of financial products, the fact of sale after an announcement is made was the important event. The timing of a sale could depend upon a number of factors after the announcement is made which may lead someone to hold the shares for a further period.

Event 79: GasNet - (7) Joffe maintained significant surveillance of the share price, usually on CommSec, throughout the material time

1. This event relates to the contention that, on 16 June 2006, Mr Joffe visited the CommSec internet site for GasNet.
2. The first submission related to Mr Joffe's internet usage involving CommSec searches and to the issue of significant surveillance on share prices using CommSec by Mr Joffe.
3. A question was raised on Mr Joffe's behalf as to what the similarity was in circumstances where there was no visiting the website until two days after the trading. Additionally, a contrast was made between the 600 hits made in respect of the BLD transaction. The submission was it was impossible to draw any "relevant probative inference" (t.49). It was submitted there was no pattern to the trading.
4. It was further submitted that there was "a perfectly sensible explanation" for the fact that Mr Joffe was looking at the GasNet share price, as it was part of his job.
5. In relation to the accessing of the website, a problem was said to exist in identifying the particular listed entity from the web page as it did not have the code for the particular stock.
6. This fact was said on Mr Joffe's behalf to be significant, given that the Crown case was that at various points the first time that Mr Joffe accessed the web page was on a particular day and the Crown sought to have an inference drawn from the fact that it was close in time to Mr Stromer's trading and that inferences should be drawn on that basis. The submission was (t.52):- "... that there are a very large number of CommSec hits where it is Mr Joffe's contention that in fact one can't tell what the stock price was."

Event 2: AIA - (1) Moody's received information from seven entities the subject of charges, being 'inside information'

Facts and contentions

1. In June 2006, B&B received a proposal from Deutsche Bank to consider the takeover of AIA.
2. On Monday 3 July 2006, Mr Howell and Mr Joffe attended a meeting with Mr Len Chersky of B&B and Mr Phillipe Fontaine of Deutsche Bank. At that meeting, they were given details of the proposed transaction to make a bid for an airport. The target was not identified. AIA was identified as the target at a meeting on 1 August 2006. The meeting was attended by Mr Howell, Mr Joffe and Ms Wells from Moody's and Mr Chersky and others. Mr Joffe's notebook entry noted a friendly takeover and "NZ Airport" Auckland.
3. An email was sent on 2 August 2006 from B&B to Mr Howell. Mr Joffe and Mr Chersky attached links to information including "www.auckland-airport.co.nz".
4. On the weekend of 5 and 6 August 2006, the Crown contended Mr Stromer and Mr Joffe spoke by phone twice. As noted below, it was contended for Mr Joffe he would not have been home on 5 August 2006. At 12.10 pm on Monday 7 August 2006, Mr Stromer called UBS. At 12.14 pm, he placed a "mobile SMS call" to Mr Joffe.
5. On 8 August 2006, Mr Stromer purchased 29,500 AIA shares at $1.6972 through UBS.
6. On 9 and 10 August 2006, Mr Stromer placed mobile calls to Mr Stromer (two on 10 August). The same day, Mr Joffe visited the CommSec website "security Code - AIA".
7. On Tuesday 15 August 2006, $50,000 was withdrawn from Mr Stromer's ANZ account and transferred to "UBSWA Equities".
8. On 15 August 2006, Mr Stromer placed a "mobile SMS call" to Mr Joffe at 12.02 pm and at 12.03 pm made a call to UBS.
9. On 16 August 2006, Mr Stromer called UBS. At 6.15 pm, he sent Mr Joffe a text message. At 6.16 pm, Mr Stromer called Mr Joffe on his mobile phone.
10. On 17 August 2006, $50,478.40 was credited to Nathan and Simone Stromer's UBS account. The same amount was debited to pay for the acquisition of 29,580 AIA shares acquired on 8 August 2006.
11. On 12 September 2006, Mr Chersky sent an email to Ms Wells, "... the deal dead at this point".
12. On 12 September 2006 at 10.17 am, Mr Joffe received an email from Ms Wells advising "... not going to plan for B&B ...". At 10.55 am, Mr Joffe visited the CommSec website re AIA.

Event 28: AIA - (3) Joffe and Stromer communicated by telephone, by which means Joffe communicated the insider information to Stromer, thereby procuring Stromer to trade whilst in possession of the inside Information

1. In relation to electronic communications between Mr Joffe and Mr Stromer, it was observed on behalf of Mr Joffe that the text messages relied upon by the Crown were from Mr Stromer to Mr Joffe and they would not be seen as an occasion for communication of inside information.
2. In relation to two particular phone calls, analysis revealed that, on one day (5 August 2006), Mr Joffe could not have been at home. On the other date (6 August 2006), the call occurred five days after 1 August 2006, when, on the Crown case, Mr Joffe learned of AIA as a "target". Accordingly, the submission was, there was no evidence of a telephone communication immediately after 6 August 2006 and before the purchase of shares on 8 August 2006.

Event 41: AIA - (4) Stromer traded in or otherwise acquired share in the entities whilst in possession of the inside information

1. As noted above, Mr Stromer purchased the AIA shares on 8 August 2006. The Crown relied on an "SMS call" to Mr Joffe placed by Mr Stromer at 12.14 pm on 7 August 2006.
2. However, it was said that a check of the entries shows that there was a call made on 6 August 2006 and not Monday 7 August 2006. Additionally, the following Monday was not a trading day.
3. The second point made for Mr Joffe was that there was a rational alternative explanation for Mr Stromer's trading. Particular reliance was placed upon a media release of 24 July 2006: Exhibit 1 at p.200. The media release referred to an announcement of the re-valuation of the non-current assets of AIA which resulted in an increase in value of $3,399 million.
4. The article was only a week or so before Mr Stromer traded in the AIA shares. Reliance was place on the fact that the article reflected a view in the market that the airport was a strong takeover candidate, although not necessarily an imminent takeover. The submission was that Mr Stromer can be seen in context to have traded while there were "market rumours about takeovers" or "market views formed that a company is a strong takeover candidate" (t.58).
5. Against this background, questions were posed as to how the Crown could explain these circumstances and make it fit into its case theory (t.58). In relation to Mr Stromer trading out of AIA shares, reference was made to the document dated 12 September 2006 in which it was recorded, inter alia:- "All is not going to plan for B&B". They are still 'in negotiations' with Auckland Airport management and are not sure what the outcome will be ..."
6. Mr McHugh observed that the email of 12 September 2006, in this respect, was some 35 days after Mr Stromer acquired the shares, that is to say, he held the shares for a longer period than on other occasions and this went to the issue of "similarities".
7. On 13 September 2006, Mr Stromer sold the shares. The submission was (t.59):- "The Crown is certainly right that he sells his shares the day after this, but the real question is: how strong is the inference that this is what causes him to sell when he's been prepared to sit on them for so long?"
8. The Crown in MFI 2 relied on the contention that Mr Joffe viewed the Market Depth page for AIA on 1 August 2006 and on 10 August, 18 August and 12 September 2006, he viewed the Charting Page for AIA.

Event 80: AIA - (7) Joffe maintained significant surveillance of the share price, usually on CommSec, throughout the material time

1. This item relates to the use of CommSec. It was noted that, between 1 August 2006 and 12 September 2006, Mr Joffe used the CommSec internet site for AIA on four occasions for a period of 43 days, being an average of one every 10 days.
2. The submission was that the access to the website was explicable by the fact that Mr Joffe had been given information that AIA was a potential target and, accordingly, it was not difficult to see why he might be interested in it.
3. On the issue of "similarities", it was said to differ from other trading activities such as BLD where there was a very large number of occasions on which the CommSec site was accessed.
4. Additionally, it was said the fact that he only accessed the site on four occasions was "hardly powerful evidence that he is watching the stock to see what is happening to it" (t.64). It was said to be different from any other kind of pattern.
5. It was also said to be a departure from the "pattern" that Mr Stromer hung on to the shares for 35 days and that there was no announcement causing him to sell. Additionally, it was noted that the "Crown theory" was that what prompted the sale was not an announcement but the giving of further information to Moody's.
6. Finally, as noted above, the submission was that the quality of the information was very low and that the takeover price was less than the company was trading for.

Facts: AWB

1. In 2006, Mr Howell and Mr Joffe were respectively senior and associate analysts in respect of the AWB Harvest Finance Ltd "credit".
2. On 14 September 2006, Mr Howell sent "pre-meeting" information regarding AWB to Mr Cahill, CEO of Moody's, PA to Mr Cahill, Mr Patrick Winsbury (a senior analyst) and Mr Joffe.
3. On Friday 15 September 2006 and the following weekend, Mr Joffe and Mr Stromer spoke by phone on eight occasions and exchanged one "SMS call".
4. On Monday 18 September 2006 at 3.00 pm, the pre-meeting took place with AWB representatives in preparation for a Melbourne conference on Wednesday 20 September 2006. Mr Joffe attended.
5. On 18 September 2006, Mr Joffe viewed a Sydney Morning Herald article relating to AWB and later at 2.59 pm viewed the AWB share price on the CommSec website. After the pre-meeting, he viewed internet sites regarding AWB.
6. On 19 and 20 September 2006, Mr Joffe visited a number of websites relating to AWB.
7. On Wednesday 20 September 2006, Mr Joffe, Mr Cahill, Mr Howell and Mr Winsbury met with AWB representatives. At the meeting, information was disclosed:- That AWB was considering providing an indemnity to its subsidiary AWB International Ltd regarding the potential tax exposures and liabilities arising out of the Royal Commission into its activities. AWB's wheat production forecast for 2006/2007 was lower than previously estimated.
8. Mr Joffe's notes recorded, inter alia, "... ABARE forecast correct- 16.4m".
9. On the evening of 12 September 2006, Mr Joffe phoned Mr Stromer.
10. On 13 September 2006, Mr Joffe and Mr Stromer made telephone contact on three occasions.
11. On Friday 22 September 2006, Mr Joffe, by email to Mr Morris of AWB requested a draft of AWB's proposed announcement regarding the indemnity.
12. On 22 September 2006, Mr Joffe checked the share price regarding AWB on CommSec.
13. On the weekend of 23 and 24 September 2006, Mr Joffe and Mr Stromer made telephone contact on nine occasions.
14. On Monday 25 September 2006, Mr Stromer established a trading account with CMC Markets. At 11.43 am that day, Mr Stromer called Mr Joffe's mobile phone and again Mr Stromer called at 3.12 pm. Mr Joffe used his home phone to call Mr Stromer's home at 8.36 pm.

Event 16: AWB - (2) Joffe was in direct receipt of the inside information in some instances and indirectly in others

1. The submissions at some length referred to the position of the AWB following the Royal Commission into the AWB concerning information about the AWB. First, as discussed above, AWB advised Moody's that it would indemnify its subsidiary, AWBI, in respect of legal costs incurred in the Royal Commission and any tax that might be assessed against AWBI in connection with transport fees that were paid for wheat sold to Iraq. The estimate, on a worst case scenario, was $259 million.
2. The second segment of information, also discussed above, related to the wheat crop forecast. The publication, ABARE, forecast production of 16.4 million tonnes.
3. The point made in submissions for Mr Joffe was that these matters "were out in the open". Although it was stated in submissions for Mr Joffe that an attempt was not being made to contradict the Wilson Report on the "material information", nonetheless emphasis was placed upon the fact that the information said to have been publicly known meant that the "material information" was very poor quality information for Mr Joffe to have traded on. This, it was contended, was relevant to the issue of "probabilities" in terms of assessing "significant probative value" (t.68). The further submission was (t.69):- "... It is just not rational to infer that one would trade on that part of the information ..."
4. In support of this contention, it was submitted that it was known that the company was going to have to support its subsidiary and that the expected tax liability was known. The submission was repeated, accordingly, that the information was (t.70):- "... so weak that it is just in my submission really irrational to suggest that days later with all this being in the market Mr Stromer is trading on that basis."
5. In relation to the ABARE published forecast, the Crown relied upon the difference between a forecast and an actuality. In this respect, reference was made to Mr Joffe's notebook record of the meeting with AWB, in particular, the entry which includes the words "that the ABARE forecast was correct" (t.169). The submission for the Crown was that the position had moved from where ABARE had made a forecast to where the forecast was confirmed.
6. The Crown contended that the arguments concerning materiality do not detract from Mr Wilson's evidence and that, on the present application, full weight had to be given to that evidence.

Event 29: AWB - (3) Joffe and Stromer communicated by telephone, by which means Joffe communicated the insider information to Stromer, thereby procuring Stromer to trade whilst in possession of the inside Information

1. It was noted that in the eight days after the receipt of the information, Mr Joffe and Mr Stromer spoke by telephone on 18 occasions and exchanged three text messages (t.72). It was observed that the three text messages all originated from Mr Stromer.
2. Whilst Mr McHugh acknowledged that there were "lots (of) opportunity to communicate because they were friends ..." (t.72), that did not take the Crown case very far insofar as reliance was placed on the phone calls. The Crown needed to point to a particular occasion when it was said that there was relevant communication and that this went to the issue of "procuring" (t 72-73).
3. It was further observed that, of the 18 phone calls, many of them were very short and the inference is that there was not much that could be inferred from them (t.73).

Event 42: AWB - (4) Stromer traded in or otherwise acquired share in the entities whilst in possession of the inside information

1. As noted above, on 27 September 2006, Mr Stromer acquired 135,000 short AWB CFDs.
2. It was submitted that there was a perfectly rational explanation for the trading, namely, newspaper articles which were adverse following the Royal Commission and that there was considerable other material to that effect. Additionally, reliance was placed upon the fact that the Royal Commission report was due to come down on 29 September 2006.
3. The Crown relied upon announcements made by AWB on 28 September 2006 to the ASX, in particular, the announcement of a reduction in 2006/07 wheat production forecast from 18 to 20 million tonnes to 12 to 15 million tonnes.
4. The other matters referred to in the discussion of factual matters were also relied upon by the Crown.

Event 68: AWB - (6) Stromer traded out of his position following an announcement or Moody's being advised of the transaction not going ahead

1. As noted above, on 28 September 2006, AWB made the announcements to the ASX as detailed above. On 29 September 2006, Mr Stromer disposed of all of his 135,000 CFDs in AWB. This was said to be the day after the relevant information came into his possession. The announcement was the wheat forecast was down to 12 million tonnes. In submissions for Mr Joffe, it was said, however, that that was worse than the insider information said to have been given to Mr Joffe. The submission was that this was in line with market expectations, but worse than what Moody's had been told (t.74).
2. It was said that it was hardly surprising that Mr Stromer traded out as he had a "short position".
3. The submission for the Crown was that the submissions for Mr Joffe as to a further reduction in wheat production forecast (there was no evidence that Moody's had the information and, therefore, no evidence that could lead to an inference that that information was passed on to Mr Stromer) was irrelevant because the information is not pleaded as being the substance of the charge. It was irrelevant that Moody's were not aware that AWB would be announcing a further reduction in wheat production. What is pleaded in the charges is the information that was provided on 20 September 2006 to Moody's by AWB.
4. The Crown also relied upon evidence of contact which was said to be significant between Mr Stromer and Mr Joffe on 29 September 2006. Mr Stromer sent three text messages to Mr Joffe between 10.15 am and 10.42 am. It was submitted this supported an inference that there was return text messages from Mr Joffe, there being three messages within a short period of time. He spoke to Mr Joffe at 11.00 am and 11.50 am and then immediately began to sell his AWB CFDs at 11.51 am. They again spoke at 12.54 pm and Mr Stromer was said to have again subsequently commenced disposing of more of his AWB CFDs at 12.57 pm, three minutes after he had made the call to Mr Joffe.

Event 81: AWB - (7) Joffe maintained significant surveillance of the share price, usually on CommSec, throughout the material time

1. In the Crown's submissions it was noted that, between 18 and 27 September 2006, a period of approximately nine days, Mr Joffe visited the AWB website on eight occasions.
2. It was observed that AWB was a client of Moody's at the relevant time and it was noted that Mr Joffe, having been at the relevant meeting with AWB, was looking at the website.
3. As opposed to the "overall conclusion" to be drawn, it was submitted for Mr Joffe (t.75):- "First of all, it is a weak case as to the information and as to the inferences. And it just doesn't seem to fit the pattern. If this was such good information, why did Mr Joffe wait days before he trades?"
4. It was further submitted that there was nothing unusual about the pattern of phone calls made over the 18 days. It did not fit the pattern of Mr Joffe obtaining information and then passing it on to Mr Stromer to trade. It did not indicate persistent examination of the website.

Events 4 and 17: BLD - (1) Moody's received information from seven entities the subject of charges, being "inside information"; (2) Joffe was in direct receipt of the inside information in some instances and indirectly in others

Facts

1. Moody's representatives met with BLD representatives on 25 October 2006. At the meeting, Moody's was told of a downturn in the US that was going to be more severe than anticipated and NSW would remain poor, leading to probably lower results in 2007 than had been anticipated.
2. In submissions, reference was made by Mr McHugh to a document dated 19 October 2006 (Exhibit 1, p.415). It referred to that the trading results for the September quarter were "significantly below" last year. The company did not anticipate operating profit for the half year would vary by more than 15%.
3. A question was posed as to why BLD would tell Moody's six days later that they were about to make an announcement of downgrade.
4. Mr Joffe was not at the relevant meeting. The question was whether anything was said at the meeting on 25 October 2006 about a profit announcement.
5. Submissions were made in relation to a number of documents contained within Exhibit 1, in particular, at p.449 ("Financial indicators"), in particular, in relation to 2006 and 2007 forecasts (pp.485, 493 and 499). Submissions were made in relation to these documents at t.80-82.
6. Reference was made to there being no evidence that the Moody's representatives were told that there was going to be an announcement of a profit downgrade, that, in fact, the documents pointed in the other direction (t.82).
7. On the question as to whether anything was said at the meeting on 25 October 2006 about a profit announcement, the Crown responded, firstly, by relying on the expert report of Mr Wilson as to "materiality" of inside information, secondly, that it was not asserted by the Crown that inside information was disclosed during the Moody's "pre-meeting" and, thirdly, reliance was placed upon a note by Mr Brian Cahill of 25 October 2006 containing the entry:- "Will be /- downturn in US is going to be more severe than anticipated & NSW still poor (these two are 60% earnings) leading to probably lower results in 07 than originally anticipated."

Event 17: BLD - (2) Joffe was in direct receipt of the inside information in some instances and indirectly in others

1. The Crown case is that Mr Joffe was told the effect of the inside information by 10.37 am on Thursday 26 October 2006 at which point he accessed the CommSec internet site for BLD. On that day, 26 October 2006, a meeting took place with BLD and Moody's where the information was communicated to Mr Cahill, Mr Fullerton and Mr Brown. On that day, Mr Joffe viewed the BLD CommSec page on 15 occasions. He was in contact with Mr Stromer throughout the day. Mr Stromer purchased the CFDs the same day.
2. The Crown case is that there was no legitimate explanation for Mr Joffe's viewing the BLD CommSec page on that day. His repeated viewing of the BLD CommSec page and contact with Mr Stromer throughout the day, together with the opportunity, it was asserted, that he had to learn the information within Moody's as well as the timing of Mr Stromer's purchases are all factors available to be taken into account.
3. Mr McHugh observed that there was no document in Moody's possession that recorded that there was going to be such an announcement, hence, Mr Joffe could not have found it on the server or on a file or elsewhere.
4. There was said to be nothing in the statements of Mr Peter Fullerton or Mr Cahill as to this aspect.
5. Reference was made to extracts from Mr Stuart Brown's s.19 examination (Exhibit 1, pp.516-520).
6. It was submitted that there was no document suggesting that Moody's were told that there was going to be an announcement of a profit downgrade. Reference was also made to Mr Brown's evidence at Exhibit l, p.522.
7. It was submitted that the inference that Mr Joffe had information does not appear to be available on any basis and that it can be concluded that the jury will be asked to infer that fact "somehow or other".
8. The Crown has responded by observing that, firstly, BLD was not a "credit" of Mr Joffe's and he had no reason to view the BLD CommSec website. The Crown did not assert that inside information was disclosed at the pre‑meeting. However, on 26 October 2006, the day following the BLD meeting with Moody's, at which it was said the information was communicated, Mr Joffe viewed the web page on 15 occasions while in contact with Mr Stromer throughout the day. Mr Stromer purchased the CFDs the same day.

Event 43: BLD - (4) Stromer traded in or otherwise acquired share in the entities whilst in possession of the inside information

1. On 26 October 2006, Mr Stromer acquired 54,200 short BLD CFDs said to indicate he was expecting the price of the security in BLD to decline. It was contended for Mr Stromer there is a clear alternative explanation for that. On 19 October 2006, there had been an announcement. It was submitted "... it looked as though things were going badly ..." (t.86). Given "problems internationally", it was there asserted it is not surprising that Mr Stromer formed the view the price was going down (t.86).

Event 69: BLD - (6) Stromer traded out of his position following an announcement or Moody's being advised of the transaction not going ahead

1. The "event" is Mr Stromer trading out of his short position, "The same day (27 October 2006) ..." by 6,000 CFDs. On Thursday 2 November 2006, he reduced his short position in BLD by a further 8,000 CFDs and again on 8 November 2006 (19,000 CFDs) and 13 November 2006 (33,200 CFDs).
2. It was submitted on behalf of Mr Stromer that there was another explanation - he took a short position betting on the stock going down.

Event 82: BLD - (7) Joffe maintained significant surveillance of the share price, usually on CommSec, throughout the material time

1. This event asserts that, between 26 October and 13 November 2006, Mr Joffe visited the CommSec internet site for BLD on approximately 696 occasions. The submission was the high number of visits to the website in relation to this event is so high as not to fit the "pattern" (t.86). The contention is that there is no relevant "similarity".

Facts: AIHCA

1. Mr David de Loub was Group Treasurer at Alinta Ltd ("Alinta"). As at November 2006, that company was the owner and manager of energy and infrastructure assets including gas, pipes and energy transmission lines. Alinta also owned power generation assets.
2. Following a divestment of assets into AIHCA, it was decided, as part of a broader corporate strategy, to consolidate all of Alinta's assets and acquire AIHCA.
3. The acquisition of AIHCA was known within Alinta as Project Wren/Little Duck. It was stated that it was common practice to use code names for acquisitions and takeovers because it provided Alinta with comfort in terms of confidentiality.
4. Mr de Loub's role in the acquisition of AIHCA involved the management of the credit rating implications for Alinta and their subsidiary companies. In the Crown case, it is said that an integral part of Mr de Loub's role was to manage the interface with Moody's during the acquisition process.

Event 5: AIHCA - (1) Moody's received information from seven entities the subject of charges, being 'inside information'

1. This event relates to a communication relied upon by the Crown on 10 November 2006 between Mr Adrian Atkins of Moody's and Mr de Loub that AIHCA planned to announce a takeover bid for the issue partly paid stapled securities of AIHCA and thereafter APA.
2. The alleged advice was that the takeover bid would be announced on Wednesday 15 November 2006.
3. The contention for Mr Stromer was that this was information communicated to Mr Atkins, not to Mr Joffe (t.80). The issue was the "information". In particular, who got the information (t.89)?
4. Mr Atkins' statement (commencing at p.9 of Exhibit 2) refers to the conversation with Mr de Loub at paragraph [73]. In paragraph [76], he said he could not recall discussing the proposed takeover bid with any other Moody's employees but added, "It is possible that such a conversation did occur". He did discuss it with Mr Joffe on one particular occasion which he identified in that paragraph of the statement.
5. The statement, despite its terms, expressly left open the possibility that Mr Atkins spoke to Mr Joffe on the issue, although he, Mr Atkins, has no specific recollection of a particular conversation with him about that aspect. The submission for Mr Joffe, however, focussed, not on that aspect, but on the abovementioned denial of having spoken about the matter on the particular occasion identified to in the statement concerning Mr Howell's diary.

Event 44: AIHCA - (4) Stromer traded in or otherwise acquired share in the entities whilst in possession of the inside information

1. This event relates to Mr Stromer purchasing AIHCA CFDs (962,000) on Monday 13 November 2006 commencing at 11.46 am.
2. The Crown seeks to rely upon evidence to establish that, on Saturday 11 November 2006 on two occasions Mr Stromer used his home phone to call Mr Joffe's home phone and also on Sunday 12 November 2006, Mr Stromer used his home phone to call Mr Joffe's home phone.
3. On Monday 13 November 2006, the Crown case is that between 9.28 and 11.50 am, Mr Joffe visited the CommSec internet site for AIHCA 13 times.
4. It was submitted there were alternative explanations for the purchases. Reliance was placed upon information that was publicly available, including Macquarie Bank "telling the market" on 30 October 2006 that there was an 80% probability that a takeover would be announced (t.92).
5. The Crown pointed, firstly, to the fact that AIHCA and APA were not "credits" of Mr Joffe and, secondly, to the fact of Mr Joffe visiting the CommSec website for AIHCA on the day Mr Atkins spoke to him about Mr Howell's calendar. This occurred two minutes after Mr Joffe spoke to Mr de Loub. Mr Joffe visited AIHCA CommSec pages on two other occasions the same afternoon as well as the CommSec page for APA, which was another takeover target that the Crown asserts was discussed between Mr Atkins and Mr de Loub. Records allegedly indicate that Mr Joffe had not previously visited the AIHCA website before that day. The Crown relies upon what it referred to as (Crown submissions at t.175):- "... a congruence in timing of activity by Mr Joffe and the receipt of that information by Moody's. That is particularly relevant given that Mr Joffe was not the person who received the information from the credit directly."
6. The Crown also pointed to some of the funds that Mr Stromer used to make the purchases.
7. On 13 November 2006, Mr Joffe obtained a bank cheque for $30,000 which was payable to Mr Stromer. On 14 November 2006, Mr Stromer attempted to bank it into his CMC Markets account. He was unable to do so and, accordingly, banked it into his own account and obtained a cheque for $30,000, which was deposited in the CMC Markets account. After the deposit, Mr Stromer purchased a further 229,000 long AIHCA CFDs. Mr Stromer's evidence to the Australian Securities and Investments Commission ("ASIC") was that the $30,000 were monies borrowed from Mr Joffe. The details about this aspect were summarised in the Crown submissions (at t.178).

Facts: SRG

1. The Crown case is that at 11.46 am on 13 November 2006, Mr Stromer commenced trading in AIHCA CFDs with CMC Markets, acquiring 4,000 long AIHCA CFDs.
2. The Crown case also is that 11.51 am, Mr Joffe used his mobile phone to call Mr Stromer's mobile phone.
3. The Crown case also alleges that between 12.01 pm and 3.36 pm, Mr Stromer acquired a further 551,000 long AIHCA CFDs.
4. The Crown case also alleges that between 12.04 pm and 4.21 pm, Mr Joffe visited the CommSec internet for AIHCA approximately 56 times.

Event 6: SRG (Charge 6) - (1) Moody's received information from seven entities the subject of charges, being 'inside information'

1. There are four counts in the indictment against each accused in relation to SRG (eight in total). This event concerns contact made on 24 November 2006 by Transurban Ltd ("Transurban") (a toll road developer) with Ms Natalie Wells of Moody's in relation to a proposed announcement that the company was intending to make a takeover bid for SRG. (The takeover was later announced on 14 December 2006.)
2. Transurban was a "credit" of Mr Joffe. When the first information came to Moody's on 21 November 2006 about a proposed announcement, SRG was tentatively identified as the target of Moody's, although Transurban had not confirmed that fact. It was observed, on that assumption, that Mr Joffe may be in a position of conflict.
3. An initial invitation to a meeting sent on 27 November 2006 was withdrawn later that day.
4. The precise information concerning the proposed takeover was provided to Moody's at a meeting on 30 November 2006. The Crown, however, alleges that the effect of it was already apparent.
5. On 27 November 2006, a series of emails were sent by Transurban to Mr Howell and others at Moody's providing further details of the proposed acquisition.
6. The submission for Mr Joffe was that the evidence did not support the proposition at the start of the trading that Mr Joffe had any information as he was in Singapore (t.93). It was submitted that it is difficult to infer that Mr Stromer was conducting his trading based on information that is already in the market. It is a coincidence (t.93).
7. It was observed that Mr Joffe was in Singapore between 25 and 30 November 2006. There is no evidence he accessed his computer whilst in Singapore. He was initially invited to attend the Transurban meeting but the invitation was cancelled by reason of the "conflict" issue. Mr Howell was in Sydney in the above period. There was only one telephone call between them lasting for 6.5 minutes. Mr Howell does not recall the contents of the phone call, but assumes it was about work-related issues.
8. Mr Stromer, it was noted, traded at 2.22 pm on 30 November 2006. Mr Joffe was on the plane at that point. It was observed that there was no evidence of "stock checking" by Mr Joffe following his return to Sydney. It was submitted that this "event" does not conform to the "pattern" asserted in the Crown case.

Event 32: SRG (Charge 6) - (3) Joffe and Stromer communicated by telephone, by which means Joffe communicated the insider information to Stromer, thereby procuring Stromer to trade whilst in possession of the inside Information

1. In MFI 1, the Crown referred to Mr Joffe and Mr Stromer speaking by telephone on the evening of 27 November 2006 and again on the afternoon of 28 November 2006.
2. The reply on behalf of Mr Joffe was that there is no evidence of them communicating of inside information. There is no evidence of procuring.
3. In MFI 2, the Crown responded saying that it relied upon the timing of the communication in support of its case that Mr Joffe procured Mr Stromer and that he passed the information to Mr Stromer and that Mr Stromer, in trading, acted on it.
4. In oral submissions, the Crown stated it relied also on the other coincidences identified so as to defeat an argument that the purchases of CFDs were simply a matter of coincidence.
5. In response, it was contended for Mr Joffe the Crown's reply does not address the submissions as to whether or not Mr Joffe received inside information.
6. It was contended the inferences relied upon by the Crown were weak and did not overcome the gap in the evidence as to the receipt of information. Some of the text messages sent by Mr Stromer occurred when Mr Joffe was on the plane returning from Singapore.

Event 45: SRG (Charge 6) - (4) Stromer traded in or otherwise acquired share in the entities whilst in possession of the inside information

1. The Crown, in MFI 1, referred to Mr Stromer purchasing 265,487 SRG CFDs on 30 November 2006.
2. The response for Mr Stromer was that he had explained his reasons for acquiring SRG securities.
3. In MFI 2, the Crown referred to the fact that Mr Joffe and Mr Atkins worked on the preparation of the financial model for the RAS on Saturday 2 December 2006 in advising Transurban is evidence of opportunity for Mr Joffe to learn of the proposed takeover. Mr Joffe assisted, notwithstanding that he was to have been excluded due to his position of conflict. It goes against Moody's managing the conflict appropriately.
4. There was telephone contact later that day between Mr Joffe and Mr Stromer and again on Sunday 3 December 2006. There was an email from Mr Stromer to Mr Joffe on Monday at 2.05 pm and Mr Stromer sent a text message at 2.23 pm before acquiring further SRG CFDs between 2.46 pm and 2.53 pm.
5. In response in Reply Submissions for Mr Joffe, it was said, inter alia, the alleged work with Mr Atkins did not occur until 2 December 2006 two days after Mr Stromer's trading and one day after Mr Joffe returned from Singapore.
6. In MFI 2, the Crown response was that the procuring occurred between 27 and 30 November 2006. The fact that Mr Joffe was visiting websites between 7 and 13 December 2006 is relevant to that earlier procuring as indicating Mr Joffe's interest in the share price which is relevant to the value of CFDs. The profit achieved by Mr Stromer was not manifest until Mr Stromer traded out of his positions. This was after 30 November 2006 and not before 14 December 2006 when the public announcement of the takeover was made.

Event 20: SRG (Charge 7) - (2) Joffe was in direct receipt of the inside information in some instances and indirectly in others

1. In MFI 1, the Crown relied on Mr Joffe being told the effect of the inside information by 11.24 am on 1 December 2006 when he had his last communication with Mr Stromer before Mr Stromer purchased further SRG CFDs.
2. It asserted Mr Joffe was told the effect of the information by Mr Howell, Mr Atkins or Ms Wells who were all apprised of the inside information at the meeting with Transurban on 30 November 2006.
3. In response, there was said to have been no communication by Mr Howell, Mr Atkins and Ms Wells.
4. In Mr Joffe's Reply Submissions, reliance was placed on Mr Atkins' statement (Exhibit 2, Tab 20, p.122-123). Mr Atkins there recalled working on the Transurban financial model with Mr Joffe on 2 December 2006. He did not recall discussing the identity of the takeover target with Mr Joffe.
5. In his examination, he said he did not think he would have had such a conversation with Mr Joffe. A little later, he said, following instructions from Mr Cong to work with Mr Joffe but to be a bit sensitive with the information, "... so I assume that's what I did" (Exhibit 2, p. 123).
6. It is noted that there was contact by Mr Stromer with Mr Joffe on Monday 4 December 2006 at 2.05 pm and a text message sent by him at 2.23 pm before acquiring further SRG CFDs between 2.56 pm and 2.53 pm.
7. On 4 December 2006, Mr Stromer opened an account with UBS - Mr Stromer acquired $20,000 worth (ie 500,000 SRG warrants). In the course of the conversation he stated he did not want to draw attention to himself and that he thought SRG would be taken over.
8. On 3 December 2006, a further 400,000 Macquarie Bank SRG warrants were ordered by Mr Stromer.
9. On 14 December 2006, the bid was announced by Transurban and SRG at 9.12 am. Internet searches of "Recent Sensitive Announcements" were made by Mr Joffe at 9.30 am, 9.53 am and 10.09 am. He then rang Mr Stromer at 11.02 am. Between 11.26 am and 11.30 am, Mr Stromer proceeded to dispose of all his SRG CFDs. At 11.38 am, he instructed UBS to dispose of all his Macquarie Bank SRG warrants.

Facts: RIN

1. On 27 October 2006, Cemex (a Mexican corporation) made a public announcement that it was making an unsolicited bid to acquire the issued shares of RIN. A Bidder's Statement was lodged with the ASX on 20 October 2006.
2. RIN is an Australian based building material company. UBS was engaged by RIN as a Corporate Defence Advisor and, in that capacity, advised RIN in connection with a proposed bid by Cemex to takeover RIN. Mr Mathew Taylor of UBS Investment Bank liaised with Moody's in relation to the provision of a rating in connection with a proposed Cemex bid.
3. Moody's was retained to provide a rating outcome about the implications for RIN's rating arising from strategies being considered by RIN to defend itself against the Cemex bid.
4. RIN put forward for Moody's consideration six recapitalisation scenarios including state debt funded as well as partially sponsor funded special dividend payments to shareholders. The recapitalisation strategies were said to represent an attempt to crystallise some additional value which was not initially reflected in RIN's share price prior to the takeover offer from Cemex. Further, it was said the intention, following confirmation from the ratings agencies that RIN could maintain investment grade ratings, RIN would, at a later date, put forward a proposal for shareholders advising them not to accept the Cemex offer and in return they would receive a significant cash payment. UBS, in conjunction with RIN, prepared a rating agency presentation in order to assist Moody's.
5. The project was given a project name to maintain confidentiality of the transaction.
6. On 17 January 2007 at 3.21 pm, the Crown case is that Mr Fullerton and Mr McGregor of Moody's received from UBS a draft presentation for their meeting on RIN later that week. It set out further details of the proposed strategies of RIN to deal with the Cemex takeover bid.
7. The Crown relies upon checking of the RIN Commsec website by Mr Joffe that afternoon. The Crown case is that Mr Joffe and Mr Stromer spoke twice later that evening.
8. It is also alleged on 18 January 2007, Mr Stromer transferred $25,000 and $50,000 into his account with City Index.
9. It is alleged that Mr Joffe and Mr Stromer telephoned each other on two occasions later that day.

Event 10: RIN - (1) Moody's received information from seven entities the subject of charges, being "inside information"

1. In MFI 1, Event 49, the Crown stated that, on 22 January 2007, Mr Stromer commenced acquiring RIN CFDs and he continued to purchase them on 23 January, 25 January and 29 January 2007.
2. In response, it was noted for Mr Joffe, that Mr Stromer also sold RIN CFDs on 24 January 2007 and that Mr Stromer had explained his reasons for acquiring RIN securities.
3. An independent valuation put RIN securities at between $20.58 and $23.04 per security. Mr Stromer acquired a small parcel on 22 January 2007. RIN securities opened at $18.20 that day. On 23 January, he acquired a substantial parcel of RIN CFDs after Cemex announced that day an increase in the size of its loan facilities and a term loan would replace a bridging loan. This allegedly conveyed Cemex's serious intent to increase the offer price. Mr Stromer commenced transferring funds on 17 January 2007, two days before the meeting on 19 January 2007.
4. The Crown relies on evidence that the increase in earnings per share was material and was beyond speculation that RIN would be a takeover target. The information was alleged to have been consistent with Mr Stromer taking a "long position" in that he expected the share price to rise as would be expected if Moody's instructed there would be a 16% rise in earnings and there would be a cash back and new share offer strategy. The Crown distinguished a confirmed increase in earnings not a forecast three months in advance.
5. Also, it was accompanied by the cash back to shareholders plus shares in a new company.
6. The Crown also relied upon Mr Stromer not trading until Monday 22 January 2007, a week before Moody's became aware that RIN would be approaching it to obtain a ratings assessment of the various defensive proposals.
7. Moody's received the totality of information between 15 and 22 January 2007. The last meeting between RIN and Moody's took place on Friday 19 January 2007.
8. In oral submissions, Mr McHugh referred to the terms of the indictment. It was observed that the takeover had already been announced. The question was what steps would RIN take in defence of the takeover. RIN had engaged Moody's to provide indicative ratings in relation to various restructure scenarios proposed as a defence to the Cemex, SAB de CV takeover offer. Each scenario was designed by RIN to maximise shareholder value and provide a significant cash payment to shareholders along with shares in a new company. In the course of the engagement, RIN informed Moody's that its third quarter trading results included a 15% increase in earnings per share.

Event 36: RIN - (3) Joffe and Stromer communicated by telephone, by which means Joffe communicated the insider information to Stromer, thereby procuring Stromer to trade whilst in possession of the inside information

1. The submission for Mr Joffe was that there is no evidence of the communication of inside information. None of the six calls between 15 and 22 January 2007 referred to by the Crown were made in work hours. The general submission made on the subject of telephone communications between Mr Joffe and Mr Stromer was relied upon in relation to these calls. Additionally, it was submitted, there was no evidence of procurement by Mr Joffe.
2. The Crown, in response, contended the telephone communications constituted direct evidence of the opportunity Mr Stromer and Mr Joffe had to communicate about the information.
3. Mr McHugh noted the number of calls represents less than a call a day and it was therefore very difficult to draw an inference from them (t.107). In fact, given the volume of securities that Mr Stromer was trading, it was said to assist the accused.
4. On the Crown theory of "joint enterprise", it was argued for Mr Joffe that it was difficult to see why Mr Stromer was carrying an exposure of about $7 million (t.107). Making fewer calls was not in accordance with the Crown contention as to a "pattern".
5. Mr Stromer's position was a long position. He expected the stock to rise. This was in the middle of the takeover battle (t.107).
6. The Crown, in oral submissions, responded to what was termed the argument as "a lack of similarity" (t.202) - that on 24 January 2007, Mr Stromer sold some shares in RIN. Before the announcement, he did, in fact, sell 5,000 shares. That was the only parcel of shares that he had purchased prior to any announcement being made. The Crown's contention was that the purchase of shares was a mistake which he quickly rectified. On the same day as purchasing them, he sold the same parcel of shares.
7. The purchase of Mr Stromer's CFDs rather than shares made sense as one's capital goes a lot further and the profit per outlay of capital is greater than with shares. His sale, it was said, was not inconsistent because it occurred straight away (t.202). By selling the shares, Mr Stromer was able to purchase 10,000 CFDs. It was argued this was consistent with the Crown case about his activity being motivated by information available to him from Mr Joffe.

Event 23: RIN - (2) Joffe was in direct receipt of the inside information in some instances and indirectly in others

1. The Crown, it was stated, proposed to seek an inference from the jury that Mr Joffe came into possession of the information and that it was not just a coincidence that Mr Stromer commenced to trade on the first trading day after Moody's last meeting with RIN, as discussed above.
2. The Crown contended that Mr Joffe had no reason to be monitoring the RIN CommSec website on the afternoon that Moody's received a draft presentation setting out RIN's proposed strategies. The Crown relied on telephone calls between Mr Joffe and Mr Stromer on the evenings of 17, 18 and 19 January 2007. It also asserted that Mr Stromer was continuing to amass cash in preparation for his proposed purchases of RIN. Mr McHugh relied upon his oral submissions at t.106.18 to t.107.18.
3. Mr Joffe also relied on the absence of evidence of information given to him. As to Mr Fullerton and Mr Brown:- Mr Fullerton - Exhibit 3, Tab 23, p.215 - there was no reference to providing information to Mr Joffe. Mr Brown - Exhibit 3, Tab 23, p.225 - transcript of examination - Mr Brown said he was certain he did not tell Mr Joffe about RIN's third quarterly results which would be released on 30 January 2007.
4. The contention then was, there was no evidence in support of the proposition Mr Joffe was aware of the information (t.107).

Table B: Related events not the subject of counts in the indictment

Facts: PBL

1. A meeting took place in the offices of PBL, Park Street, Sydney on Wednesday 11 October 2006. Those present at the meeting included Mr Fullerton and Mr Brown and Ms Sarroff of PBL. The purpose of the meeting was to discuss a publicly announced joint venture involving PBL.
2. Ms Sarroff raised a question as to the need for a conference in order to obtain details about a transaction that would be likely to be announced the following week. There was no other information provided at that meeting.
3. Ms Sarroff became treasurer of PBL in 1994. Her responsibilities included dealing with credit agencies such as Moody's in relation to issues such as debt raising and debt rating exposures.
4. As discussed below, the Crown relies on evidence of an alleged communication between Mr Stromer and Mr Joffe on a number of occasions on Thursday 12 October 2006 and the transfer by Mr Stromer on that date of $30,000 from his account with CMC Markets.

(1) - Moody's received information from three entities not the subject of charges, being confidential information

1. The Crown relied upon evidence concerning the meeting of 11 October 2006 and emails circulating on Friday 13 October at Moody's concerning a proposed PBL meeting on 17 October 2006.
2. In response, it was contended on behalf of Mr Joffe that the information was not material. Reference was made to Ms Sarroff's evidence that she did not remember referring to a transaction and, if she did, it would have been a reference to a proposed transaction. Mr Brown did not recall Ms Sarroff making such a statement. The extent of the confidential information was that PBL had organised a meeting with Moody's. Moody's had many meetings with PBL. Mr Fullerton's evidence was that he did not know or suspect that the proposed transaction to be discussed with Ms Sarroff the following week related to PBL's media interests.
3. In response, in MFI 2, the Crown acknowledged that the information was not material. It was said to be material for the purpose of the charge. It was information provided to Moody's which had not been provided to the market. The Crown case is that it stimulated Mr Joffe's interest, taken together with market speculation that PBL was planning some activity which was likely to affect its share price. The Crown contention was that it was enough for Mr Joffe and Mr Stromer to prepare to implement their scheme whereby Mr Joffe would pass information to Mr Stromer and procure him to trade as it claimed was the case in the 10 charged matters. The Crown contended that there was a deal of "internet traffic" within Moody's concerning the proposed meeting with PBL.

(2) - Joffe was in direct receipt of the inside information in some instances and indirectly in others

1. The Crown contended that Mr Joffe was told the effect of the information by 10.07 am on 13 October 2006 at which point he accessed the CommSec internet site for PBL.
2. Mr Joffe was not told the effect of the information by Mr Brown or Mr Fullerton from Moody's, who, it was contended, were all appraised of the information at the meeting with PBL representatives on the afternoon of 11 October 2006 and subsequent received emails regarding the conference.
3. In response on behalf of Mr Joffe, it was stated that the viewing of a CommSec internet site does not show receipt of inside information.
4. There was no evidence that Mr Joffe was in possession of the information directly or indirectly. There was no evidence from either Mr Brown or Mr Fullerton that they communicated any information in relation to PBL to Mr Joffe.
5. In MFI 2, the Crown's response was that this was consistent with Mr Joffe's activity in relation to the charged matters where, it was contended, he monitored share prices after the receipt of information by Moody's and where he allegedly passed information on to Mr Stromer and allegedly procured him to trade. The Crown contends that it is consistent with Mr Joffe's alleged interest in the up-coming meeting with PBL.

Event 37: (3) - Joffe and Stromer communicated by telephone, by which means Joffe communicated the confidential information to Stromer, thereby procuring Stromer to trade whilst in possession of the confidential information

1. In relation to Event 37, the Crown contended that, after becoming aware of the information on 13 October 2006, Mr Joffe had telephone contact with Mr Stromer on five occasions before 11.13 pm on 16 October 2006.
2. In response, it was stated on behalf of Mr Joffe, that there was no evidence of the communication of the information. The five calls were all outside work hours and on the weekend. Mr Joffe had become aware of the information by 10.07 am on Friday 13 October 2006, but there was no telephone call from him after 10.07 am on that day. Reliance was placed on the general submissions made in relation to the conversations between Mr Joffe and Mr Stromer. It was also stated that there was no evidence of procuring.
3. The Crown, in reply in MFI 2, stated that Mr Stromer allegedly communicated with Mr Joffe at 12.20 pm within four minutes of making his purchase (between 12.13 pm and 12.16 pm). In that respect, reference was made to paragraphs 596 and 597 of the Amended Statement of Facts.

(4) - Stromer traded in or otherwise acquired a share in the entities whilst in possession of the confidential information

1. The Crown relied on evidence that on 16 October 2006, Mr Stromer acquired 12,125 PBL CFDs.
2. In response, on behalf of Mr Joffe, it was said that there was no evidence that Mr Stromer was in possession of the information and that he had explained his reasons for acquiring PBL CFDs. Reference was made to the considerable speculation in the press and amongst broking analysts surrounding changes to Australian cross media ownership rules. It was expected that changes would ignite merger and takeover activity in the sector.
3. On 16 October 2006, PBL issued an announcement to the ASX in response to the media speculation. This caused a surge in the price and volume of PBL securities. Mr Stromer acquired CFDs within three hours following PBL's ASX announcement. Moody's only became aware that the transaction involved PBL media interests at the meeting on 17 October 2006.
4. In the Crown's response in MFI 2, it was stated that Mr Stromer's explanations for his purchases are not material at this time. They seek to explain the circumstances and were said to be beyond consideration.

(5) - An announcement is made to the market or an event that occurs that pre-empts the transaction

1. The Crown relied on the public announcement on 18 October 2006 by PBL that they were recapitalising certain of its media assets, along the lines of the information provided to Moody's at the previous day's meeting.

(6) - Stromer traded out of his position following an announcement or Moody's being advised of the transaction not going ahead

1. The Crown relied on evidence that on 20 October 2006, Mr Stromer closed out his PBL CFD position. In response, on behalf of Mr Joffe, it was said that, on 20 October 2006 at 3.26 pm, Mr Joffe said in an email to Mr Brown "PBL is flying mate". At 3.27 pm, Mr Brown responded, "There is no stopping it now. 21C up ... from 60c down earlier". Mr Joffe at 3.38 pm replied, "Will hit $21 soon". This was said to be contrary to Mr Stromer exiting his position at 2.32 pm that day at an average price of $19.93.
2. In MFI 2, the Crown's response was that the fact that PBL "is flying" at approximately 3.30 pm on 20 October 2006 and that Mr Joffe thought that it would continue to go up, is not "contrary to Stromer exiting his position at 2.32 pm". The Crown stated that two days had passed since the relevant announcement when the immediate market reaction had passed, suggesting that the price was towards the top end of the likely gains. It was further said that it was 60 cents down earlier in the day so exiting with a modest gain made sense. The Crown also stated that the subsequent emails between Mr Joffe and Mr Brown suggest that the sudden price rise in PBL was totally unexpected (by them at least). Therefore there should have been no reason for Mr Stromer to maintain his position once the price moved from a loss to a modest gain.
3. In oral submissions, Mr McHugh stated that, if the Crown theory is a joint enterprise and that Mr Joffe's view was as recorded in the emails, then it is difficult to see why Mr Stromer sold out on 20 October 2006 at less than $50, to be sold at $19.93 and $19.96. If Mr Joffe thought that the stock was going to keep going up and hit $21, then, if they were "in it together" and this was Mr Joffe's view that the stock was going to keep rising and that Mr Stromer had taken a long position, then why would Mr Stromer sell at $19.93. It was submitted that it was certainly not consistent with the Crown theory.

(7) - Joffe maintained significant surveillance of the share price, usually on CommSec, throughout the material time

1. The Crown relied on evidence said to establish that between 13 and 20 October 2006, Mr Joffe visited websites relating to PBL on 29 occasions.
2. In response, it was stated that Mr Joffe visited CommSec internet websites in relation to PBL on 13 occasions between 13 and 20 October 2006. Six websites were graphs of the historical price of PBL shares. Seven websites were graphs of historical price of PBL warrants. Mr Stromer acquired PBL CFDs. None of the websites visited by Mr Joffe related to PBL CFDs. In respect of Mr Joffe's share price surveillance, the earlier submissions on such surveillance were relied on.
3. In MFI 2, the Crown replied that the share price is relevant to the value of CFDs.

Facts: DOW

1. This matter relates to a consortium which included, amongst others, DOW.
2. In October 2006, the Moody's senior analyst was Mr Chong. The matter related to a credit rating in respect of a revised tender bid by RRC to construct a large number of railway carriages for RailCorp. The consortium comprised, in addition to DOW, ABN AMRO and B&B. Mr Joffe, at the time, was an associate analyst on this credit.
3. On 4 October 2006, Mr Chong received an email from Mr Smith at B&B informing him that RRC had been invited to revise its bid for the NSW Government's Rolling Stock Public Private Partnership to supply new carriages for the CityRail network.
4. On 5 October 2006, Mr Chong forwarded the email to Mr Joffe.
5. Mr Chong and Mr Joffe received information about the RRC bid from Mr Smith on a number of occasions, 6, 9, 10 and 13 October 2006.
6. The Crown relies on evidence that on 25 October 2006, Mr Joffe accessed CommSec websites relating to DOW on seven occasions.
7. The Crown also relies on evidence to establish that on 25 October 2006, Mr Joffe and Mr Stromer made contact by telephone on four occasions.
8. The Crown further relies upon evidence to establish that between 3.41 pm and 3.43 pm, Mr Stromer acquired 5,000 DOW CFDs through CMC Markets and between 3.44 pm and 3.56 pm, he acquired a further 29,000 DOW CFDs through CMC Markets.
9. The Crown also points to evidence that Mr Stromer sent two text messages to Mr Joffe after the trading was completed at 4.10 pm and 4.11 pm.
10. Evidence that Mr Joffe thereafter visited six websites relating to DOW on that day and evidence that Mr Joffe and Mr Stromer spoke to each other by telephone that evening is also said by the Crown to be significant.
11. On 26 October 2006 at 3.36 pm, Mr Stromer disposed of his holding of DOW CFDs said to have finished with a modest lost.

Event 12: (1) - Moody's received information from three entities not the subject of charges, being confidential information

1. The Crown, as noted above, points to the above events said to have occurred on 4 and 5 October 2006 and the receipt of further information on 6,9,10 and 13 October 2008
2. In response, it was contended for Mr Joffe that the information was publicly available and not material. The extent of the confidential information was that RRC had been invited to revise its bid to the NSW Government. The RRC consisted of a number of "partners".
3. The Crown responded in MFI 2 that it is not intended that the information was material.
4. In other submissions, Mr McHugh emphasised that the information was not inside information but that could not be upon the basis that the information was already public because the Crown claimed the information was confidential. The only remaining basis, it was submitted, must be on the ground that the information was not such as to induce a person to trade. On that assumption, the premises upon which the Crown proceeded in relation to this information was said to be "irrational" in the sense that it was irrational to have any theory that a person is trading on information that was not material to trade (t.110).
5. The non-charge matters were said to be of assistance to the defence insofar as they were consistent with a pattern of Mr Stromer trading "under his own sail". The submission was that whatever the explanation was for the trades, they had nothing to do with Mr Joffe and the whole Crown case turned on a pattern. These matters undermined the pattern.
6. Additionally, reliance was placed on the fact that Mr Stromer did not trade until 25 October 2006 and, therefore, it was difficult to see a connection with the information.
7. In relation to the email of 4 October 2006, it was stated that its terms indicated that each of the bidders had been asked to revise the bid and that this was plainly information that was not material. As with PBL, it was submitted that, if the information was not material and would not induce somebody to trade, then it was irrational to suggest, by any process of inference, that it must have been communicated by Mr Joffe to Mr Stromer (t.115).

Event 25: (2) - Joffe was in direct receipt of the information in some instances and indirectly in others

1. The Crown contended that Mr Joffe was a direct recipient of the information via the emails referred to, received on 5, 6, 9, 10 and 13 October 2006.

Event 38: (3) - Joffe and Stromer communicated by telephone, by which means Joffe communicated the inside information to Stromer, thereby procuring Stromer to trade whilst in possession of the inside information

1. In relation to Event 38, the Crown relied on evidence that between 18 October 2006 and 3.37 pm on 25 October 2006, Mr Joffe and Mr Stromer spoke by telephone on 23 occasions and exchanged four text messages, including occasions on the day of 25 October 2006 prior to Mr Stromer commencing trading.
2. In response on behalf of Mr Joffe, it was stated that there was no evidence of the communication of the "information". According to prosecution statements for Events 12 and 25, Mr Joffe received the information on 5 October 2006, yet the prosecution only referred to calls between 18 to 25 October 2006. Reliance was placed on other submissions made on the question of communications between Mr Stromer and Mr Joffe. It was also stated that there was no evidence of "procuring".
3. In MFI 2, the Crown drew attention to paragraphs 608 and 609 of the Amended Statement of Facts and to the closeness in time between Mr Stromer's purchases and his communications with Mr Joffe. The Crown contended there were telecommunications between the two accused at 12.05 pm for 4.30 minutes (Mr Joffe to Mr Stromer) and 1.13 pm for 1.30 minutes (Mr Stromer to Mr Joffe) and text messages from Mr Stromer to Mr Joffe at 2.45 pm and 3.37 pm. Mr Stromer acquired, as noted above, 5,000 DOW CFDs between 3.41 pm and 3.43 pm and then 29,000 CFDs between 3.44 pm and 3.56 pm.
4. The Crown also relied on evidence to establish that Mr Stromer then sent two text messages to Mr Joffe following completion of his trading at 4.10 pm and 4.11 pm. The Crown contention was that it was likely that Mr Joffe himself sent text messages to Mr Stromer, given the closeness in proximity of Mr Stromer's text messages to him. Meanwhile, the Crown contended, Mr Joffe visited six websites relating to DOW between 4.11 pm and 5.44 pm.
5. In Mr Joffe's submissions in reply (paragraph 79), it was stated that, having regard to the overall extent of telephone communications between the two men and the overall extent of CommSec searches, it was submitted that it is unremarkable that the Crown is able to identify telephone calls, CommSec entries within hours of trading by Mr Stromer.

Event 51: (4) - Stromer traded in the entities whilst in possession of the inside information

1. The Crown relied on Mr Stromer's acquisition of 34,000 DOW CFDs.
2. In response, it was stated that 25 October 2006 is 20 days after Mr Joffe is alleged to have received the information and there was considerable speculation in the press before 25 October 2006 that DOW was a takeover target. Further, Mr Stromer had explained his reasons for acquiring the CFDs.
3. In MFI 2, the Crown stated that it relied upon the timing of telecommunications between the two accused and the purchases by Mr Stromer and the timing and number of DOW website visits by Mr Joffe.
4. In the reply on behalf of Mr Joffe, reliance was placed on oral submissions at t.115.23 to t.115.44.
5. Reliance was again placed on the fact that 20 days elapsed after Mr Joffe allegedly acquired the information.
6. Additionally, it was said that there was a perfectly rational explanation for Mr Stromer's trading. Reference was made to articles behind Tab 51 in Exhibit 3. At p.411 is a copy of an article in the Australian Financial Review dated 19 October 2006 referring to takeover rumours concerning DOW. A further article referred to in the Financial Review on the same date spoke of "talk" concerning a Macquarie Bank led break-up of DOW.
7. The submission was it was easy to see why Mr Stromer would take the position he did.
8. In relation to Event 64, it was noted on behalf of Mr Joffe that the RRC had been awarded a tender by the NSW Government on 9 November 2006, that is well after Mr Stromer's trading.
9. It was stated there was no suggestion that Moody's had any inside information concerning whether the RRC would be selected as the successful tenderer. No bid for DOW eventuated. Mr Stromer sold long before the awarding of the tender.
10. There was no response in MFI 2 by the Crown to this event. It was submitted for Mr Joffe that this would be because there was no material on which the Crown could link this event to some kind of announcement (t.115).

Event 77: (6) - Stromer traded out of his position following an announcement or Moody's being advised of the transaction not going ahead

1. The Crown in this respect referred to the fact that on the afternoon of 26 October 2006 Mr Stromer closed out his DOW CFD position.
2. In response on behalf of Mr Joffe it was noted that this was two weeks before 9 November 2006 when the NSW Government announced that the RRC was the successful tenderer.
3. Reliance was placed upon the matters raised in oral submissions on behalf of Mr Joffe at t.116.01 to t.117.02 to which the Crown did not provide a response. Reference was there made to Mr Stromer's trading account with CMC Markets. Particular attention was drawn to the trading pattern on 25 and 26 October 2006 which revealed Mr Stromer altering or reversing his position as to whether he acquired short CFDs or long CFDs. The submission was that he closed out in a space of two days and at different times his position was both long and short and it was difficult to make that referrable to anything and it was not referrable to Mr Joffe's information.

Event 90: (7) - Joffe maintained significant surveillance of the share price, usually on CommSec throughout the material time.

1. The Crown relied upon the visits by Mr Joffe between 18 and 26 October 2006 relating to DOW on 52 occasions.
2. In response on behalf of Mr Joffe, it was said that, according to CommSec URL history, Mr Joffe viewed 5,020 CommSec URL searches in this period. Those that related to DOW account for approximately one percent. Mr Joffe also visited websites related to DOW outside the period. None of the websites visited by Mr Joffe were said to be related to DOW CFDs. Reliance was placed on other submissions made on the question of price surveillance by Mr Joffe.
3. In MFI 2, the Crown contended that the full record of URL records extracted by ASIC officers revealed DOW searches conducted by Mr Joffe as follows: August 2006 - three occasions, October 2006 - 49 occasions (including 47 occasions between 25 and 27 October 2006), November 2006 - two occasions and January 2007 - two occasions.
4. In reply, Mr Joffe relied on oral submissions made at t.117.04 to t.117.14.
5. It was there stated again that there had been a lot of speculation in the press about the takeovers for DOW. Also, the information revealed that Mr Joffe was capable of spending a good amount of time checking stocks, even where it had nothing to do with inside information and there was apparently nothing otherwise connected with this work.

Facts: APA

1. The Crown contends the evidence establishes that Moody's acquired confidential information in connection with APA in the course of Mr Atkins carrying out his duties as an employee of Moody's at about 3.27 pm on Friday 10 November 2006.
2. The information was said to be that Alinta proposed to announce a bid to acquire all the issued securities of APA soon after it had bid for AIHCA.
3. The Crown relied on the fact that Mr Joffe and Mr Stromer telephoned each other twice that same day subsequent to the information being received by Mr Atkins.
4. The Crown also claims that the evidence establishes that Mr Joffe viewed the CommSec website relating to APA at 4.01 pm and 4.05 pm that afternoon.
5. On 13 and 14 November 2006, Mr Stromer acquired AIHCA CFDs through CMC Markets prior to the announcement of the AIHCA and sold those CFDs on 15 November 2006 after the bid had been announced.
6. Further, the Crown relies on the acquisition on Tuesday 21 November 2006 by Mr Stromer of 23,750 APA units through UBS.
7. It also relies upon the fact that Mr Joffe and Mr Stromer were said to have spoken that evening and that Mr Joffe allegedly viewed the CommSec website relating to APA 69 times over the following three days.
8. On Wednesday 29 November 2006, Mr Stromer sold his APA units. At the time of the sale, it is said that Mr Stromer was making arrangements to acquire securities relating to SRG.
9. Mr Stromer suffered a loss of $969.88.

Event 13: (1) - Moody's received information from three entities not the subject of charges, being confidential information

1. As noted above, the Crown relied on the fact that Moody's acquired inside information in the course of Mr Atkins carrying out his duties as an employee of Moody's on Friday 10 November 2006. The information was that Alinta proposed to announce a bid to acquire all the issued securities of APA soon after it had bid for AIHCA.
2. In response, on behalf of Mr Joffe, it was stated that the information was not material. The proposed bid price ($4.35) was significantly below the closing price of APA on 10 November 2006 ($4.56). There was no proposed time by which the bid was to be made. No bid eventuated.
3. In response, the Crown stated that the materiality of the information was not alleged. The dealing with APA was intertwined with the evidence relating to the dealing in AIHCA.
4. In the submissions in reply, reliance was placed on the oral submissions at t.110.01 to t.111.11, t.117.16 to t.117.30

Event 26: (2) - Joffe was in direct receipt of the information in some instances and indirectly in others.

1. The Crown relied on evidence to establish that Mr Joffe was allegedly told the effect of the inside information by 3.36 pm on Friday 10 November 2006 when he accessed the CommSec internet site for AIHCA.
2. Mr Joffe was told the effect of the inside information by Mr Atkins who, in turn, it was said had been apprised of the inside information during a call with Mr de Loub from Alinta on that day.
3. In response, it was stated that there was no evidence that Mr Joffe was in receipt of the information directly or indirectly. Accessing the CommSec URL relating to AIHCA was not evidence that showed that Mr Joffe was in receipt of information relating to APA. Mr Atkins' evidence was that he did not tell Mr Joffe the information.
4. The Crown relied upon its submissions concerning AIHCA. The relevant information, it was said, came to Moody's on Friday 10 November 2006. The trading in AIHCA commenced the following Monday 13 November 2006 and continued on 14 November 2006 prior to the announcement of the AIHCA bid.
5. The Crown contends there is an inference that Mr Stromer's trading in APA was related to his trading in AIHCA. Reliance was placed in this regard to his conversation with Ms Sally Pintaric at paragraph 621 of the Amended Statement of Facts.
6. The Crown contended the evidence establishes that Mr Stromer's first instruction to buy APA was given not long after his conversation with Mr Joffe and that the two accused spoke on the evening of Mr Stromer's last purchases on 21 November 2006.
7. In reply, Mr Joffe relied upon submissions made in relation to Event 13. It was noted that the Crown sought an inference that the trading in APA was "related to" trading in AIHCA. It is stated that it was unclear what was meant by that phrase. Nevertheless, the inference could not, it was contended, arise, given the apparent unchallenged submissions as to "utility" referred to in the submissions in reply.

Event 39: (3) - Joffe and Stromer communicated by telephone, by which means Joffe communicated confidential information to Stromer thereby procuring Stromer to trade whilst in possession of the confidential information.

1. In relation to Event 39, the Crown relied upon evidence to establish Mr Joffe spoke to Mr Stromer by telephone at 3.38 pm and 7.38 pm on 10 November 2006.
2. Between that time and 3.08 pm on 21 November 2006, they spoke a further 46 times by telephone and exchanged three text messages.
3. In response, it was stated there was no evidence of the communication of information by Mr Joffe to Mr Stromer.
4. Reference was made to five of the previous Friday afternoons in which there had been telephone contact between the two accused and on 18 of the 22 Fridays in the period 1 September 2006 to 31 January 2007.
5. In MFI 2, the Crown stated that this was an attempt to explain circumstances in a neutral way. The fact of the circumstances taken with other circumstances, the Crown contended, is what ought to be at issue at this time, not any competing explanations for the circumstances.

Event 52: (4) - Stromer traded in or otherwise acquired share in the entities whilst in possession of the confidential information

1. The Crown relied upon Mr Stromer's acquisition of 23,750 APA units on Tuesday 21 November 2006.
2. In response, Mr Joffe referred to the 11‑day gap from when information came to Moody's and when Mr Stromer traded in APA units. He had explained his reasons for acquiring APA CFDs. Five days before he traded on 16 November 2006, APA announced a two for seven renounceable rights issue of 94.9 million shares to raise $356,000,000.
3. The shares were said to be offered at an issue price of $3.75, a 17% discount to the closing price of APA shares on 15 November 2006. The offer was open until 5.00 pm on 24 November 2006.

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: 26 July 2016