FORMER Gunns Ltd boss John Gay has avoided a jail term and been fined $50,000 for insider trading.
Justice David Porter handed down the penalty today in the Supreme Court in Launceston, with Gay later describing the past four years as “among the hardest” of his life.
Gay, 70, of Clarence St, Launceston, pleaded guilty earlier this month to one count of insider trading.
He sold 3.4 million Gunns shares from December 2 to 10, 2009, while possessing information from an October management report that he ought to have known would affect the stock price.
Gunns shares dropped from the average price he achieved of 90 cents to 68.5 cents in February 2010.
Justice David Porter said Gay’s offence was less serious than many cases of inside trading.
This was because Gay had made a decision to sell before he received the price-sensitive information and the decision to sell was health related.
The judge said Gay also spoke to the company secretary Wayne Chapman before the sale and was told there was a window of opportunity under the company’s trading policy.
Justice Porter said Gay ought have known, rather than did know, the information was price sensitive.
In passing sentence, he told the court Gay was of good character and the former CEO’s ill health was relevant.
As a result of his conviction, Gay is disqualified from managing corporations.
He did not comment after leaving the court but later issued a statement saying he was looking forward to spending more time with his family and focusing on his health now court proceedings had ended.
He said the past four years had been among the hardest of his life.
“I’m looking forward to enjoying time with my wife, children and grandchildren, working on my farm and focusing on my health,” Mr Gay said in a statement.
“My family and I would like to sincerely thank so many people who have offered their support and friendship during this time.
“I hope all people respect my privacy as I work though treatment for my ongoing battle with cancer.”
The direct actions of John Gay have essentially cost a lot of people their livelihood as the timber company Gunns collapsed as a direct result of his actions. The law in this case has failed the former workers and contractors by allowing John to walk free with nothing more than a slap on the wrist, considering the outright personal profit made by selling his shares. It would be good to see a class action taken against John Gay by the former workers of Gunns for loss of lifestyle (or similar) but I can’t see this happening.
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