R v Wu

District Court of NSW|2021-05-06

Introduction

The offender stands to be sentenced in relation to two State offences and one Commonwealth offence. The State offences are two offences of dishonestly obtain a financial advantage by deception, which I will refer to as fraud offences.
The particulars of the first such charge, being sequence 28 are: that between 13 November 2012 and 3 December 2012 the offender by a deception, namely being dishonest and misleading about his financial circumstances, dishonestly obtained a financial advantage.
The particulars of the second such charge, being sequence 30, are as follows: Between 2 June 2015 and 9 November 2015 the offender by deception, namely being dishonest and misleading about his financial circumstances, dishonestly obtained a financial advantage.
Those two offences are offences are under s 192E(1) of the New South Wales Crimes Act and have a maximum penalty of ten years imprisonment and there is no applicable standard non-parole period.
The Commonwealth offence is an offence under s 1041A of the Corporations Act, commonly referred as a market manipulation offence. The particulars of that offence are that between 8 September 2015 and 30 November 2015 the offender carried out multiple transactions that created an artificial price for trading in a financial product, namely shares in Traditional Therapy Clinics Limited. That offence carries a maximum penalty of ten years imprisonment or a fine of 4,500 penalty units.
In relation to the state offences the offender is to be sentenced in accordance with the sentencing regime that applies to state offences. In relation to the market manipulation offence, being a Commonwealth offence, the offender is to be sentenced in accordance with Part 1B of the Commonwealth Crimes Act.

Fraud offences

In April 2012 the offender commenced an application to purchase from Landcom a house and land package in a new housing estate called The Ponds New South Wales. He paid a 5%holding deposit of $24, 500 to reserve the purchase in a particularised lot, which I will refer to as The Ponds property. The total price was $490,000. On 8 October 2012 the offender received a letter confirming that the expected settlement of The Ponds property was early to mid-December 2012.
On 13 November 2012 the offender went to an office of the Commonwealth Bank of Australia where he met with a personal lending manager about a home loan of approximately $390,000 to finance the purchase of The Ponds property. At that meeting the offender produced a number of documents in support of his loan application, those documents included the following: 1. A forged statement for a Westpac Choice account, which was a joint account but which was shown as an account solely in the offender's name for the period between 31 May and 31 October 2012. The offender had altered the Westpac Bank statement in the following respects: The period of the statement had been altered from 31 January to 31 July 2012; the account information had been altered to indicate that the offender was the sole account holder when in fact he held the account jointly with Ms Yang, the offender's wife; the statement provided to the bank a closing balance the $40,778.43 as at 31 October 2012, whereas as at that date the true balance of the account was $41.24; debit and credit transactions had been removed from the statement. 2. A forged statement from a Bank of New Zealand account in the offender's name dated 31 October 2012, bearing a justice of the peace certification dated 1 November 2012. The offender had altered the original of that statement in the following respects. The statement date was changed from 5 October 2012 to 31 October 2012. The account balance was increased from NZ$2 to NZ$265,865.86. The justice of the peace certification had been falsely copied onto the document.
At the meeting with the Commonwealth Bank of Australia lending manager the offender told him his status was single with no dependents. The offender also did not disclose in his application that he also held a Bank of New Zealand Global Plus Visa Credit account in his name with a credit limit of NZ$26,000 and an outstanding debit balance of NZ$11,133.10 as at 5 November 2021.
After the meeting with the Commonwealth Bank of Australia lending manager a loan of $390,000 was approved, secured by The Ponds property based on the following information: That the offender had available funds amounting to $194,417.45 in a Bank of New Zealand account and $40,778.43 in a Westpac account; had liabilities of $102.87 on a Westpac credit card with a limit of $35,000; that the offender was single with no dependents; and that he was employed at Woolworths for a period of four years and ten months with an annual income of $91,800.02. The offender was married at the time of the loan application, however his wife lived overseas and was not financially dependent upon him.
On 21 November 2012 the offender attended the Commonwealth Bank of Australia and accepted the terms of the loan and the loan was subsequently approved. The offender's purchase of The Ponds property settled on 3 December 2012, the home loan was repaid on 26 May 2017 with no defaults on any of the repayments.
Turning then to the 2015 fraud offence. On 25 May 2014 the offender entered into a contract to purchase land at a new residential housing estate in Colebee, the Colebee property, for $519,000. He paid a 5% holding deposit of $25,950. On 23 June 2015 the offender attended the Commonwealth Bank of Australia in relation to a loan application concerning the purchase of the Colebee property. At the time the offender was married to Ms Yang with one dependent child. Based on the information and documents provided by the offender the Commonwealth Bank of Australia pre-approved him for a loan to purchase the Colebee property. No funds were advanced under the bank's pre-approval.
On 27 February 2015 the offender ceased his employment at Woolworths to take employment at Traditional Therapy Clinics Limited, TTC as I will refer to it in these remarks, at a significantly higher salary.
On 2 June 2015 the Commonwealth Bank of Australia telephoned the offender to ask about the progress of his purchase of the Colebee property. He advised the Commonwealth Bank of Australia that settlement had been delayed until mid-October 2015 and he was asked to update his financial circumstances. He confirmed that he was single with no dependents. After that phone call a new loan application was opened.
The next day the offender emailed the Commonwealth Bank the following documents in support of the application: A false document purporting to be page 1 of a statement for a Westpac eSaver account in the name of the offender for the period 29 August 2014 and 27 February 2015, and recording a closing balance of $2,006.46, the offender had altered that document to indicate he was the sole account holder and signatory when it was in fact his wife, Ms Yang; a false document which purported to be a Westpac Bank statement which purported to be for the period between 10 June and 10 December 2014, which recorded a closing balance of $85,080.30, the offender had altered that document to indicate he was the sole account holder and authorised signatory when it was in fact his wife, Ms Yang.
On the same day the Commonwealth Bank asked the offender for a copy of his most recent payslip. On 24 June 2015 the offender emailed a number of documents to the Commonwealth Bank, being a false document purporting to be a Woolworths pay slip for the period between 18 May and 31 May 2015, recording payment of $2,808.52 to the offender on 3 June 2015 and an annual salary $96,248. The payslip falsely indicated that the offender was employed by Woolworths during this period, as he had ceased his employment with Woolworths on 27 February 2015.
Based on the falsified documents and false information provided by the offender to the bank, the bank on 30 October 2015 approved a loan of $260,000 to the offender with the Colebee property being security for the loan. On 2 November 2015 the offender accepted the terms of the loan. On 9 November 2015 the purchase of the Colebee property settled. The home loan was repaid by the offender in full on 26 May 2017 with no defaults in any repayments.
The offender made admissions regarding the offences when questioned by authorities during a recorded interview and cooperated with requests and the investigation.

The market manipulation offence.

Traditional Therapy Clinics Limited, which as I said I will refer to as TTC, was registered as an Australian public company on 24 February 2015 and is the parent holding company of the TTC Group which includes wholly owned Chinese subsidiaries that conduct TTC's main business operations. The main operating company of the TTC Group in China is Fuqiao Chongqing Holdings Company Limited, which I will refer to as Fuqiao. TTC is a franchiser and owner of traditional health and wellness clinics in China, having over 330 franchise clinics, licensed under the Fuqiao brand, and approximately 19 owned and operated clinics as at February 2016. TTC claimed to be the largest chain of traditional therapeutic health and wellness clinics in China.
During the relevant period the board of TTC consisted of the following individuals: Andrew Sneddon, the chairman and non-executive director; Zhirong Hu, whom I will refer to as Ms Hu, the managing director and founding shareholder; Ms Hu is a Chinese national and who resided in China; Sanzheng Zhang, whom I will refer to as Mr Zhang, an executive director and chief executive officer, Mr Zhang is a Chinese national who resided in China. There were two other non-executive directors who were not Chinese nationals.
Between 1 March 2015 and 18 March 2016 the offender was employed at TTC as the chief financial officer. Prior to March 2015 he had worked for approximately five months as a part-time consultant of Fuqiao, assisting in setting up TTC for eventual incorporation in Australia and listing on the Australian Stock Exchange, the ASX.
On 12 June 2015 the offender accepted a long-term share incentive plan offer as part of TTC's employee share ownership plan. The offer related to a performance rights plan which entitled the offender to 1,050,000 performance rights issued in three separate tranches of 350,000 fully paid shares in TTC between 20 June 2018 and 30 June 2020. The vesting of the performance rights was subject to certain conditions being satisfied, including that the Value Weighted Average Price of TTC shares was greater than 50 cents during the performance period, being the period 31 August 2015 to the vesting dates in 2018, 2019 and 2020.
The offender was part of TTC's senior executive management team based in Australia and reported to the chairman and one of the non-executive directors. Being fluent in Mandarin he also facilitated communications between the company's Australian and Chinese directors and management team, and between the company and investors. The offender had played a key role in the capital raising by TTC prior to its ASX listing. He had travelled to China, Hong Kong, Singapore and major Australian cities and promoted TTC in roadshow presentations, given to potential Chinese and Australia investors, investment bankers and brokers.
The TTC's management team during the relevant period also included Ping Jian, Mr Jian, TTC's deputy chief executive officer, and Lisa Dalton, Ms Dalton, TTC's company secretary.
On 15 June 2015, Ms Hu transferred a number of shares in TTC representing 4% of the company's shareholding to the offender's mother, Xiaobei Haung. On 25 August 2015 the offender opened a share trading account in the name of his wife, Ms Yang, the Yang AUSIEX trading account. The offender carried out all transactions on that account.
In August 2015 TTC raised approximately $15 million through an initial public offering, issuing 30 million shares at 50 cents a share to 369 investors, 284 of which were Australian based, 84 of which were Chinese based, and one was from Singapore. The offender and his wife were each allotted 4,000 TTC shares in the IPO.
On 8 September 2015 TTC's shares were first quoted on the ASX and opened at 50 cents a share. At the time that TTC commenced trading the offender held a trading account in his name with Australian Investment Exchange Limited, AUSIEX, and he was the only person authorised to trade from that account.
As an employee of TTC the offender was subject to TTC's securities trading policy. TTC's trading policy permitted trading in TTC's securities during specified trading windows being; one month after release of the company's annual and half year results, one month after the holding of the annual general meeting and during an offer period under any publicly available prospectus. The TTC trading policy also required notification be given by employees to the company secretary of their intention to trade, followed by reporting of the details of the trade. No trading was permitted in TTC's securities by employees of TTC outside of the trading windows without prior written permission through the company secretary
On 8 September 2015 being the first date that TTC's securities were quoted on the ASX, at 3.51pm the offender placed a bid from the AUSIEX account in his name for 5,000 TTC shares at 50 cents. That trade did not cause a price impact. At 3.56pm TTC's share price fell to 48 cents. At 3.57pm the offender placed another bid from his AUSIEX account for 61,000 TTC shares at market price. 60,460 shares were immediately purchased which increased the value of TTC shares by 2 cents reflecting a price movement of 4.16%. The TTC share price closed at 48 cents.
Between 9.34pm and 9.40pm the offender exchanged WeChat messages with an unknown person regarding TTC share performance. In that exchange the offender said, "It will go up tomorrow". The other person in the exchange said, "Let me know if there is good news tomorrow so as to make the investors happy. The main thing is how to make the share price move brilliantly". On 10 September 2015 TTC's securities opened at 50 cents. At 3.28pm the last traded price of TTC fell from 50 cents to $0.485. At 3.59pm the offender entered a bid from his AUSIEX account for a thousand shares at market price which traded immediately. The order increased the share price by $0.015 reflecting a price movement of 3.1%. This was the last trade of the day.
On 11 September 2015 at 3.11pm the offender sent a WeChat message to Jason Yanqin, also known as Jason Zhang, the company secretary of Fuqiao in which he said, "I am supporting the market, learn the lesson of trying to buy and pull it to 0.55 in the last two minutes but whether it is because the time is too short the order is in but no tr ading. Closed at 0.505. Too early is not good and too late is also a problem. The bullets are limited. There is only the end market to pull. If there were enough bullets it wouldn't a problem. Very sorry".
At 3.58pm the offender entered a bid from the AUSIEX account in his name for 45,000 TTC shares at 55 cents. The shares at that time were trading at $0.505. The bid was rejected by AUSIEX on the basis of market integrity. The offender was contacted by Westpac in relation to trading from the AUSIEX account in his own name once Westpac realised that he was an employee of TTC and the offender subsequently ceased trading from that account.
On 12 September 2015 Ms Dalton sent an email to the TTC chairman, directors and management team which included the offender to remind them of their obligations under TTC's trading policy, including the requirement to seek prior clearance to trade in TTC's shares.
On 23 September 2015 in an email exchanged with the TTC chairman, Mr Sneddon, the offender said, "I will fly to Shanghai to catch up with Tina and Larry's investors on Friday. These investors are not happy with TTC's share price. They are familiar with volatile Chinese share market. I need to explain to them the difference between speculation and investment".
The reference to Tina and Larry in the offender's email were references to Ms Thy Huang and Larry Zhao of BBY China Pty Ltd, a financial services company that also introduced investors to TTC for the initial public offering.
On 25 September 2015 the offender started share trading in TTC shares from the AUSIEX account that was in his wife's name. At 3.45pm the offender placed a bid from the Yang AUSIEX account for a thousand TTC shares at 50 cents. The bid traded immediately and increased the share price by 2 cents reflecting a price movement of 4.2%.
On 1 October 2015 the market price of TTC shares dropped from 50 cents to 45 cents. At 3.56pm the offender placed a bid from the Yang AUSIEX account for 16,000 TTC shares at market price. Of the total bid 5,000 shares traded immediately at 47 cents and caused a price movement of 2 cents or 4.4%. At 3.59pm 10,000 shares of the outstanding bid traded at 48 cents and increased the share price by 1 cent, reflecting a price movement of 2.13%.
On 2 October 2015 at 12.01pm the price of TTC shares dropped from 48 cents to 45 cents. Between 3.54pm and 3.58pm the offender placed three bids from the Yang AUSIEX account at 48 cents that were rejected by AUSIEX on the basis of market integrity. At 3.58pm the offender placed a bid from the Yang AUSIEX account for 3,000 TTC shares at market price. The bid traded immediately at 48 cents and was the last trade of the day. It increased the TTC share price by 3 cents, reflecting a price movement of 6.6%.
On 5 October 2015 in a WeChat message to Ms Thy Huang between 1.03pm and 1.11pm the offender stated in relation to the share price, "there will be some movement [laugh] please communicate this to the investors".
On 8 October 2015 at 12.05pm Ms Hu sent a WeChat message to the offender stating, "It's only 45 cents now, it's no good". At 2.33pm the offender placed a bid from the Yang AUSIEX trading account for 6,200 TTC shares at market price. The bid traded partially for 6,000 shares at 48 cents and caused the price of TTC shares to increase by 3 cents, reflecting a price movement of 6.6%. The remaining 200 shares traded at 2.35pm at $0.485. This was the last trade of the day and increased the price of TTC shares by 5 cents or 1.04%.
On 12 October 2015 at 2.55pm the share price of TTC fell from $0.455 to 45 cents. At 3.15pm that day the offender placed a bid from the Yang AUSIEX account for 3,000 shares at market price. The bid traded immediately at $0.475 and increased the share price by $0.025 or 5.6%.
On 13 October 2015 between 10.26am and 10.44am in a WeChat message exchanged between the offender, Mr Yanqin, Ms Hu and Mr Zhang the offender stated, "It dropped to 45 cents again today. It is pressed by several big orders from above. I want to pull out bullets but not enough. How to maintain it in these two weeks before distributing dividend is an issue. I've also bought in over 100,000 shares."
On 19 October 2015 TTC shares opened at 42 cents. At 10.41am the offender placed a bid from the Yang AUSIEX account for 1,500 TTC shares at 47 cents. The bid traded immediately at that price and increased the share price by $0.055 or 13.25%.
On 20 October 2015 TTC shares opened at $0.415. At 11.38am Mr Yanqin sent a WeChat message to the offender stating, "Sister is getting anxious, it dropped to 40 cents again". Between 11.48am and 11.55am the offender placed three bids from the Yang AUSIEX account that were rejected by AUSIEX on the basis of market integrity. Between 12.15pm and 2.34pm the offender placed seven bids from the Wu AUSIEX account that was rejected by AUSIEX on the basis of market integrity. At 2.27pm the offender placed a bid from the Wu AUSIEX account that was rejected by AUSIEX on the basis of market integrity. Between 2.41 and 2.53pm the offender placed three bids from the Yang AUSIEX account that were rejected by AUSIEX on the basis of market integrity.
The offender contacted AUSIEX in that regard and was told that the orders had been rejected as they appeared to be intended to impact the share price of TTC and AUSIEX had concerns regarding his trading strategy. At the close of the market that day TTC shares traded at 42 cents.
At 8.19pm the offender sent an email to the chairman of TTC seeking approval to buy shares "to support our share price". On the same day the offender had a message exchange with Ms Thy Huang concerning the low share price and the concern of investors.
On 21 October 2015 at 6.53am the chairman of the board responded to the offender's request for permission to purchase shares, stating essentially that the market needed to be updated in relation to the company's results and a formal application gone through before the offender could buy shares in TTC.
On 21 October 2015 the offender took steps to open a trading account in the name of a friend in China. In a WeChat message exchanged with Mr Yanqin the offender stated, "My account is unable to use (frozen). Exposed. Bought too many times, too frequently (Tears). I bought more than ten times in a hurry yesterday, it was discovered by the watchdog".
On 23 October 2015 the offender took steps to open a trading and cash account with the Commonwealth Bank of Australia in the name of Zhenhua Ma.
On 26 October 2015 the offender opened three accounts including a CommSec share trading account in the name of Limei Luo, who I will refer to as Ms Luo.
On 26 and 27 October 2015 the offender engaged in communications Mr Yanqin, Ms Hu and Mr Zhang concerning trading the offender should engage in in order to support the TTC share price. On 2.52pm on 27 October 2015 the offender placed a bid from Ms Luo's CommSec trading account for 5,000 TTC shares. This bid caused the share price to increase $0.015 reflecting a price movement of 3.29%. After the market closed that day the offender sent a message to Ms Luo which stated in part, "Yes, buying them secretly, as soon as I hang the order I got a call from the broker asking whether I am a staff member saying that there will be suspicion of manipulating the share price at pulling it too high. Anyway I wasn't able to buy".
At 7.08pm Mr Zhang sent a WeChat message to the offender, Ms Hu and Mr Yanqin stating, "Okay! Maintain it at 45 cent tomorrow."
On 29 October 2015 at 10.01 the offender placed a bid from Ms Luo's account for 20,000 TTC shares which had the effect of increasing the last traded price from 45 cent to 46 cents reflecting a price movement of 2.2%. On 30 October 2015 at 10.34am the offender placed a bid for 68,000 TTC shares at 47 cents from Ms Luo's account. This bid caused the share price to increase 1 cent reflecting a price movement of 2.2.%. At 3.56pm the offender placed from Ms Luo's account a bid for 52,000 TTC shares at 48 cents. A trade arising from this bid caused the share price to increase a cent reflecting a price movement of 2.1%.
On 31 October 2015 Ms Dalton sent an email to the offender, advising that the circumstances were not such that he could trade under the company's trading policy.
At 10.11am on 2 November 2015 the offender placed a bid from Ms Luo's account to buy 8,000 TTC at 49 cents per share. The arising trade caused the price of the TTC shares to rise by 1 cent or 2.1%. At 10.15am the offender placed a bid from Ms Luo's account for 40,000 TTC shares at $0.495 per share. The resulting trade caused the share price of TTC to increase $0.005 or 1%. At 10.26am the offender placed a bid on Ms Luo's account for 20,000 TTC shares at the $0.465 per share, the offender cancelled that bid and replaced it with a new bid for the same amount of shares at 50 cents a share. The trading arising from this bid caused the share price of TTC to rise $0.05 or 1%. At 3.59pm the offender placed a bid from Ms Luo's account for 67,000 TTC shares at 51 cents per share. The trading arising from that bid caused the TTC share price to increase $0.015 reflecting a price movement of 3%.
TTC shares closed on 2 November 2015 at 51 cents. After the close in trading the offender sent a WeChat message to Ms Thy Huang and other persons stating, "closed 51 cents plus actual interim dividend, investors are making money".
On 3 November 2015 the offender began to take steps to open a share trading account for Mr Zenhau Ma. On 5 November 2015 the offender entered a bid from Ms Luo's account for 5,000 TTC shares at 51 cents. The resulting trading from this bid which was the last trading for the day caused the TTC share price to increase by 3 cents or 6.3%.
On 6 November 2015 the offender facilitated the opening of a trading account in Ms Luo's name with E-Trade.
On 8 November 2015 at 9.16pm the offender sent a WeChat message, "Now I have been back for a month from China and have turned the share price around and solved the conflict of divorce between the foreigner and the rich overseas Chinese. Share price 51 cents plus dividends 0.527. Everybody has made money".
At 12.09pm on 9 November 2015 the offender placed a bid from Ms Luo's account for 5,000 TTC shares at 51 cents. The bid was rejected by CommSec on the basis of price impact concerns.
At 2.20pm on 10 November 2015 the offender placed a bid from the Luo CommSec account for 5,000 TTC shares at 50 cents. The last traded price was 49 cents. The bid was rejected by CommSec on the basis of price impact concerns.
On 18 November 2015 the offender opened a CommSec trading account in the name of Mr Ma. On 25 November 2015 at 12.31pm the offender entered a bid from the Ma account to purchase 30,000 TTC shares at 65 cents. The resulting trade from that bid caused the share price of TTC to increase 1 cent reflecting a price movement of 1.6%.
At 10.30am on 26 November 2015 the offender entered a bid from the Ma account for 7 and a half thousand TTC shares at 66 cents. The resulting trade from that bid caused the price of the shares to increase by 1 cent or 1.5%. At 10.34am the offender entered a bid from the Ma account for 1,200 TTC shares at 66 cents per share. The resulting trade caused the share price to increase by $0.02 or 3.1%. At 12.15am the offender entered a bid from the Ma account for 1,000 TTC shares at 65 cents per share. The bid traded immediately and caused the price of TTC shares to increase by 1 cent or 1.6%.
At 12.19pm the offender entered a bid from the Ma account for a thousand TTC shares at $0.655 which also traded immediately and caused the price of TTC shares to increase by $0.005 or 0.8%. At 12.36 the offender entered a bid from Mr Ma's account for a thousand shares at 0.655, the bid immediately traded at that price and caused the price of TTC shares to increase by $0.005 to 80 cents. At 3.18pm the offender entered a bid from the Luo account for 1,200 TTC shares at $0.64 which did not impact upon the share price.
On 27 November 2015 at 11.08am the offender contacted CommSec purporting to be Mr Ma in relation to his difficulties in placing trades from the Ma account. The offender was told that CommSec would no longer allow any trades to occur on the Ma account that were above the last traded price and that he needed to place genuine bids into the market and not with the intention of moving the price at which shares traded.
On 30 November 2015 at 1pm the offender entered a bid from the Ma account for 10,000 TTC shares at 61 cents a share. The bid partially traded for 120 shares at 61 cents and 429 shares at $0.615. These trades caused the price of TTC shares to increase $0.005 or 0.8%. The remaining 9,451 shares were amended to a price of 62 cents at 1.01pm of which 3,178 shares partially traded at 62 cents. This trade caused the price of TTC shares to increase 1 cent or 1.6%. The balance of the bid was cancelled.
That afternoon the offender made two phone calls to CommSec, purporting to be Mr Ma in relation to his inability to trade. Later that day CommSec closed both the Ma and Luo CommSec trading accounts due to concerns in relation to trading on the accounts in TTC shares. On 2 December 2015 the offender phoned CommSec purporting to be Mr Ma to follow up on his previous enquiries about being locked out of the Ma CommSec trading account.
At some point a TTC internal investigation to trading in the company shares was commenced. On 5 February 2016 the offender provided a signed declaration to BDO Australia, TTC's auditor, regarding his remuneration and interest in TTC. The declaration failed to disclose any trading in TTC shares in the period following the initial public offer.
On 1 March 2016 TTC sought advice from its lawyers Baker and McKenzie in relation to the offender's trading and as to whether he was in breach of the company's trading policy. The advice was received by TTC on 9 March and inexplicably was provided to the offender.
On 11 March 2016 the company secretary, Ms Dalton, had a conversation with the offender in which he said words to the effect of "the trades were a mistake on my part I have told the Chinese management team about it". This was somewhat disingenuous as the Chinese management team were clearly involved in directing the offender to engage in many of the trades.
On 14 March 2016 the offender met with the chairman and one of the non-executive directors of TTC and said in part words to the effect of, "I felt pressure from the market and investors to support the share price". Later that day the offender sent an email in which he sought to justify his trading and said, disingenuously in my opinion, "I forgot to report to board to get the approval". Clearly the offender at all times knew he should have sought approval and did not seek it, because he knew he was not going to receive approval to engage in the share purchasing that he engaged in.
On 16 March 2016 ASIC executed a search warrant at The Ponds property and the offender was interviewed. In relation to the fraud offences the offender made admissions as to the altering of documents he supplied to the bank in support of his loan applications. In relation to the provision of a Woolworths payslip the offender said: "I think to keep it simple I have to continue to use my Woolworths payslip although I have a new job, with a better financial situation. And I manipulate the payslip Woolworths because I think it doesn't matter because my loan will get approved anyway".
In relation to the market manipulation offence the offender said: as chief financial officer of the company he considered it important that he was perceived to be supporting TTC by buying shares and was under pressure by the CEO and investors of TTC to be actively involved in the share market. He stated that Limei Luo was an investor in China for whom he had opened an account for the purposes of trading in TTC shares. He said he traded using the account according to the instructions he had received from Ms Luo. In relation to the trades conducted on the account in the name of Mr Ma, the offender said the trades he made using that account were in accordance with Mr Ma's instructions. The offender stated that he had provided funds for the trading done on the accounts of Ms Luo and Mr Ma and that they had each repaid some if not all of those funds. Although he had said records to support that statement will be forthcoming, none have been.
On 17 March 2016 the offender resigned from TTC. The offender was not charged until 29 April 2020, more than four years after the execution of the search warrant and his resignation from TTC. That delay is unexplained and I will return to the topic of delay later in these remarks.

Objective seriousness

I turn then to my assessment of the objective seriousness of the State fraud offences. Both loans to which the false documents provided by the offender related were secured over the two properties that they were used to purchase. Given the purchase price paid for those two properties and the amount of the respective loans, it appears that there was little by way of real risk that the lenders concerned would lose money as a consequence of the making of the loans. The offender tendered evidence to suggest that in fact the offender's financial position was similar to that revealed in the altered documentation which were submitted to the banks in relation to the loan applications.
The Crown did not really put that evidence and inference in dispute on sentence. For example as of the date of the 2015 fraud offence in which the offender submitted to the bank a Woolworths forged payslip, he was already employed as the CFO at TTC at a much higher salary. There was no default on either of the loan and they have all been repaid and no direct harm was caused to the banks concerned. The Crown did not assert that any of the objective aggravating factors in s 21A of the Crimes (Sentencing Procedure) Act were applicable here. I assess both State fraud offences as being towards the low end of the range of objective circumstances.
Turning then to the objective seriousness of the market manipulation offence. The provisions containing the market misconduct offences in the Corporations Act are said in the legislation to have the express objective of promoting: (a) confident and informed decision-making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; (b) fairness, honesty and professionalism by those who provide financial services; (c) fair, orderly and transparent markets for financial products; and (d) the reduction of systemic risk and the provision of fair and effective services by clearing and settlement facilities; and (e) the promotion of confident and informed decision-making by consumers of financial products.
President Allsop, as his Honour then was, in relation to this part of the Corporations Act in Joffe and Stromer v The Queen [2012] NSWCCA 277 said at para 34: "Chapter 7 of the Corporations Act is concerned with financial services and markets. The objects of the Chapter are described in s 760A and include, as a central element, the promotion of public confidence in the fairness and honesty of markets for financial products. An important feature of that promotion of confidence is the presence of criminal offences for recognised market misconduct...Confidence in the honesty and integrity of the financial markets is of the utmost importance in an economy and a society which depend significantly for their well-being on the efficient operation of such markets."
As discussed by the High Court in DPP v JM [2013] HCA 30 at [71]-[74] the prohibition in s 1041A of the Corporations Act is directed to ensuring that the price for financial products truly reflects the forces of supply and demand. As was said in that case: "Participants in the market are entitled to assume the transactions which are made, are made between genuine buyers and sellers and are not made for the purpose of setting or maintaining a particular price".
The Crown submitted the following matters were relevant to an assessment of the nature and circumstances of this type of offence, no doubt picking up the wording used in the relevant provision of the Commonwealth's Crimes Act: The complexity and sophistication of the offence; the level of planning and premeditation in the offence; the amount of money and number of transactions carried out; the length of the offending; the offender's motive; whether the transactions created an artificial price in fact; whether the offender knew as opposed to only being reckless as to the artificial price created; and any damage done to the market or individual victims.
I did not understand counsel for the offender to submit that those factors were not relevant to an assessment of the objective seriousness of such an offence. The application of those factors here and the conclusion to be drawn from them however was a matter of contest between the parties. The Crown submitted that the offence was one that fell in the middle of the range of objective seriousness. Counsel for the offender submitted that the objective seriousness of this offence fell towards the lower end of objective seriousness. I propose now to consider each of the factors on which the Crown submitted the assessment of the seriousness of the offence depends.
The offending occurred over a two and a half month period and involved 27 trades in TTC shares and 18 attempted trades in the company's shares. Six of the successful trades involved only one bid being entered into the market by the offender which was then filled by multiple trades. The movement in the share prices as a result of the offender's trading was relatively small compared with the market price of the shares as at the time of the relevant trade. The trades increased the share price in the range of 0.8% to 13.26%.
There was some complexity and obvious planning in the trading the offender engaged in. The offender commenced to trade in an account in his own name, although there is no evidence that he opened that account for the purpose of engaging in the trade. The offender conducted two trades on that account before trading was stopped by the trading platform concerned. The first trade the offender engaged in on the Yang account, being the account in his wife's name, occurred on 25 September 2015 which is after trading had been suspended from the AUSIEX account in his own name. There is no evidence to suggest that the Yang account was opened to facilitate the trading in TTC shares. The offender made eight successful trades from that account. A number of bids made by the offender on this account were rejected by the relevant trading platform AUSIEX for "market integrity" reasons.
The account in the name of Ms Luo was opened by the offender on 26 October 2015 which was after a number of bids on the Yang account had been rejected for "market integrity" reasons. The Luo account was established with the trading platform of the Commonwealth Bank of Australia, being CommSec. I am satisfied from the content of the WeChat messages sent by the offender and set out in the agreed facts about the fact trading in his and his wife's accounts had been suspended, that the offender established the account in Ms Luo's name so that he could continue to trade in TTC shares and attempt to distance himself from that trading.
The account in the name of Mr Ma was established by the offender with CommSec after CommSec had rejected two bids from the account in the name of Ms Luo on 9 and 10 November respectively due to price impact concerns. The account in the name of Mr Ma was established by the offender on 18 November 2015; trading on that account occurred on 23 November 2015, however the first trade to cause an impact on the price of TTC shares occurred on 25 November 2015.
I note that on occasions in relation to this account the offender represented to CommSec that he was in fact Mr Ma. The timing of the establishment of the account in the name of Mr Ma, in particular the account was established after bids from the account in the name of Ms Luo had been rejected by CommSec, together with the offender purporting to represent himself as Mr Ma in his dealings with CommSec in relation to the trading, satisfies me beyond reasonable doubt that the reason the offender established the account in the name of Mr Ma was to continue his trading in TTC shares and in an attempt to distance himself from that trading.
The WeChat conversations set out in the agreed facts also show that the offender was engaging in the trading in accordance in effect with the desires of members of the management team based in China and other persons interested in the TTC share price. This, together with the use of four trading accounts in the manner I have describe, leads to the conclusion that there was considerable planning behind the offender's trading and that there was a level of complexity to it. I would not describe the level of complexity as being high, even though four accounts were used. Clearly the trading engaged in was frequently detected by the relevant trading platform as being suspicious, in the sense of not being a genuine bid.
In terms of the offender's motive, the Crown submitted that the offender was motivated by three factors. He wished to keep the TTC share price above the IPO issue price of 50 cents, he was also said to be motivated by financial benefit he and his family members stood to make from TTC shares, although this was not ultimately achieved. It was also submitted that he was motivated by the praise he received from other people interested in the TTC share price and those involved in the company's business.
While the offender and his wife each held 4,000 shares in TTC and his mother had been gifted 4.9% of the shareholding and had the capacity to obtain a financial benefit from an increase in the share price, I do not consider that that was a substantial motivating factor here. Nor do I consider that the performance rights plan the offender had the benefit of was a motivation behind the offender's trading. In that regard I note the first vesting date was 2018, more than three years after the relevant trading.
A consideration of the WeChat message exchanges set out in the agreed facts establishes in my opinion that the offender was primarily motivated by a desire to keep the share price at or above the initial IPO price of 50 cents to appease the management team and others associated with TTC and to attract investors to the stock. This, it seems to me, is an overwhelming inference from the content of those messages and the timing of many of the trades. I note in that regard the Crown in its written submissions accepted that the WeChat messages showed that the offender was being encouraged, and in some cases directed, to trade in TTC shares.
I referred earlier to the fact that the trades engaged by the offender increased the share price in the range of 0.8% and 13.26%. Many of the trades were conducted at the end of the trading day which had an impact on the closing price for the shares on that day. There is clearly some distortion of the share price as a consequence of the offender's trading.
I am satisfied beyond reasonable doubt that over time the offender knew that his trading was having an impact on the share price. He was the chief financial officer of the company and had been involved prior to that time in assisting with having the company listed on the ASX and with preparing for the IPO. The content of a number of the WeChat messages sent by the offender showed that he understood that his trading was having an effect of maintaining or increasing the share price. He discusses this issue explicitly in a number of those WeChat messages. The offender had communications with persons attached to the relevant share platforms in which he was told that a number of trades had been rejected or blocked because of "market integrity" or "price impact" concerns. The offender knew that TTC's trading policy meant he was not able to trade without appropriate permission and he had been reminded of that policy during the course of his trading and permission to trade had been denied.
I think it is correct in the circumstances here to describe the offender's conduct, as the Crown did in its submissions, as being a "rather brazen campaign of price manipulation that he knew was wrong, illegal, and that it was creating an artificial price for TTC shares".
The Crown in its submissions accepted that there were no identifiable victims here and no evidence of any particular damage to the market beyond the changes in the price of TTC shares caused by the offender's trades. The Crown however drew attention to comments made by the Victoria Court of Appeal in DPP v Couper [2013] VSCA 72 at [105]: "It is tempting to consider financial crimes as wholly distinct from crimes involving physical violence or destruction of property, but crimes which impair the fair orderly and transparent conduct of financial markets carry with them a measure of criminal culpability, comparable to other more traditional offences, this is particularly so when the financial crime involves deceit and a fraud perpetrated not only on an identified class of individuals who purchased and sold BXP shares during the relevant times, but a fraud perpetrated on the general public who are entitled to rely upon the integrity of the market and the appropriate enforceability of the offences which the Commonwealth Parliament has created in relation to it."
The integrity of the market and the public's confidence in that integrity lie at the heart of the market related offences contained within the Corporations Act. Here, the offender's conduct undermined that integrity in that his trading activity during the period over which it occurred created the impression that shares in TTC were more valuable than the genuine forces of supply and demand indicated. I consider here having regard to the period of trading engaged in, the number of trades, the somewhat limited impact upon TTC's share price, the fact the offender occupied the position of chief financial officer of a publicly listed company, and that he clearly set out to manipulate the share price and knew that was the effect of his trading, that his offence falls a little below the mid-range of objective seriousness for such an offence.

The offender's subjective case

I will turn then to the offender's subjective case. The offender's date of birth is 3 July 1979, so he is currently 41 years of age. He was 33 as at the time of the first State fraud offences and 36 as at the time of the market manipulation offence. The offender has no prior criminal history and there are testimonials before me suggesting that he is otherwise a person of good character. While his criminal record entitles him to some leniency here the Crown in its submissions referred to a number of authorities which suggest that when sentencing for so-called white collar crimes, that such offending is rarely committed by people who do have a criminal history because such persons are unlikely to find themselves in a position to do so. I have regard to those authorities in determining what weight I should give to the fact that the offender is a person of good character in arriving at his sentence.

Documentary material

In terms of documentary material I have before me: a psychological report from Patrick Sheehan, forensic psychologist, dated 24 February 2021; a report from Dr Anthony Henderson, consultant forensic psychiatrist, dated 5 April 2021; a character reference from the offender's wife dated 29 April 2021; a character reference from the offender's friend Lisa Zhang dated 6 February 2021; a character reference from the offender's former colleague, Leo (Lu) Yu, dated 27 April 2021; a letter from the offender's mother dated 15 April 2021; a testimonial from a friend, Victor Jiang; and an affidavit sworn by the offender's solicitor. The offender did not give evidence on the sentence and I have had regard to that fact in determining what weight I should give to the contents of the subjective material.

Family background

In terms of his family background, according to the psychological report the offender was born and raised in the city of Suzhou, China. His father worked as a manager of a research institution and his mother operated an importation business. The offender denied any experiences of childhood trauma and was well cared for. The offender reported enjoying positive relationships with both parents. The offender further noted that his family was reputable and that he felt significant pressure from them to perform well in Australia.
The offender relocated to New Zealand at 21 years of age in 2000 and then to Australia in 2007. His father passed away in 2009. The offender obtained Australian citizenship in 2010/2011. Throughout the intervening years the offender frequently returned home and last visited China in 2020, however has been subsequently restricted due to the COVID-19 pandemic. According to the psychological report the offender has been married since 2008 and has a son with his wife, who is now six years old. The offender's wife remains supportive of him.

Education and employment history

In terms of education and employment history, the evidence before me is that the offender was a disciplined student and completed schooling in 1998. The offender subsequently entered a private preparatory school where he improved his English skills and undertook foundational studies to better prepare him for study abroad. As I mentioned a moment ago the offender relocated to New Zealand in 2000 and commenced a bachelor of business management degree majoring in accounting and information management in 2001, graduating in 2004. The offender completed a Masters of Commerce at the University of New South Wales in 2010/2011.
The offender described having a consistent employment history, he commenced work as an accountant in 2004, starting as a graduate accountant and progressing to a chartered accountant in 2008. The offender also worked as a business analyst and finance manager within several large corporations including Woolworths from 2011 to 2015 and in 2015 he of course accepted the role as chief financial officer at TTC.
Since the offences, the offender has struggled to maintain employment due to difficulties with his mental health subsequent to the charges. The offender reported to Dr Henderson that he has been financially supported by his mother who resides in China.

Substance use

There is no evidence of any history of using illicit substances and he does not consume alcohol.

Psychological/psychiatric history

In terms of the offender's psychological history the offender told Mr Sheehan that prior to 2015, being the commencement of his role at TTC, he had never experienced mental health problems, however the offender reported he felt very stressed in response to perceived conflicting demands of his role. This stress was heightened in March 2016 when the offender's home was "raided" by authorities as part of the ASIC investigation that led to the current charges. The offender reported having sleep disturbance, panic and anxiety, persistent and intrusive and distressing recollections of the events. The offender reported feeling shame, loss of identity and social exclusion as his social circle ostracised him after learning of the investigation. The offender reported feeling a loss of hope for the future and that there was "no point in living".
Mr Sheehan noted that the offender's coping mechanism was largely avoidance based, telling himself that the "nightmare would go away". The offender's stress and emotional disturbances were exacerbated after being officially charged with the current offences in April 2020. The psychological report notes that everyday became a struggle for him and his suicidal ideation became more pronounced. A character reference from his former colleague, Mr Yu, notes that since 2016 the offender seems to be "a different person".
The offender began to experience sensory disturbances of a psychotic nature, such as hearing derogatory voices telling him to die. The offender also reported noticing the number 4 around him, which he reported meant death in Chinese and signifying his future. The offender reported engaging in self‑harm behaviour, consisting of punching himself and hitting his head against a wall.
The offender's symptoms became acute on 1 October 2020 where he was referred to Blacktown Hospital and admitted as a voluntary patient overnight. A number of diagnoses were offered, including adjustment disorder, post-traumatic stress disorder and severe depressive episodes with psychotic symptoms. He was subsequently prescribed the antidepressant Mirtanzapine. On 8 October 2020 his GP referred the offender to a psychologist, Mr Ian Rumsey, who has provided fortnightly telehealth consultations since that time.
Mr Sheehan offered a formal diagnosis of adjustment disorder with mixed anxiety and depression. The psychological report further noted that there is evidence of some stabilisation, secondary to psychopharmacological and psychotherapeutic support but that "his mental disorder has not resolved." Mr Sheehan concluded that he regards the offender's current mental stability as "tenuous".
Dr Henderson expressed the opinion that the delay in the finalisation of the matter has had a significant impact on the offender, whom he said had developed an adjustment disorder with depressed and anxious mood following the initial investigation. Dr Henderson considered that the offender's mental state had significantly deteriorated due to the delay. Dr Henderson offered a formal diagnosis of major depressive disorder which he believed followed on from an initial period of experiencing symptoms of adjustment disorder. Dr Henderson also expressed the opinion that the offender's mental state would significantly deteriorate upon receiving a custodial sentence.
There is no suggestion in the psychological or the psychiatric reports that the offender's mental health was somehow causative in relation to the offending. The well-known principles concerning the relevance of mental health to sentencing discussed in DPP v De La Rosa [2010] NSWCCA 194 have no application here.
The role of chief financial officer of a publicly listed company is no doubt one in which there are many pressures and stress associated with performing the role. I also am prepared to accept that in the period after an initial public offering those pressures and stresses are likely to increase. However those stresses and pressures are, it seems to me, what a chief financial officer should expect to face in such a role. The evidence concerning the offender's current mental health is particularly relevant in my opinion when I come to consider the consequences of the unexplained delay in his prosecution and the ultimate disposition of his sentence. I will return to that issue when I consider the topic of delay.

Attitude to the offence

In regards to his attitude to the offence, in particular in relation to the fraud offences, the psychological report notes that the offender acknowledges having falsified documents for his home loan, having justified this to himself as the earnings were his and that he knew he could service the loan. The offender reportedly said "I did a shortcut, I shouldn't have done that". The offender described to Dr Henderson that his wife returned to China in 2011 with a view to permanently residing there and he believed that his wife would only return to Australia if he was able to financially establish himself and purchase a family home.
In regards to the market manipulation offences the offender told the authors of both reports that he felt immense pressure to commit them. This pressure was essentially two-fold, emerging from his pride in his professional career and fear of failure, as well as explicit pressure from his colleagues. With regards to the offender's professional pride the offender told Dr Henderson that he was very proud to have secured such a senior and respected role in a large Chinese company, that the company had originated from his wife's home town and as such it was very important that he succeeded in his role. He reported feeling additional pressures from his parent's high expectations of him; these expectations are supported by his mother's reference.
The offender additionally reported having felt pressured to "save face for the company" in light of upset shareholders holding the offender accountable for loss of money during the company's listing. The offender reported to Dr Henderson that he was asked by senior staff at Traditional Therapy Clinics to buy shares in the company in order to prevent the share price from dropping and improve share market confidence. The offender also stated that "it is common practices in China for employees or the staff to inflate the share price of the company". That remark I found quite disturbing.
I referred earlier, when discussing the objective seriousness of the market manipulation offence, to the fact that the Crown accepted that the WeChat messages set out in the agreed facts showed that on occasions the offender was encouraged and directed to trade in TTC shares.
The offender further described having underestimated the degree of criminality of the market manipulation offence. The psychiatric report noted that the offender understood his behaviour was wrong however he expressed the belief that the offence would attract a fine rather than imprisonment. I find this assertion difficult to accept, given the educational attainment of the offender and in particular his holding of a Master's degree in commerce and his attaining of his chartered accounting qualifications. The offender reportedly said: "Those laws are there to protect the integrity of the market, I damaged the market integrity with what I did, I regret it. It has cost me everything in these last five years, endless pain. I've wasted 20 years of my life through this and lost my future."
There was some expression of remorse to the psychologist and I note his early plea of guilty. The testimonials also support the offender's expression of remorse and shame over the offences. I note also that when interviewed by the investigators the offender made full admissions to the fraud offences and cooperated with requests and investigations. In relation to the market manipulation offence, he admitted to engaging in trades in his own name as well as those in the names of Ms Luo and Mr Ma. There was therefore some cooperation with the relevant law enforcement body from an early point, although he has not provided certain documents he said he would in relation to the conduct of the accounts in the name Ms Luo and Mr Ma. The Crown appeared in its written submissions to accept that the offender was genuinely remorseful for his offending.

The future and risk of re-offending

In terms of the future and his risk of re-offending, the psychological and psychiatric reports recorded the offender as having a low risk of re-offending, consistent with his prior good character.
The offender entered a plea of guilty in relation to these offences in the Local Court and I will allow him a 25% discount for the utilitarian value of his pleas. I note that it is appropriate to allow a discount for the utilitarian value of the plea of guilty in relation to both State and Commonwealth offences. On the evidence before me I find that the offender has demonstrated a degree of genuine remorse, however I note I have not heard from him.
The Crown submitted in relation to the plea of guilty to the market manipulation offence, "the timing of the plea may demonstrate a subjective willingness to facilitate the course of justice and contrition but should be viewed in the light of a strong Crown case". I have approached the weight to be given to the plea of guilty for the Commonwealth offence in accordance with those principles. Given the offender's good character and the risk assessment contained in the psychological and psychiatric reports and the offender's family support, I find that the offender has good, bordering on excellent prospects for rehabilitation. Given his good character and his experience over the last five years I consider he is unlikely to re-offend.

Delay

I referred to the issue of delay earlier; the fraud offences occurred in 2012 and 2015, and the market manipulation offence also occurred in 2015. The search warrant was executed on 6 March 2016 and on the offender's premises and I have already referred to the fact that from the outset the offender made some admissions in relation to all three offences. For reasons that are unexplained no charge was laid against the offender until court attendance notices were filed on 29 April 2020, some four years after the execution of the search warrant and admissions were being made by the offender. He now stands to be sentenced more than after eight years after the first fraud offence and almost six years after the commission of the other two offences.
The delay in the charging of the offender is unexplained. While I accept that a market manipulation offence may require time to investigate, here it is difficult to understand why it took four years to charge the offender after the execution of the search warrant and admissions made by him. The trading was over a relatively short period of time. Presumably the WeChat messages were able to be obtained from his phone or other electronic device. The trading platforms he used had already clearly flagged certain trades as having the potential to impact upon the integrity of the market, so that presumably any analysis of the share trading could relatively easily identify the trades and the effect of them on the share price.
The offender's counsel drew attention to the review of the relevant authorities conducted by Bellew J in Sabra v The Queen [2015] NSWCCA 38 at [36] to [37] where his Honour quoted from The Queen v Scook [2008] WASCA 114 and noted the principle that delay would ordinarily be a mitigating factor in sentence where "it has resulted in significant stress for the offender, or left him or her, to a significant degree, in uncertain suspense".
Counsel for the offender also drew attention to the comments made in the Victorian Court of Appeal in The Queen v Schwabegger [1998] 4 VR 649, referred to with approval by Mason P The Queen v R Gay [1998] 4 VR 649. The relevant comments that were approved were as follows:
"Further, there is, in my opinion, a serious incongruity between the assertion that an offence is serious and that the courts must, through the sentences they impose, endeavour to limit its incidence, on the one hand, and such a leisurely progression of the criminal justice proceedings which follow its commission that literally years pass before the matter comes before the court, on the other. For a number of reasons, the investigation and prosecution of criminal conduct should be conducted as quickly as is reasonably practicable if the objectives of the system are to be attained. Additionally, a legitimate sense of unfairness can develop when the criminal justice process proceeds in what can be perceived as too leisurely a fashion."
Here the offender was left for a considerable period of time in a state of uncertainty. My review of the psychological and psychiatric evidence before me, which the Crown did not challenge, suggests that the extended delay, no fault of which lies with the offender, has had a significant adverse effect upon his mental health. I consider here that the delay and the effect it has had on the offender's mental health should be given considerable weight in arriving at the appropriate sentence to be imposed.
It seems almost inevitable given the recording of convictions for these three offences that the offender will cease to be a chartered accountant and effectively has lost his career which he worked hard to obtain qualifications for. I note in that regard the constitution of Chartered Practicing Accountants is before me as an annexure to the offender's solicitor's affidavit, which contains various penalties that can be imposed upon a member who commits a criminal offence, including forfeiture of membership.
The offender of course lost his employment with TTC as a consequence of his conduct. The conviction for the market manipulation offence will result in him being automatically disqualified from managing a corporation for the relevant period under the relevant provisions of the Corporations Act. I do not consider that "loss of face" in the Chinese community or in relation to relatives or friends amounts to some type of relevant extra-curial punishment. I have had some regard to his loss of employment and career and disqualification as extra-curial punishment the offender is likely to suffer and has suffered as a result of the commission of the offences in arriving at the appropriate sentence.

Imposition of sentence

I have had regard to the objectives of sentencing referred to in s 3A of the Crimes (Sentencing Procedure) Act in relation to the sentences to be imposed on the two State offences, which include the need to impose adequate punishment, general and specific deterrence, protection of the community, denouncing of the offender's conduct, recognising the harm done to the victim and the community and rehabilitation of the offender. Personal and general deterrence must always be reflected to some degree in a sentence imposed on an offender such as this offender. However, I consider overall he is unlikely to re-offend which considerably reduces the need for personal deterrence.
In relation to the Commonwealth offence I have had regard to both personal and general deterrence, in accordance with s 16A(2)(j) and (ja) of the Commonwealth's Crimes Act. The Crown in its submissions pointed to decisions such as DPP v Gregory [2011] VSCA 145 where comments are made to the effect that "general deterrence is likely to have a more profound effect in a case of white collar criminals" and I have had regard to that observation in arriving at the appropriate sentence to impose. The need to discourage persons from committing offences which undermine the integrity of Australian financial markets is a component of general deterrence here.
The Crown in its written submissions submitted that a custodial sentence with some period of time to serve "is often appropriate in cases of planned and calculated manipulation that has a real impact on the market as is the case with this offender". The Crown submitted in its written submissions that a sentence of imprisonment was appropriate.
In oral submissions, when pressed by me, if I determine that the sentence on the market manipulation offence is to be two years or less, the Crown accepted that, if I allow the offender to serve the sentence in the community by way of an Intensive Correction Order I would not be falling into an appealable error. Of course I am not bound by that concession of the Crown.
Both the Crown and counsel for the offender referred me to a number of decided cases, either first instance sentence judgments or sentence appeals in relation to the sentence to be imposed on the market manipulation offence. It was not suggested by either counsel that the cases establish some type of range of sentence. I have of course considered the cases I have been referred to and in determining what is the appropriate sentence to impose on that offence. Many of the cases to which I was referred involved engaging in the relevantly prohibited conduct for a much longer period of time and involved many more trades than the offender engaged in, in my opinion, and therefore involved considerably greater criminality. None appear to involve the unexplained delay associated with the offender's prosecution.
The maximum penalties for the three offences have been taken into account as legislative guideposts in determining the sentences to be imposed. In relation to the two State offences I have considered s 5 of the Crimes (Sentencing Procedure) Act and have determined that a sentence other than a sentence of imprisonment is the appropriate sentence to impose in relation to those two offences, I will return to the formal imposition of sentence shortly.
In relation to the Commonwealth market manipulation offence I have considered s 17A of the Commonwealth Crimes Act. I have considered all of the objective and subjective factors that I have discussed. I am satisfied that no other sentence other than a sentence of imprisonment is appropriate in all of the circumstances of the case.
Mr Wu, you are convicted of the three offences to which you have pleaded guilty. In relation to the two State fraud offences the offender is ordered to enter into, in relation to each offence, a Community Correction Order for a period of two and a half years. Those orders commence today and will expire on 13 November 2023. The standard conditions apply, being that the offender is not to commit any criminal offence and is to appear before this Court if called upon to do so.
In relation to the Commonwealth market manipulation offence the offender is sentenced to a term of imprisonment of one year and ten months. As the sentence is for less than two years, I have considered whether I should extend to the offender the leniency of allowing him to serve the sentence in the community. I note that such an alternative to full-time custody is available by virtue of s 20AB of the Commonwealth Crimes Act and regulation 6 of the Commonwealth Crimes Regulation 1990. In considering whether to impose a sentence by way of an Intensive Correction Order I am to consider as the paramount consideration community safety. I am to assess whether the making of such an order or serving the sentence by way of full-time detention is more likely to address the offender's risk of re-offending. I am satisfied that there will be no risk to community safety if I impose the sentence by way of an Intensive Correction Order and is more likely to address his risk of re-offending than full-time detention, given his mental health.
Prior to finalising the sentence I want a report addressing whether or not he is suitable to have the performance of community service and home detention as conditions attached to his Intensive Correction Order. So the matter will have to go over for that report to be prepared.
So, on the two State offences it is a Community Correction Order of two and a half years commencing from today with the standard conditions. On the market manipulation offence a sentence of one year and ten months and I will consider imposing it by way of an Intensive Correction Order once I have that report.

Sentence after Intensive Correction Order Report with Home Detention Condition

2 July 2021

When this matter was last before me on 14 May this year, I dealt with the two State offences of dishonestly obtain financial advantage by deception by way of Community Correction Orders.
In relation to the Commonwealth offence of market manipulation under s 1041A of the Corporations Act, I imposed a sentence on Mr Wu of one year and ten months. I indicated on that occasion that, because the sentence was under two years and because provisions of the Commonwealth Crimes Act and a regulation of the Commonwealth Crimes Regulation permitted the alternative of an Intensive Correction Order to be imposed, on the material that was before me, I considered that if I allowed the offender the leniency of serving the sentence in the community, there would be no compromise of community safety, which is a paramount consideration in considering whether to impose a sentence by way of an Intensive Correction Order.
I did call for a Sentencing Assessment Report to assess him as to his suitability to perform community service as a condition of any such order and to be subject to home detention as a condition of the order. He is suitable for both conditions.
The report is overall a positive one and certainly, given the assessment that he is a low risk of reoffending, it reinforces the view I had earlier that to allow him to serve the sentence in the community would not in any way compromise community safety. Stand up, Mr Wu, please.
Mr Wu, I formally impose a sentence of imprisonment upon you, in relation to that Commonwealth offence, of one year and ten months. It commences today, 2 July 2021. It expires on 1 May 2023. It is to be served by way of an Intensive Correction Order. That order is to contain the following conditions; the standard conditions being that you are not to commit any further criminal offence and you are to be supervised by Community Corrections.
The additional conditions attaching to the order are as follows. You are to perform 200 hours of community service and you are to be subject to a home detention condition for the first 12 months of the order.

Orders 1. The offender is convicted of the three offences to which he pleaded guilty.

Two State offences 1. Impose a Community Correction Order in relation to each offence, for a period of 2 years and 6 months. The Community Correction Orders commence 14 May 2021 and expire 13 November 2023.

Commonwealth offence 1. Impose a sentence of 1 year and 10 months imprisonment to be served by way of Intensive Corrections Order. The Intensive Correction Order commences 2 July 2021 and expires 1 May 2023. 2. The standard conditions are attached: 1. The offender is not to commit any further offences 2. The offender is to be supervised by Community Corrections 1. The following additional conditions are attached: 1. The offender is to perform 200 hours of community service 2. The offender is to be subject to home detention for the first 12 months of the Order

Amendments 22 November 2021 - Amended capitalisation of surname 22 November 2021 - Amended conditions attached to Intensive Correction Order 22 November 2021 - Amended date of orders to include imposition of Intensive Correction Order 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: 22 November 2021

Crimes Act 1900(NSW)ss 192E(1), Crimes

Crimes Act 1914(Cth)ss 16A(2)(j)

At a glance

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Judgment (21 paragraphs)

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Legislation Cited (5)

Cases Cited (7)