21 There was no dispute at the trial about the first element, which was admitted. The remaining elements were all disputed. The verdict shows that the jury were satisfied beyond reasonable doubt about them all.
22 Mr McGowan's reluctance to disclose the information showed that it was confidential, as did his warning not to trade in Qantas shares. I am satisfied that the offender heard the warning. Although he already owned Qantas shares he had not traded in them for fifteen months yet, remarkably, he placed the order to buy more shares within three hours of hearing Mr McGowan disclose the information. This evidence satisfies me beyond reasonable doubt that the offender actually knew both that the information was not generally available and that if it had been it might have had a material effect on the price of Qantas shares.
23 Before the offender's trial began, Mr Rene Rivkin was tried by a jury, found guilty of insider trading, sentenced to imprisonment for nine months to be served as periodic detention and fined $30,000.00. An important question that arises is whether the offender and Mr Rivkin were co-offenders or committed their offences in circumstances so alike as to oblige the Court in determining the offender's sentence to pay particular regard to Mr Rivkin's. There is no rule that offenders who commit similar crimes must receive the same sentence, and that remark applies to co-offenders. However, a marked disparity between sentences imposed on co-offenders may give rise to a justifiable sense of grievance on the part of any of them, and that is a state of affairs that ought to be avoided.
24 The circumstances of Mr Rivkin's offence were in some respects different from those of the offender's. Mr Rivkin was party only to the telephone conversation initiated by Mr Dassakis. According to the evidence in Mr Rivkin's case, Mr McGowan told him not only that there was a deal for the merger of the businesses of Impulse and Qantas and that it was necessary to wait for ACCC approval but also that Mr McGowan believed that ACCC would approve the merger. The times at which Mr Rivkin bought and sold the Qantas shares were different; the purchase and sale prices and profits were different. There was no evidence and no suggestion in the offender's case (or, for that matter, in Mr Rivkin's) that he and Mr Rivkin acted by agreement or arrangement with one another or were in any way complicit. There is no evidence that either knew what the other was doing. It was never suggested to the Court that there ought to be a joint trial of both offenders.
25 Notwithstanding the objective differences between the offences, however, I consider them and the circumstances in which they were committed to be so alike as to attract the principle to which I have referred. It is therefore necessary to pay close regard to the sentence imposed on Mr Rivkin.
26 I will deal with matters as counsel did, by comparing important features of the two cases. The first is the information that was possessed by the respective offenders. As I have observed, Mr Rivkin knew something that the offender did not, namely that it was Mr McGowan's opinion that ACCC would approve the merger. Mr Byrne SC submitted that the importance of that piece of information was that the totality of the information Mr Rivkin had was more complete and less speculative than that which the offender had. So the added speculative quality of the information the offender had made his offence objectively less serious.
27 I do not think that the absence of the third piece of information has the importance contended for. It would have been important as bearing on the capacity of the information as a whole to affect the market price of Qantas shares and on the offender's knowledge of that capacity, but the relevant elements of the offence have been proved without it. I doubt whether what the offender knew was really much less, or much less speculative, than what Mr Rivkin knew. Although the offender did not know Mr McGowan's opinion about the prospects of approval, the action he took and the speed with which he took it show that he made his own shrewd assessment to much the same effect.
28 The second point of distinction contended for is that it was at Mr Rivkin's insistence, not the offender's, that Mr McGowan was constrained to impart the information. The offender did not press Mr McGowan to say why he was reluctant to commit himself, but came by the information incidentally while carrying out his proper function as vendor's agent. Attention was drawn to the wide range of persons who might come within the statutory definition of "insider", including persons like the offender who are not directly or intimately involved with any company concerned, as an officer of such a company would be. There was no breach of the trust that such a person would have towards a company and its shareholders.
29 The statute gives a wide meaning to the term "insider". Neither Mr Rivkin nor the offender was intimately concerned with the affairs of Impulse or Qantas and for that reason both offences fell towards the less serious end of the range of criminality contemplated by the statute. As between the two, the offender was in my view a little closer to the bottom of the range than Mr Rivkin.
30 The third point of distinction concerns the amount ventured and gained by the offender and Mr Rivkin. The offender invested $55,855.00 in the purchase of 20,000 shares. The average purchase price was $2.785 per share. He sold one half of the parcel on 1 May as soon as there was a public announcement of the merger. The sale price was $3.33 per share and the offender's gross profit on that parcel was $5,450.00. He sold the remainder of the shares on 17 May for $3.42 per share, giving a gross profit on that parcel of $6,350.00. So an investment of $55,855.00 yielded a gross profit of $11,800.00.
31 It was submitted that Mr Rivkin's criminality was greater because he ventured more. He bought 50,000 shares for some $2.78 per share, investing two and a half times as much money as the offender and standing to make proportionately greater gains. On the other hand, he sold the shares at a lower price. His gross profit of $2,664.94 was modest by comparison. It seems to me that the amount invested is a more important indicator of criminality than the amount ultimately realised from the criminal activity concerned. One would not regard as trivial the criminality of an insider trader who ventured much but lost. By that criterion the offender's criminality was significantly less than Mr Rivkin's.
32 It was submitted by Mr Byrne that the offender's crime was less serious than Mr Rivkin's because Mr Rivkin was sentenced as a most experienced stockbroker and trader in shares, a man who for profit circulated information and advice to intending investors. Whealy J took a very serious view of that circumstance when sentencing Mr Rivkin. It was submitted that the offender had no such intimate knowledge or connection with the stock market. I think that there is substance in that submission. Although he had a share portfolio, the offender has not been shown to have had any special connection with the stock market and there is not present the element which Whealy J described as importing a serious content into the circumstances of Mr Rivkin's offence.
33 It was submitted by Mr Byrne that the offender's crime was less serious because he did not hear Mr McGowan's warning not to trade in Qantas shares. Attention was drawn to differences in the evidence about what Mr McGowan said. He himself gave evidence that he warned Mr Dassakis, and then Mr Rivkin, not to trade. His brother, Mr Mark McGowan, who was present throughout the conversations, gave evidence that Mr Gerard McGowan gave the warning. At Mr Rivkin's trial, however, he gave no evidence about that. Mr Dassakis gave no evidence of any warning.
34 I would not regard Mr Mark McGowan's failure to mention the warning at the Rivkin trial as detracting from his evidence at the offender's trial that Mr Gerard McGowan gave the warning or as damaging Mr Gerard McGowan's evidence that he gave it. I was impressed by the evidence of both witnesses.
35 The fact that Mr Dassakis did not remember the warning is of no consequence. I thought his evidence unimpressive. It was surprising that the man whose job it was to arrange a meeting to find out exactly why Mr McGowan wanted the clause in the contract remembered next to nothing about the reasons given. Of course, my not accepting evidence that was silent about the existence of a warning cannot prove that the warning was given. It is simply that Mr Dassakis' evidence does not cause me to have any doubt about the reliability of the evidence of Mr Gerard McGowan and Mr Mark McGowan.
36 I am satisfied beyond reasonable doubt that Mr Gerard McGowan warned Mr Dassakis and Mr Rivkin not to trade in Qantas shares and I am satisfied beyond reasonable doubt that the offender heard the warning. In that respect the offender's and Mr Rivkin's criminality is the same.
37 The last two matters of comparison relate to the trial itself. Whereas Mr Rivkin's trial was protracted and an occasion for many unsuccessful objections to the tender by the Crown of evidence and to the directions given and to be given to the jury, the offender's trial was conducted in the most efficient manner possible. Mr Byrne co-operated with the Crown throughout. There was substantial agreement about the elements of the offence, about the evidence to go before the jury and about directions to be given to them. Objections to evidence were clearly identified at the commencement of the trial and dealt with conveniently before it was necessary to call the jury. Two days were enough to deal with those matters. The resulting case before the jury took only seven working days.
38 In my opinion the offender's conduct of the case was exemplary. Parties who conduct their cases in such a manner ought to be encouraged, by appropriate consideration in sentencing where necessary, to conduct their cases in a manner which permits the most efficient use of Court time.
39 The final matter relates to the age of the offence itself. The Crown wished and was entitled to have Mr Rivkin tried before the offender. The difficulties and delays in the Rivkin case and the subsequent appeal made it necessary to delay the commencement of the offender's trial. He was committed to this Court for trial on 30 July 2002. In September 2002 he was arraigned and his trial was fixed to commence on 28 April 2003. That fixture was vacated because of the Rivkin trial which was then imminent. A new commencement date of 22 October 2003 was fixed. That fixture had to be vacated for the same reason. So the offender's trial did not begin until 8 November 2004, two years and three months after his committal to this Court and more than four and one half years after the occurrence of the events giving rise to the charge. None of this delay has been the offender's fault. It must have weighed heavily upon him. He is entitled to have taken into account in his favour the effect on him of the delay and the staleness of the offence.
40 Insider trading is a serious offence because it can affect the integrity of the stock market. This and the difficulty of detection of the offence give rise to a particular need for sentences that deter others from such conduct. The maximum penalty is imprisonment for five years and a fine of $200,000.00.
41 The offender is a mature and intelligent man, the proprietor of a large and apparently successful real estate agency. As a licensed agent he has an obligation to deal confidentially with private information that comes to him during the course of his business. His use of the information he knew that Mr McGowan was so reluctant to disclose constituted a breach of trust. Thus, although the offender is not to be regarded as seriously as Mr Rivkin was regarded as a leading broker, trader and adviser, his ready breach of confidence exacerbates his offence.
42 The offender is a man of prior good character. He is well regarded in the community. I accept without reservation the evidence of those who spoke about his integrity and reputation before the events of April 2001. He has worked for and given to charities. Of course, in offences of this kind, which are likely to be committed by persons of good character and call specially for deterrent sentences, good character must be given limited weight in sentencing.
43 I do not regard the offender's model approach to the case as showing any more than sound common sense. I do not regard it as evidence of contrition and it was not submitted that he was remorseful. Even so, I doubt whether he will offend again, given the experience that the charge and the trial have been for him and the effect that the events are likely to have on his business and private life and reputation.
44 I take into account that by the Corporations Act the offender is automatically disqualified by his conviction from managing a corporation. As things stood, he was a director of and presumably managed two companies as well as Jetoten. I take into account the possibility that the New South Wales Director of Fair Trading may bring an action asserting that because of this offence the offender is not a fit and proper person to be involved in the conduct of the business of a real estate licensee.
45 The Director of Public Prosecutions has applied for a pecuniary penalty order under the provisions of the Proceeds of Crime Act. The offender has not opposed the order and has co-operated with the Director. I take that co-operation into account in imposing sentence.
46 The Court must not sentence the offender to a period of imprisonment unless it is satisfied that no other sentence is appropriate. It was submitted on behalf of the Crown that the offender ought to be sentenced to a period of full-time detention. That is a submission which must be rejected, if only by comparing the offender's case with Mr Rivkin's. I think that to impose such a sentence would give the offender a justifiable sense of grievance. On the contrary, my comparison of the two cases leads me to conclude that the offender's overall criminality is so far less and his personal attributes so more favourable than Mr Rivkin's that he ought to receive less than a custodial sentence.
47 The offender has been assessed as suitable for a community service order and has signed an undertaking as required by s86(1)(e) Crimes (Sentencing Procedure) Act 1999. The longest period of service that may be ordered for this offence is 500 hours.