THE hunt for former Gunns chairman John Gay’s illegal earnings is set to become a national test case for how the profits of crime are calculated.
The Commonwealth Director of Public Prosecutions has signalled it could go after the full amount Gay pocketed when the case returns to court this week.
Gay sold 3.4 million Gunns shares with inside knowledge in December 2009.
Documents filed with the Supreme Court put the “benefits derived” by Gay at the full $3.1 million sale price of the shares.
The figure is more than three times the $800,000 windfall prosecutors estimated at his trial last year [ Where he was slapped on the wrist with a $50,000 fine by Justice David Porter (click here to read what Justice Porter said …); Then cleared to run companies again … ]
University of Sydney corporate law expert Juliette Overland said how the court determined Gay’s benefit could break new ground.
“It will set a precedent, not just for insider trading cases, (in) any sorts of cases where it’s difficult to calculate what the benefit actually is, if it’s involved something like an avoidance of loss,” Ms Overland said.
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A decision to chase the full sale amount could mean white collar crime being put on an equal footing with drug dealing. Dealers had argued the amount they paid for their wares should be deducted, she said.
“The courts have actually said ‘No, we’re not going to take that into account’,” Ms Overland said. “To increase the punitive effect of the legislation it’s going to be the whole amount.”
