CDirector of Public Prosecutions v Govinda
[2023] VCC 742
•3 May 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Unrestricted Suitable for Publication |
Case No. CR 21 02527
| DIRECTOR OF PUBLIC PROSECUTIONS |
| (CTH) |
| v |
| GABRIEL GOVINDA |
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JUDGE: | HIS HONOUR JUDGE BAYLES | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 6 June 2022, 2 December 2012 | |
DATE OF SENTENCE: | 3 May 2023 | |
CASE MAY BE CITED AS: | CDPP v Govinda | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 742 | |
REASONS FOR SENTENCE
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Subject:
Catchwords: False or misleading appearance with respect to the market or price for trading – disseminating information about illegal transactions – ‘prop bids’ – ‘wash trades’ – illusion of demand for shares – market manipulation – extra curial punishment from delay and mental health
Legislation Cited: Corporations Act 2001 (Cth) – Crimes Act 1914 (Cth) – Sentencing Act 1991 (Vic)
Cases Cited:R v Verdins [2007] VSCA 62; 16 VR 269 – Worboyes v The Queen [2021] VSCA 169; 96 MVR 344 – R v Bernstein [2008] VSC 254 – Kamay v The Queen [2015] VSCA 269 – DPP (Cth) v Gregory [2011] VSCA 145
Sentence: Recognisance in the sum of $5,000 – 5 years good behaviour – if breached 30 months imprisonment – 252 penalty units total monetary penalty of $42,840
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Mr J. Manning | CDPP |
| For the Accused | Mr P Dunn KC with Ms L Theis | Furstenberg Law |
HIS HONOUR:
1Gabriel Govinda, you pleaded guilty to an indictment containing 42 charges, including 18 charges of engaging in conduct that had or was likely to have the effect of creating a false or misleading appearance of active trading in financial products pursuant to ss1041B(1)(a) and 1131(1) Corporations Act 2001 (Cth); 5 charges of engaging in conduct that had or was likely to have the effect of creating a false or misleading appearance with respect to the market for or price for trading in financial products pursuant to ss1041B(1)(b) and 1311(1) Corporations Act (Cth) and; 19 charges of disseminating information about illegal transactions pursuant to ss1041D and 1311(1) Corporations Act 2001 (Cth) (the Act).
2The maximum penalties for each of these three different charges is 10 years imprisonment.
3Your offending occurred over an approximately 10 month period between 17 September 2014 and 21 July 2015.
4A detailed summary of prosecution opening was filed, and read to the court at the plea hearing by Mr Manning, who appeared as counsel on behalf of the Commonwealth Director of Public Prosecutions. I adopt that summary as part of my reasons for sentence. I will not repeat it in detail here however, the main features of your offending are as follows.
5Your offending relates to trading activity on the Australian Stock Exchange (ASX) and associated commentary of yours on a share trading website called HotCopper.
6You operated 13 trading accounts that were held with various brokers. The individual account holders for these accounts were a range of different people, including family members, friends or associates of yours.
7You used those 13 trading accounts to exchange shares between accounts to create an illusion of active trading, a practice referred to as 'wash trades'. You also use the accounts to place dummy bids to create an illusion as to the market for certain shares, a practice referred to as 'prop bids'. The wash trades and prop bids relate specifically to your trading behaviour for 20 different stocks in the period 17 September 2014 to 21 July 2015.
8Further, you used your account on the HotCopper, website under the account name 'Fibonarchery' to promote the shares that you propped and wash traded to stimulate demand and sell at a higher price, the practice referred to as ramping and pumping.
9The 18 charges contrary to s1041B(1)(a) of the Act relates to your use of the share trading accounts to conduct wash trades. A wash trade involves a transfer of shares that does not result in a change to beneficial ownership. A person offers to sell shares, and matches their own offer with a bid. The 18 charges related to 171 wash trades in 18 different stocks between 17 September 2014 and 21 July 2015. These trades had the effect of creating, and were intended to create, a false or misleading appearance of active trading in the shares. The wash trades often increased in value and were followed by increased activity on the stock, however in many instances it is not possible to state the precise or full effect of the wash trades on the particular market.
10The 5 charges contrary to s1041B (1)(b) of the Act relate to your use of the share trading accounts to place prop bids. A prop bid involves a disingenuous offer to buy shares at a price where the person does not intend to effect a trade. The purpose is to create the illusion of demand and draw other buyers to the market to sell shares at a higher price. By placing prop bids in a particular stock, and simultaneously lowering sale bids, the conduct seeks to close the gap in the market.
11The 5 charges related to 120 prop bids in 5 different stocks between 17 September and 6 November 2014. Each bid had, or was likely to have, the effect of creating a false or misleading appearance with respect to the market for shares, and was intended to result in such an appearance. In many cases, it is not possible to determine the precise or full effect of the prop bids on a particular market.
12The 19 charges contrary to s104(1)D of the Act relate to your use of the HotCopper website to ramp up and pump shares involved in wash trades and prop bids. In essence, you suggested to other members, or readers of that website, that the prices of those shares were likely to rise. You did this for the purpose of generating demand for those shares and increasing your sale profits.
13In essence, your conduct involved at least two aspects. Your share trading activity on the 13 share trading accounts was conducted to create the illusion of demand for certain shares. At the same time, you posted on the HotCopper website, highlighting that demand for those shares, as if you were an unconnected third-party observer.
14The purpose of those posts was to generate share trading activity on those shares, to increase the prospects of you selling those shares at a higher price. The 19 charges relate to 50 HotCopper posts concerning 19 different stocks between 18 September 2014 and 21 July 2015. I just pause here to note that I am not sure that that number of HotCopper posts is correct, but in any event I will move on for the moment.
15You registered the username 'Fibonarchery' on the HotCopper website in May 2011. HotCopper is an Internet discussion forum relating to the ASX, with some 235,000 members at the time of the offending.
16You also created and managed your own stock market blog and share tipping website, and you also authored a number of articles about share trading for other websites.
17During the offending time, you operated the share trading accounts held in the names of 13 other people, being either family members, friends or associates. You entered into agreements with those people to trade on their accounts, and for the account holder to remit a defined share of profits to you.
18You concealed your involvement in these share trading accounts with brokers. Neither you nor the account holder informed brokers of your access to and use of the accounts. On a number of occasions, a broker attempted to contact the account holder to query some of the trading activity on their account, and whether the operator was placing orders on another account or whether the operator was colluding with another account holder in contravention of the Act. On a number of occasions you impersonated the account holders in your dealings with the broker, and denied any wrongdoing.
19Your arrangements with the account holders included you agreeing to cover any losses from your trading, and in turn, the account holder agreed to remit a defined share of any profits to you. The defined share ranged between 50 per cent and 75 per cent. These agreements were mostly oral agreements, but on some occasions were put in writing.
20I was informed that it is not possible to calculate your profits from the offending. 20 stocks selected as examples of broader offending within the charge period represent share purchases worth $3.1 million (excluding brokerage), of which a significant portion were transactions between the share trade accounts.
21From September 2014 to August 2015, at least $650,000 was transferred by account holders into your bank accounts.
22You employed the strategy known as 'T3' trading, which allows traders to purchase shares with no immediately available funds in their account. Payment for the shares becomes due generally on the third day after the purchase. If the shares are sold before settlement, the purchase price is offset by the sale price, allowing for a method of trading in shares at a value in excess of that which is available in the account.
23'T3' trading is a legal trading method, and provided for by a number of trading facilities, including Commsec, Westpac, NetWealth, Heritage Online and Easybroking. However, the trading facilities each have their own limits as to the value of securities able to be purchased without having cleared funds available at the time of purchase.
24Whilst the use of T3 trading is not itself illegal, it was alleged that your anonymous trading across the 13 accounts allowed you to conceal your wash trades and prop bids and to access credit of approximately $250,000 across the share trading accounts.
25You employed a deliberately manipulative share trading strategy designed to maximise profits for you and the account holders. Investigators located a number of handwritten notes located during the execution of a search warrant at your house on 9 September 2015. Those notes include the following written statements –
(a) 'Sell to self to create illusion of volume'
(b) 'Outbid on pre-auctions on stock you own in a separate account, hoping someone will outbid again to buy your stock'
(c) 'Wait until end of second day after a breakout to buy T+3 traders forced selling'
(d) 'Buy big parcels of small cap cash backed resource shares at reasonable price, alert H.C day traders to the action sell to them at higher price at end of day'
(e) 'Before buying liquid and penny stocks – check OBV, check cash balance, check candles, check Bollinger bands, check money flow, check buyers + sellers'
(f) 'DT – sell stock down to yourself then buy stock up to yourself. Buy cheap, make it expensive again, sell to others'
(g) 'Volley prices upwards on small cap stocks, buy from separate accounts. Cap stocks for months, release pressure, sell into strength'
(h) 'Sell to self to down ramp. Put massive volume through to self on illiquid options at inflated price then sell to other at that price i.e. MABOA April 11'
(i) 'Cause buyer to leapfrog my orders then sell to him. Tricky auction sales linewipe 2c stocks where large number of buyers are directly below my linewipe they will fear missing out'
26You also demonstrated an awareness of some of these tactics in your posts on HotCopper where you posted a number of comments where, in essence, you accuse other people of engaging in this activity.
27Between May 2011 and November 2015 you were a member of HotCopper with the username 'Fibonarchery'. By November 2015 you had 1,566 followers and you had made at least 12,000 posts. You were amongst the top 40 most popular posters on the website.
28HotCopper also ran a competition known as the Short-term trading tipping game. By September 2014, you had a number of distinctions including picking the greatest number of winners over a period of 12 months; having an accuracy of 66.7 per cent from 150 tips in that period; being the most accurate poster over a 7 week period; and identifying a selection of shares with the highest percentage increase in price over a four week period. It is unclear to what extent those acknowledgements were achieved as a result of manipulative trading strategies, but they must have been connected to some extent with your offending conduct.
29In 2015, it appears that you were involved in a number of disputes, including one with HotCopper, where you were advised by HotCopper administration of the following:
Let me know that you can understand how this is perceived as market manipulation and a lot of complaints are asking for us to refer this to ASIC. It’s immoral and indecent to [load] up on a stock knowing you have followers and then let it loose and milk it.
30You replied to that communication acknowledging how your conduct could be perceived. You said that you were a very small player and your entire net worth was under $250,000.
31On 10 September 2015, you participated in a recorded interview with investigators, where you made a number of partial admissions, but from the portions of that interview extracted in the summary of prosecution opening, you appeared to minimise much of your conduct and deny much of the substance of the allegations.
32However, I was also informed that following this, there was a lengthy period of negotiation between you and ASIC where you co-operated with that process, you ultimately accepted a plea brief in relation to the matter in 2020, and you pleaded guilty at a committal mention in the Magistrates' Court on 26 November 2021.
Prosecution submissions on sentence
33In written submissions dated 1 December 2022, I was reminded that I am required to have regard to the matters set out in Part 1B of the Crimes Act 1914. In particular, I must impose a sentence that is of a severity appropriate in all the circumstances of the offence; I must have regard to the non-exhaustive list of matters set out in s16A(2) so far as they are relevant and known; and a term of imprisonment must not be imposed unless the court, having considered all other available sentences, is satisfied that no other sentence is appropriate in all the circumstances of the case.
34The prosecution submission was first, that no sentence other than a term of imprisonment is appropriate in all the circumstances; and second, that there should be a period of immediate imprisonment before release either by recognisance release order or non-parole period.
35Chapter 7 of the Corporations Act 2001 (the Act) deals with financial services and markets. Its objects include the promotion of fair, orderly and transparent markets for financial products. The present offences fall within Division 2 of Part 7.10 of the Act. The provisions within this Part seek to protect the integrity of financial markets which are fundamental to the operation of the market economy.
36In relation to the offences contrary to s1041B, and by reference to legislative provisions, the second reading speech of an amending act that increased penalties from 5 years to 10 years imprisonment, and High Court authority, the following principles were submitted by the prosecution –
(a) insider trading and market manipulation unfairly distort Australia's financial markets and cause serious harm to their fair and efficient functioning.
(b) the purpose of the legislative provisions creating these offences is to protect the market for securities against activities which will result in artificial or managed manipulation. The provisions seek to ensure that the market reflects the forces of genuine supply and demand.
(c) Participants in the market are entitled to assume that 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.
37The prosecution submitted that the following factors inform the assessment of the gravity of the offending –
(a) the complexity and sophistication of the offending;
(b) the level of planning and premeditation;
(c) the amount of money, or value of the financial products, involved in the offending, and the number of transactions carried out;
(d) the duration of the offending;
(e) your motive and state of mind;
(f) whether the transactions created an artificial price in fact; and
(g) any effect or damage to the market or individual victims.
38The offending contrary to s1041B involved you placing orders on the ASX that had, or were likely to have had, the effect of creating a false or misleading appearance. It is not necessary that the conduct in fact has the stated effect. It is sufficient if it is likely to have that effect.
39It was submitted that it is difficult in the present case to fully and clearly identify the actual effect of your conduct on the market. Nevertheless, it was submitted that it is clear that your conduct in most instances did have a substantial impact on the market for a particular security.
40It was submitted that your conduct upon the market was not permanent, and was confined in temporal proximity to the orders you placed. However, it was not fleeting, and on each occasion that you placed wash trades and prop bids, the integrity of the market was compromised.
41It was also submitted that the impact of your conduct extended beyond the particular stock in question, as your conduct had the potential to undermine the integrity of the Australian securities market as a whole.
42Your offending involved a protracted and persistent course of conduct over a period of some 10 months. The offences were not isolated actions but rather part of a calculated strategy to drive profit. The fault element for each of the offences you pleaded guilty to was that you intended the outcome – that is that your conduct had, or was likely to have, the effect of creating a false or misleading appearance as alleged.
43Your offending occurred against a backdrop of wider conduct of a similar nature. You are only to be sentenced in respect of the charged conduct, however that context precludes any conclusion that your offending was uncharacteristic or isolated only to the period of the charge.
44I was informed that it is not clear what you ultimately invested in this trading conduct. Nor is it possible to determine the precise profit realised. However, there was at least $650,000 transferred by the various account holders into your bank account in the period from September 2014 to August 2015.
45The Crown submitted that your subjective culpability is high. Your motive for the offending was profit. You were an experienced trader. You demonstrated an awareness of your conduct, and its wrongfulness, through a number of aspects of your conduct, and the handwritten notes kept at your house, that demonstrated an awareness of strategies.
46In relation to the offences contrary to s1041D, the prosecution submitted that is not possible to discern the impact of this offending upon the particular market in question, however it is open to infer from the size of your following on HotCopper, your success in the STT tipping games, and consequential trading activity, that your conduct had some of the desired effect. However, it is not known to what extent your posts were acted upon by others or improperly influenced the bidding on securities.
47Nevertheless, it was submitted that the true gravamen of the offending in this conduct is the circulation or dissemination of the information. The posts compromise the integrity of the market by seeking to increase demand for a security on the false premise of illegal activity.
48Again, it was submitted that your subjective culpability for this offending is high. You had an awareness of your capacity to influence others. Your motive was profit. You disseminated information with the intention of impacting the market.
49The charges on the indictment are 'rolled up' charges, reflecting many instances of offending, each capable of constituting separate offences. Accordingly, the criminality involved in each is greater than with a charge involving only one episode of criminal conduct.
50The Crown's submission was that your offending falls in the moderate to high range of objective seriousness, having regard to all the circumstances.
51The prosecution submitted that the following principles apply to sentencing –
(a) general deterrence is a particularly significant factor. Your offending involving blatant dishonesty and sophisticated fraud.
(b) The prosecution referred me to the decision in Kamay v The Queen,[1] where the Victorian Court of Appeal cited its earlier decision in DPP(Cth) v Gregory,[2] stating the following matters, first:
general deterrence is a particularly significant sentencing consideration in white collar crime… [further]
General deterrence is likely to have a more profound effect in the case of white-collar criminals. White-collar criminals are likely to be rational, profit-seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished. Further,
white-collar criminals are also likely to be first time offenders who fear the prospect of incarceration.[1] [2015] VSCA 269.
[2] [2011] VSCA 145, 53.
(c) White-collar offending can be difficult to detect, investigate and prosecute.
(d) The current offences cannot be described as victimless. The victim is the investing community at large, the injury being that related to the loss of confidence in the efficacy and integrity of the market in public securities. It is not uncommon in these matters for any loss or damage to be unquantified.
(e) Even where offending has no distorting effect on the market, general deterrence remains an important factor in sentencing to protect the integrity of the market. The damage to the integrity occurs when the investment is made, regardless of its outcome.
(f) The prosecution accepted that through your plea of guilty, you have accepted responsibility for your conduct and indicated a willingness to facilitate the course of justice.
(g) Your plea of guilty has significant utilitarian value. It is important to acknowledge the utility of your plea in the context of the pre-brief proposal reached between you and ASIC. The prosecution accepted that the value of your plea is significant.
(h) It was accepted that you engage in substantial negotiations with ASIC about an agreed statement of facts and charges. You cooperated throughout that process. You accepted a plea brief in the committal mention stream in the Magistrates' Court. This has obviated the need for any witnesses to give evidence, including any expert evidence, and prevented any further delays in the likely investigative period required to obtain all evidence. The prosecution acknowledged that any trial in this matter would have been complex, resource intensive, and lengthy.
(i) The prosecution acknowledged that your plea of guilty has been entered during the period of the COVID-19 pandemic, where the courts have laboured, and continue to labour, under the effects of the pandemic and its impact on the criminal justice system, particularly in the State of Victoria.
(j) The prosecution acknowledged that your conduct, in combination with your plea of guilty, can be seen as an expression of remorse.
(k) Good character, loss of profession and prospects for rehabilitation are unexceptional in white-collar crimes. Good character is not to be given undue significance as a mitigating factor, and plays a lesser part in the sentencing process.
(l) The prosecution submitted that your prospects of rehabilitation can be considered reasonable, though contingent upon ongoing treatment.
(m) The prosecution submitted that specific deterrence has some relevance in the sentencing exercise. Your offending was repeated and sustained, and you continue to trade in the market. This submission was tempered by the age of the offending and lack of any subsequent charges since that time.
(n) The prosecution accepted that imprisonment will have an impact upon your son, and that this is a matter relevant as a consideration in the instinctive synthesis.
(o) Delay, as a factor in sentencing, has some complexity to it. The prosecution written submissions set out a number of guiding principles on the issue. In the end, the prosecution accepted that these charges were committed between 2014 and 2015. A lengthy and complex investigation followed, which also involved substantial negotiations between you and ASIC. Charges were filed in June 2021.
(p) The prosecution acknowledged that the charges were 'hanging over' your head from June 2021 following charge, although you have been in a state of suspense during the whole period of negotiations with ASIC. It was acknowledged that you have continued treatment throughout that period of time, you have not been charged with anything since the offending, and it was accepted by the prosecution that delay is a relevant factor.
(q) Upon conviction for these offences you will be disqualified from managing a corporation for five years. Disqualification is a relevant matter in the overall synthesis of determining sentence.
52At the plea hearing, and in response to a question from me about the availability and appropriateness of a financial penalty being imposed in addition to a term of imprisonment, the prosecution filed further written submissions dated 31 January 2023. I have read and had close regard to those submissions which were helpful, and I will return to those later in these reasons for sentence.
53However, I note that the prosecution position was stated that the Crown maintains its position on sentence being that no sentence other than a term of imprisonment is appropriate in all the circumstances, and that there should be a period of imprisonment before release. While it is open to impose a fine in addition to such a sentence, the prosecution submitted that if a period of imprisonment is imposed, then the prosecution does not seek the imposition of a financial penalty.
Defence submissions
54Mr Dunn KC appeared, together with Ms Theis on your behalf. A number of documents were filed in support of the plea, to which I will refer in due course. A chronology, and an outline of plea submissions, both dated 28 November 2022 were received by me on your behalf.
55It was conceded, both in those written submissions and at the plea hearing, that the offending is of a kind, and a level of seriousness, that warrants a term of imprisonment. However, it was submitted on your behalf that in all the circumstances of this case warrant a term of imprisonment not exceeding three years, and therefore capable of involving your release by way of a recognisance release order, either immediately, or after serving some portion of such sentence in prison.
56Mr Dunn submitted that given the powerful matters in mitigation, it is both open, and appropriate, to allow for your immediate release by way of recognisance release order without being required to serve a period of time in prison.
57The matters relied upon in support of this submission, in brief compass, were as follows –
(a) You are now, as I understand, currently a 42-year-old man with no prior or subsequent criminal history
(b) It was submitted that you were not motivated primarily by greed, but rather by the desire for success with the reward of acknowledgement and approval from family and friends, and the broader audience of the HotCopper website.
(c) There has been a significant delay of now more than seven years since the offending period. During that time you participated extensively in the treatment of your mental health conditions, and have taken steps to rehabilitate yourself with no further offending. The delay has led to great uncertainty and anxiety over a long period of time, which is punishment in itself, particularly in the context of your ongoing mental health.
(d) You have long-standing mental health issues from which you have suffered since childhood. You have been diagnosed with what has been termed 'double depression', ADD and anxiety, for which you have been medicated and received many forms of treatment for many years prior to and subsequent to the offending.
(e) There is evidence that your mental illness was likely present throughout the time of the offending, and that it likely played a contributory role in the offending.
(f) You would find imprisonment very stressful. It is likely that imprisonment would be substantially more difficult for you than a prisoner of normal health. It is much more likely than not that your depressive condition would deteriorate further in the context of imprisonment.
(g) Specifically in relation to the principles in Verdins,[3] it was submitted that: your moral culpability is reduced, which affects considerations of what is to be deemed just punishment and lessens the need for denunciation; general and specific deterrence should be moderated or eliminated; a term of imprisonment would weigh more heavily on you than on a person of normal mental health; there is a serious risk that imprisonment would have an adverse effect on your mental health; a sentence that allows you to continue treatment in the community is preferable.
(h) You cooperated with ASIC investigators during a lengthy period of negotiation over the allegations.
(i) You pleaded guilty and did so during the time of the COVID-19 pandemic. Your plea of guilty has significant utilitarian value, and the reduction in sentence that you would ordinarily receive for a plea of guilty is augmented by the principles discussed by the Court of Appeal in Worboyes v The Queen.
(j) It was further submitted that your plea of guilty reflects a willingness to facilitate the course of justice, an acceptance of responsibility for the offending, and demonstrates genuine remorse, which is also a strong indication of positive prospects of rehabilitation.
(k) You have suffered extra-curial punishment as a result of the combination of your own mental health and delay, a period during which your marriage also broke down.
(l) A term of imprisonment will be particularly onerous for you, given your mental health condition and the fact that you are the father to a now three year old son, and your mental condition is likely to worsen in prison.
(m) Finally, there has been a substantial period of demonstrated rehabilitation during the period of delay.
Personal circumstances
[3] [2007] VSCA 62; 16 VR 269.
58You were born and raised in Perth. Your father worked as an investigator for ASIC and subsequently a gardener. Your mother worked in various jobs including as a music teacher, and conducting 'aura' readings. Your mother passed away from lung cancer in July 2020, she was aged 69. You were unable to attend her funeral due to COVID-19 restrictions. You have an older brother and younger sister. As I understand it your family remain living in Perth.
59You experienced considerable financial hardship as a child and as a result, food was often short. Your parents separated when you were 11 years old. I was informed that you have a complex family history of mental illness, including suicides and suicide attempts on both sides of your family.
60As a young boy, at the age of about 11, you and your brother discovered your mother attempting to kill herself in her car, and saved her from this. You were subsequently referred to a psychologist from a very young age. You regularly moved between your separated parents' homes. You experienced separation from your siblings. You were diagnosed with mental health issues from a very young age. It was submitted that you have a very significant genetic loading for mental illness and suicide risk.
61You completed secondary school to Year 12, then commenced a degree in psychology at the University of Western Australia. You withdrew from that course and enrolled in the Perth Academy of Natural Therapies where you studied alternative therapies. At around that time, you commenced work as a gardener. Your gardening business started doing well, and you stopped studying at the Perth Academy of Natural Therapies in order to focus on your gardening clients full-time.
62I was informed that you were first introduced to stock market trading from a video of your father's. You commenced day trading, where you were losing money but you became obsessed and believed that you would eventually be successful.
63You moved to Melbourne, as I understand it with your then partner Prudence Riley, and you lived in Brighton. You completed massage qualifications and worked for a short time as a masseuse in Brighton. You continued to trade on the stock market and your obsession became more entrenched, where you spent all the available time studying and researching trades.
64In 2011 you joined the HotCopper website with the username 'Fibonarchery'. HotCopper recognised users' successful posts with award symbols and 'effectiveness ratings'. I was informed that you became fixated on gaining that formal recognition on HotCopper and earning that form of merit. Over time you began earning an income from trading, and in 2014 when you were about 33 years old, you were able to cease operating your gardening business and focus entirely on investing and trading on the stock market.
65You have had two significant personal relationships. The first of those was with Prudence Riley. You separated in 2010 but remained close friends. You then met Sarah Mauriks and commenced a relationship that lasted 11 years. The two of you moved back to Western Australia, where in September 2015, your home was searched by ASIC and you were arrested and interviewed for your conduct, the subject of these charges.
66As I understand it, your relationship was under stress from that time onwards. You separated for a time and then recommenced the relationship. You moved back to Melbourne due to Ms Mauriks' father becoming unwell. You were married in 2018, and your son, Cole, was born in May 2019. However, you separated in December 2021 and there have been family law proceedings to deal with property and parenting arrangements. You have regular contact with your son.
Psychiatric evidence
67I received a number of documents that were tendered at the plea hearing in the form of psychiatric, psychological and medical material.
68I received two reports from Dr Lawrence Blumberg, consultant psychiatrist, who you first saw in Perth in 2017. In an initial letter to the referring doctor dated 14 February 2017, Dr Blumberg gave a brief summary of your psychiatric history. He noted a history of contact with psychiatric services since the age of about 20. He noted the treatment and trialling of numerous combinations of antidepressant medication. He noted a history of experiencing hypomanic episodes.
69Dr Blumberg noted that you had previously seen Dr Anthony Mander, Consultant Psychiatrist, also in Western Australia, approximately 12 months prior, who had diagnosed you with ADHD and prescribed daily dexamphetamine. You reported some positive impact from this medication.
70Dr Blumberg described your signs and symptoms as being consistent with a Bipolar Affective Disorder. He recommended continuing your then current antidepressant medications, namely fluoxetine in combination with moclobemide, and a combination of pharmacological and psychological intervention. Dr Blumberg further prescribed the mood stabilizer Lithium Carbonate (Quilonum) daily. You also continued with the dexamphetamine.
71In 2020 you commenced seeing Dr Luis Riebl, psychiatrist, who I understand is based at the Millswyn Clinic in South Yarra, upon referral. I received a report based on the clinical care that he provided to you dated 2 June 2022.
72Dr Riebl noted numerous diagnoses, including Bipolar Affective Disorder, Complex Post-traumatic Stress Disorder, Attention Deficit Disorder and Autism Spectrum Disorder.
73Although Dr Riebl placed caveats on his own report as being based on observations recorded for the purpose of providing clinical care and not with a view of producing a forensic report, however Dr Riebl did provide some discussion of your developmental history and interpretation of your behaviours during the periods of 2014 and 2015. Without relying on the comments of Dr Riebl to any significant extent, I do note with interest Dr Riebl's description of the extraordinary event of you discovering your mother attempting to commit suicide as an 11 year old child, Dr Riebl's comments about your apparent response to that event and the likely impact upon you as a very young child, and the comparison he makes with the more recent event of your mother's passing and your response to that.
74I also note the Dr Riebl report provides support for the opinion that a period of incarceration would 'almost certainly lead to a significant deterioration in [your] mental state and possibly acutely exacerbate chronically recurring suicidality.'
75Associate Professor Andrew Carroll, Consultant Forensic Psychiatrist, gave evidence at the plea hearing. I also received a report from Dr Carroll dated 1 June 2022. I note Dr Carroll is a Consultant Forensic Psychiatrist with Forensicare, which is also known as the Victorian Institute of Forensic Mental Health. He has worked extensively in prisons throughout Victoria for over 20 years. He is most recently the visiting psychiatrist at Hopkins Correctional Centre.
76Given the complexity of this matter I see it as necessary to set out Dr Carroll's evidence in some detail.
77Commencing by reference to Dr Carroll's written report, I note that Dr Carroll was provided with previous psychiatric material including the reports of Dr Mander and Dr Bloomberg. As I understand it, Dr Carroll read the report of Dr Riebl shortly before giving evidence at the plea hearing in this matter and he made some comments in his evidence about that fact.
78Dr Carroll provided an extensive review of your developmental and psychiatric history, and treatment history. Your treatment includes transcranial magnetic stimulation in 2016; a 4-week inpatient admission at the Albert Road Clinic in September 2021 where you received a course of ECT. You received 2-3 sessions per week of unilateral ECT, followed by weekly maintenance ECT for some 6 weeks, which you found to be helpful. You have also attended at the Frankston Pain Management Clinic where you received ketamine transfusions for treatment resistant depression. As I understand it, you to have received ketamine transfusions at different times between 2018 and 2021 which you have found to be helpful.
79Dr Carroll noted your past history of trialling different combinations of medication. He noted your regime at the time of his report as being in receipt of the antidepressant medications citalopram and Moclobemide, in addition to the drug Lyrica daily and dexamphetamine daily.
80On review of your family and developmental history, Dr Carroll stated the opinion that there is a 'very significant genetic loading for problems with anxiety and depression, as well as suicide risk'. He notes your experience of mental health symptoms commencing in early childhood, and features consistent with autism, although Dr Carroll is unable himself to formally diagnose an autism spectrum disorder.
81Dr Carroll noted the previous diagnosis of attention deficit disorder, and expressed the opinion that this has likely been present, untreated, from childhood onwards. He notes that this now appears to respond well to medication.
82Dr Carroll disagreed with previous diagnoses of Dr Mander and Dr Blomberg. Dr Carroll expressed the opinion that your history and presentation best fits with a diagnosis of 'Persistent Depressive Disorder (Dysthymia) with anxious distress' together with a Recurrent Major Depressive Disorder. This combination of problems is referred to by Dr Carroll as a 'Double Depression', in that it involves a persistent baseline level of depression of mood and anxiety, which never entirely remits, and which has been present from childhood. That state combines with, at times, much more severe Major Depressive Episodes. Dr Carroll states in his report that there are likely both genetic and developmental aetiological factors of relevance.
83In the written report, Dr Carroll states the opinion that your Persistent Depressive Disorder was likely present throughout the time of the offending. Your mood fluctuated over the relevant time, and it is not possible to reliably ascertain whether you were, in addition, suffering from a Major Depressive Disorder for some or all of that period of time.
84Dr Carroll stated that your ADD was untreated at that time and was likely to have been clinically active.
85In terms of the nature of the offending, Dr Carroll noted that your offending was sustained over a period of many months, it was organised and goal-directed, resulting in clear financial gains.
86Dr Carroll noted the difficulties in making this assessment, but considers it more likely than not that your psychiatric symptoms played a contributory role in the offending. Your persistently lowered mood was temporarily improved by your public success in online forums. Similarly, the money that you were making for friends and family led them to hold you in high regard with consequent beneficial effects on your fragile self-esteem and mood. Dr Carroll states that it is also more likely than not that the effects of your, at the time untreated, ADD was relevant in that racing thoughts, insomnia and associated alcohol use had an adverse impact on your capacity for prudent judgement, moral reasoning and clear thinking, and hence a moderate disinhibitory effect.
87Dr Carroll stated that you are currently suffering from depressive symptoms of a moderate severity.
88In terms of the relationship between your mental health condition and potential imprisonment, Dr Carroll stated that you would find imprisonment very stressful for a number of reasons. The socially challenging environment of prison would be especially difficult for you to cope with due to your persistent depressive and anxiety symptoms.
89You would find particularly stressful the estrangement from your young son. I also note, as an aside, Dr Carroll's comment that in general, separation from a key attachment figure, in this case the father, at such a critical developmental period, is known to place children at heightened risk of long-term adverse sequelae of various kinds.
90Dr Carroll also commented extensively on your varying responses to medications. You are currently somewhat stable on a combination of pharmacological and other treatments. Your antidepressant medication would most likely be able to continue in a custodial environment. However, there are significant barriers to the provision of the drugs dexamphetamine and Lyrica within the prison system. In short compass, it appears unlikely that you would be able to continue receipt of these medications in prison.
91Dr Carroll also notes the unavailability of treatments such as ECT and ketamine infusions. Taking all these matters into account, Dr Carroll expressed the opinion that it is more likely than not that your depressive condition would deteriorate further in the context of imprisonment, and for that reason imprisonment would be substantially more difficult for you than for a person without an underlying psychiatric disorder.
92Dr Carroll also gave evidence at the plea hearing where he expanded upon a number of his opinions. By reference to the term 'genetic loading', Dr Carroll described a strong family history of depression and suicide, in combination with various adverse childhood experiences. He described a number of overlapping conditions, all of which are neurodevelopmental.
93Dr Carroll explained his diagnosis and his divergence from the opinions of previous treating psychiatrists. Insofar as the material before me provides some variation in opinion about diagnoses, I proceed on the basis that I accept Dr Carroll's evidence about diagnosis of your mental health conditions.
94Dr Carroll elaborated on the relationship between your mental health condition and potential imprisonment. He stated that your neurodevelopmental challenges would make you a vulnerable prisoner. Even in a protection wing. There are still levels of vulnerability, and prison would be a major stressor. When asked to expand upon the basis for that vulnerability, he said the following:
'… the fundamental thing is the kind of autistic type features that he's – he's socially you know, not greatly skilled. He's anxious. There are certain oddities there. Prisoners pick up on that very quickly. Other prisoners.'
And further
'… he's already a misfit in broader society. If you put someone like Mr Govinda in the hothouse of a prison where… you can't separate yourself off from sensory stimulation…. He will find the whole prison environment very confusing and very distressing. And lots of prisoners do, but I think the extent to which he will be – he will find the environment challenging is worse, much worse than the average prisoner, even an average first time prisoner. Because of those neurodevelopmental problems, those oddities of how he appears and those oddities of how he understands the world'.
95Dr Carroll also gave evidence about the availability of treatments within the prison system. The unavailability of ECT and ketamine transfusions, and although you may not need those at the moment, they have been appropriate in the past in response to severe episodes of depression.
96Dr Carroll also discussed the difficulties with you receiving the drugs Dexamphetamine and Lyrica within the prison system. Dr Carrol gave this evidence. He said –
'I think Mr Govinda would be exquisitely vulnerable to being stood over, bullied, possibly subject to threats of violence if he were to be prescribed Lyrica. I think that's a very sad indictment on how unsafe our prisons systems are but that's the pragmatics and reality of the situation. Even if he is in a protection wing, because of course you know, protection doesn't mean you're on your own. You'd still be associating with other prisoners.'
97His evidence, in short compass, seems to be that you would not be able to receive Lyrica in prison. It is unlikely that you would continue to receive dexamphetamine in prison, and more likely that you would be transferred onto a drug called lisdexamphetamine, also known as Vyvanse, which although still likely to create some vulnerability, is considered a less valued drug within the prison system. Although Dr Carroll notes your report of a previous trial of the drug Vyvanse without success.
98I pause to note here that I also received two affidavits from Scott Swanwick dated 29 November 2022 and 1 December 2022. Those affidavits provide information about the nature of health and mental health care services provided in prisons in the State of Victoria. I note that neither counsel drew me in any detailed way to those affidavits, nor took me to any particular parts of their contents, or made any submissions about them. In circumstances where I have received extensive evidence from Dr Carroll about matters that relate to the conditions and circumstances of custody, and the availability of mental health treatments in custody, I will proceed on the basis that I accept Dr Carroll's evidence about these matters.
99Dr Carroll observed that while a huge proportion of prisoners have mental health problems, he considers that a much smaller proportion would have mental health problems of the complexity and chronicity that are seen in your case.
100Taking everything into account, Dr Carroll stated that he considers it much more likely than not that you would fall into a relapse of a major depressive episode on top of your chronic dysthymia in the event of imprisonment. The basis for that opinion was stated as –
'first is the stress of being away from his son, away from his usual community supports, friends, family, and the stress of being in prison. The second reason… the sort of gross mismatch between a man with limited social skills because of his neurodevelopmental challenges, his difficulties in understanding perspectives of other people, which would make him a particularly vulnerable prisoner, and then the third reason is that I consider it much more likely than not that there will be substantial changes to his pharmacological regime which would be inherently destabilising.'
101Under cross examination from Mr Manning, Dr Carroll gave evidence that your persistent depressive disorder according to DSM-5 criteria would have been diagnosable from adolescence onwards.
102In terms of linking the mental health condition with the period of time of the offending, Dr Carroll stated the following:
'if a person is depressed, then clearly they're looking for anything at all just to give them that little boost of pleasure, that little boost of self-esteem as well. [The] activities… that comprise the offending clearly resulted in enhanced self-esteem and an enhanced sense of efficacy in the world and enhanced sense of mastery over his environment in a world that he probably never experienced before. And so for someone who is in a depressed state that will be particularly highly valued. [For that reason] I say that there was some modest distortion of his judgement.'
103In relation to your ADHD, Dr Carroll stated:
'it was untreated. It would have had at least a moderate impact on [your] functioning. It was having an effect on [your] emotional regulation as well as [your] ability for organisation, although [he notes that] you were still clearly functioning to a large degree.'
104Mr Manning put to Dr Carroll that in respect to success in online user forums and making money for friends and family, they would both appear to be outcome based, and that might explain a motive for your offending. Dr Carroll stated that the mood is improved by the behaviour, therefore the behaviour is likely to continue, 'in the context of a man who was more desperate to boost his mood because of the depressive disorder'.
105Dr Carroll also commented on the condition of ADD and the impairment of functioning. In re-examination, he stated:
'Treatment for ADD hinges on boosting dopamine levels'. 'For a person with untreated ADD, and depression would have actually made this worse, dopamine functioning is impaired, and there will be a tendency to do what you can to get that little boost of dopamine going.'
106Dr Carroll stated that:
'the cognitive aspect, the judgement side, can very easily get overridden by the emotional high of – just that feedback.' [He stated that] 'I think it affected – and I'm happy to – to opine on moral reasoning as opposed to moral culpability, I think it affected his moral reasoning in the way that was ultimately very unhelpful… he was getting such a boost from doing what he was doing that he was able to kind of kid himself and enter into some kind of denial and minimisation strategies as to the sort of cognitive arguments to countervail that.'
107Returning to defence submissions at the plea hearing, Mr Dunn acknowledged that anything that disrupts the integrity of the market is vital to how the market works, and has the potential to impact investors both locally and internationally. Mr Dunn conceded that a term of imprisonment is appropriate in all the circumstances. He submitted that a term of imprisonment within the range of three years that is capable of being dealt with by way of a recognisance release order is appropriate.
108In relation to whether you are required to serve any of that time in custody or not, Mr Dunn referred to the case of Gregory, and the quotes in that judgement from Bulfin, and the reliance placed on those cases by the Prosecution. Mr Dunn referred me to the statement that:
'White collar criminals are likely to be rational, profit seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished.'
109Mr Dunn submitted that you are not a professional broker or banker or a sophisticated investor. You have complex and serious mental health issues. And general and specific deterrence should be appropriately moderated in your case.
110Mr Dunn urged me to take the view that a term of imprisonment within 3 years with your immediate release on a recognisance release order is justified and appropriate in all the circumstances of this case.
111At the plea hearing, Mr Manning submitted that although it is accepted that you have no formal trading qualifications, and are self-taught, the prosecution submission is that this is still highly sophisticated offending. Notwithstanding clear mental health issues, you are referred to by Dr Riebl as a man of formidable intelligence. You were not an inexperienced trader. You have traded successfully and continue to trade on the stock market for a substantial period of time and to live, at least to some extent, off the income from that source.
112Your conduct involved an understanding of the market and how to manipulate it. Your written diary notes indicate an understanding of strategy to manipulate the market by reference to market depth indicators, and your methods were working. You operated 13 different accounts. You traded daily with active monitoring. There were a significant number of steps involved in your activities and required to be undertaken in order to execute the offending conduct.
113Mr Manning submitted that high-volume low value stocks is often a characteristic of this type of offending because the impact is disproportionately high compared to the amount of money involved and to a large extent that is how the offending was able to be achieved, and the volume of trading was what created the volatility and facilitated the manipulation of the market. Volume was necessary because of the low profit margin and it was volume that enabled profits to be realised with any real capacity.
114Mr Manning also submitted that there is a particular criminality in the overlap between different charges. There is criminality in the underlying transactions, and then additional and related criminality in the dissemination charges.
115Mr Manning maintained the submission that the need for general deterrence is significant, and that specific deterrence remains relevant.
Analysis
116I turn to the analysis of these matters which I commence by reference to the matters set out in s16A of the Crimes Act (Cth) 1914.
117I have regard to the maximum penalties for the offences, which is 10 years for each of the offences before this court.
118I received a table of sentences from the prosecution which I have read and I take into account. As far as possible, I have regard to current sentencing practices for similar offences under Division 2 of Part 7.10 of the Act.
119I accept in large part the characterisation of the offending submitted by Mr Manning in both the written and oral submissions before this court. This was complex and sophisticated offending that was protracted over many months. There are a number of dimensions to the criminality. You were not a professionally trained broker or stock trader, but your conduct still involved a level of skill and ability. You demonstrated in-depth knowledge of the market and methods to manipulate it.
120I accept that the purpose of the offence created by s1041B is to protect the market for securities against activities that may result in artificial or managed manipulation. The market must reflect forces of genuine supply and demand, and participants in the market are entitled to assume that transactions are being made between genuine buyers and sellers and not for the purpose of setting or maintaining a particular price.
121Your conduct contrary to this section was sustained and purpose driven and involved a level of planning and detail in its execution. I accept that your conduct and its potential impact on the market was not permanent, it was temporal and confined to the orders that you placed. But it was not fleeting either and its impact had the potential to extend beyond the particular stocks, the subject of orders you placed. Conduct of this kind has the potential to undermine the integrity of the market as a whole and its attractiveness to local and overseas investment.
122As I noted during the course of the plea hearing, the fact that a part of any profits gained were shared amongst other account holders I do not view as a matter in mitigation or limitation of your culpability.
123In relation to the offences under s1041D, although it is not possible to discern the impact of your offending upon the market, the true gravamen of this offending is the conduct of circulating or disseminating information about the market. Your posts compromised the integrity of the market by seeking to increase demand for a security based on false information.
124You had a substantial following on HotCopper, which you worked to cultivate over several years. That following was based on trust, and the assumption that those who were following and reading your posts trusted that the information that was disseminated was genuine. That trust was cultivated and used as part of a strategy designed to bring about an illegal outcome.
125I also accept that there is an interrelationship between the three different offences, that being the 1041B and the 1041D offences, in that you placed prop bids against stocks, engaged in wash trades and simultaneously disseminated false information in relation to the same stocks.
126Overall I am required to have regard to the nature and the circumstances of the offending and I take the view that this is serious offending.
127An assessment of your subjective moral culpability is a more complex exercise in this case and requires me to consider the extensive psychological and psychiatric material that is before the court.
128I accept the evidence of Dr Andrew Carrol. I accept that you have a long and complex mental health history. I accept that there is some link, as described by Dr Carroll, between your mental health condition and the offending behaviour, although I note the limitations placed on that assessment by Dr Carroll.
129I note the evidence of Dr Carroll that your untreated ADD and underlying depression are likely to have affected your ability to make prudent judgement; affected your moral reasoning; and affected your ability to weigh things up.
130When considering the principles discussed by the Court of Appeal in Verdins, I have regard to comments of the Court in that judgment to the effect that sentencing courts must look beyond labels and carefully consider how the particular condition is likely to have affected the mental functioning of the particular offender in the particular circumstances – that is, at the time of the offending or in the lead up to it – or is likely to affect him or her in the future. I also note and have particular regard to the discussion in that decision about the impact of prison on the mentally ill offender.
131Based on the evidence of Dr Carroll, I am satisfied that there was a causal link between your mental health condition and your offending behaviour. Your offending of course was still organised and goal directed behaviour, with clear instrumental gains in the form of financial remuneration.
132However, I am satisfied that your mental health condition impaired to some extent your reasoning and judgement. I am satisfied that your offending was motivated to some extent by your desire for recognition and positive feedback. And as Dr Carroll put it: to boost self-esteem and provide a greater sense of efficacy in the world and an enhanced sense of mastery over your environment, amongst other purposes.
133To this extent, I do not see your offending as being entirely rational, or motivated purely by the desire for financial profit and gain. I do not see you entirely in the light of the typical white-collar criminal who is likely to be a rational, profit-seeking individual, who can weigh the benefits of committing a crime against the costs of being caught and punished.
134This of course does not mean that your moral culpability is eliminated. However, I am prepared to take the view that there should be some moderate moderation of the assessment of your moral culpability for the offending based on the nature of your mental health condition at the time of the offending. This assessment does affect the ultimate determination of the punishment that is just in all the circumstances. It provides a basis for some moderate moderation of the extent to which general deterrence should factor in the sentence.
135I place considerable weight on the evidence of Dr Carroll about the current state of your mental health, against the backdrop of your long-standing mental health history. As I see it, there is a particular vulnerability to your present condition. This also provides a basis for some moderation of the extent to which general deterrence should factor in the sentence.
136These matters will also have a bearing on the kind of sentence that is appropriate to be imposed and the circumstances in which it should be served.
137Moreover, the evidence concerning the current state of your mental health is of great relevance to my assessment of the overall appropriate penalty at this time. Given the extensive nature of the evidence that I heard from Dr Carroll about the likely impact of imprisonment upon you, and about the likelihood that a term of imprisonment would have a significant adverse effect on your mental health, it seems to me that the fifth and sixth limbs of Verdins apply with very considerable force in this case.
138In regard to more general matters in mitigation, I accept that you cooperated with investigative authorities during a lengthy period of negotiation. You accepted a plea brief in relation to the matter, and pleaded guilty at what appears to be an early stage of the proceedings. I accept that those matters are reflective of remorse for the offending, they reflect acceptance of responsibility, and demonstrate a willingness to facilitate the course of justice.
139
Your plea of guilty has significant utilitarian value in this case. Although the case against you may have been strong, any trial in this matter would have been lengthy and complex. Your plea of guilty was entered in the Magistrates' Court in November 2021. That was of course during the currency of the
COVID-19 pandemic and associated lockdowns in the State of Victoria. It is now well known and understood that the criminal justice system in the State of Victoria was severely impacted by the COVID-19 pandemic and consequent lockdowns and a backlog in criminal trials developed, creating what was described by the Court of Appeal as being nothing short of a state of crisis, requiring a response from the courts.
140In Worboyes v The Queen,[4] Court of Appeal provided significant guidance to sentencing judges about the nature of the additional reduction in sentence to flow from a plea of guilty during the period of the COVID-19 pandemic in the State of Victoria. I will not repeat those statements here. Suffice to say that I have read, and have close regard to paragraphs 35-39 of that decision in Worboyes and I intend to impose a significant reduction in the sentence that you are about to receive as compared to the sentence that you would have received had you not pleaded guilty and but for the principles discussed in Worboyes.
[4] [2021] VSCA 169.
141You are now a 42-year-old man. You have no prior criminal convictions. I have read the personal references that were provided to the court on your behalf. They provide a considerable amount of background information and inform the overall picture of your personal history, and I take them into account in that way. In accordance with authority, I give limited weight to the matter of your prior good character.
142I accept that there has been considerable delay in this matter coming before the courts and delay in the finalisation of this sentence. Delay is of course a complex factor, insofar as it may provide a basis for mitigation. I accept the principles advanced by the prosecution in relation to the matter of delay. Ultimately, I accept that one way or another this matter has been hanging over your head for a very long time and I accept that this would have created a great sense of uncertainty and anxiety, particularly for a person with your underlying mental health conditions.
143You have a young son who is at a particularly vulnerable developmental stage. I accept that you are working hard to maintain a positive relationship with him. Of course imprisonment, for any individual, will rarely exist in isolation. There will almost always be impact upon others. The impact that your imprisonment would have on your son is not a matter that I see as being able to have any significant impact on the outcome of this sentencing exercise, one way or the other however, it is a matter that I take into account in the overall synthesis.
144I was informed by both parties that there have been no further or outstanding charges against you. You continue to trade in the share market, and you continue to receive treatment for your mental health conditions. Given the relationship that I have accepted that exists between your mental health conditions and the offending conduct, there must be some caution about your future prospects of rehabilitation. However, I am prepared to assess your prospects of rehabilitation as being positive, although your continued mental health treatment remains an important factor in your rehabilitation.
145Given those findings that I have made about your mental health, and your prospects of rehabilitation, I do not regard specific deterrence as looming large in the sentence that I must impose. However, I do still regard specific deterrence as having some not insignificant role to play in the sentence, and I intend to give it some weight as a sentencing objective.
146As is often the case, particularly for offending of this kind, the sentencing task is a complex one. It involves balancing a number of significant but competing sentencing considerations.
147This is serious offending. And notwithstanding the findings that I have made about your mental health, both present and historically, your moral culpability for the offending is far from extinguished.
148As I have indicated, I am prepared to take the view that some moderation of punishment, denunciation, and general and specific deterrence are appropriate. However, these sentencing objectives are also far from extinguished.
149I must impose a sentence upon you today that provides a level of punishment, denunciation and general and specific deterrence, but, as I have stated, I will moderate those sentencing objectives as a result of the findings that I have made about your mental health condition and its relationship to the sentence that I am about to impose.
150Towards the conclusion of the plea hearing I invited submissions as to the availability and appropriateness of a financial penalty being imposed either instead of, or in addition to, a term of imprisonment.
151I received a brief but detailed written submission from the prosecution dated 31 January 2023. That submission referred me to a number of cases that either imposed a financial penalty for broadly similar offending, or provided some discussion about the principles relating to the imposition of financial penalties generally, in addition to imprisonment, whether immediate or suspended.
152I note the several cases referred to in the prosecution written submission about this matter that state that caution should be exercised in relation to the imposition of financial penalties and the basis and reasons for such caution. I take that caution into account. However, there does seem to me to be some precedent for the approach that a financial penalty, in addition to the imposition of a term of imprisonment, whether the term of imprisonment requires actual prison time to be served or not, can be an appropriate way of meeting the need for just punishment as well as general and specific deterrence, in appropriate cases.
153I also note the reasoning of His Honour Justice Nettle in The Queen v Bernstein,[5] a Victorian case involving the sentencing of a legal practitioner for theft, obtaining property by deception and deficiency in trust account charges. In deciding whether to wholly suspend the terms of imprisonment imposed, His Honour found factors pointing each way to be evenly balanced, and that a wholly suspended sentence on its own would not be sufficient, but a wholly suspended sentence with a fine imposed in addition was sufficient to meet the necessary sentencing objectives.
[5] [2008] VSC 254.
154I made an enquiry of Mr Dunn at the plea hearing about your present financial means and circumstances, and I received some information about those matters.
155The prosecution submitted that there should be a degree of cumulation between the charges to reflect the distinct and different forms of offending. I accept that submission, however I am also of the view that the nature of your offending is such that I must look at the totality of the offending over the relevant period of time, and impose an overall sentence that reflects the totality of that offending.
156You fall to be sentenced for 42 charges in total, relating to 3 different types of offence. All offences carry the same maximum penalty of 10 years imprisonment.
157I also pause here to note that neither party addressed me on whether I should view some charges as being more or less serious examples of the relevant offences. I have considered carefully the facts relating to each charge, and I note that the conduct, the subject of each charge, could be assessed by reference to a number of different axes of analysis. Those could be said to include: the number of transactions; the number of posts made; the nature and content of posts; the volume of trades; price; percentage of daily trading for that stock; the relationship between trades and posts. I also note in this regard that in assessing the seriousness of the offending as a whole and also the assessment of individual instances of offending, I have regard to the matters that were set out by the prosecution as factors informing the assessment of the gravity of the offending.
158Given the nature of the charges and the gravamen of the offending in this case, and given the variation in each of the above axes of analysis as between charges, I have come to the view that it is not meaningful to seek to distinguish the level of seriousness as between charges or to impose different terms of imprisonment in relation to each charge.
159Again, I am heavily guided by looking at the totality of your offending and imposing a sentence that reflects that totality.
160I will state at this point that I intend to impose terms of imprisonment together with a financial penalty. I have structured the sentence by imposing what I see as appropriate individual terms of imprisonment with some cumulation as between sentences. As will shortly be seen, that will arrive at a total sentence that falls within three years and therefore is capable of being subject to a recognisance release order.
161I have carefully considered whether you should be required to serve a portion of this sentence in custody before release, or whether to order your immediate release by recognisance release order. After much consideration I have come to the view that in the particular and complex circumstances of this case, and for the reasons that I have endeavoured to outline in these reasons for sentence, the balance is appropriately struck by ordering your immediate release upon recognisance release order, together with the imposition of a significant financial penalty.
162In my view, such a sentence is capable of imposing just punishment for the offending. It will denounce your conduct and act as a deterrent both to you and to others who would be minded to offend in this or a similar way in the future. But it will also take account of your very complex and particular personal circumstances.163Mr Govinda, I will ask you to stand now please.
164You will be sentenced as follows –
(a) On each of the 18 charges pursuant to s1041B(1)(a), you will be sentenced to individual terms of 12 months imprisonment together with a fine of 6 penalty units in relation to each charge. In relation to each of those terms of imprisonment they will be served concurrently with each other, and this will be achieved by having those terms of imprisonment commencing today.
(b) In relation to each of the 5 charges pursuant to s1041B(1)(b), you will be sentenced to individual terms of 12 months imprisonment together with a fine of 6 penalty units in relation to each charge. Each of these terms of imprisonment will be served concurrently with each other however, what I will express as partly cumulative, in that 6 months of each of those sentences will be served cumulatively upon the sentences imposed for the offences contrary to s1041B(1)(a). That will be achieved by having each of these sentences to commence on 3 November 2023.
(c) On each of the 19 charges pursuant to s1041D, you will be sentenced to individual terms of 12 months imprisonment together with a fine of 6 penalty units for each charge. Each of those sentences will be served concurrently with each other but cumulative upon the sentences imposed for all charges above. That will be achieved by these sentences commencing on 3 November 2024.
(d) As I see it, and it is my intention that this will amount to a period of 30 months' imprisonment from today.
165Under s20(1)(b) of the Crime Act 1914 (Cth), I have a discretion as to whether you will be released immediately or after having served a specified period of imprisonment. For the reasons that I have already stated, I have come to the view that it is appropriate to release you immediately upon you giving a recognisance in the sum of $5,000 and your undertaking to be of good behaviour for a period of 5 years.
166I emphasise that your release immediately is conditional upon you giving an undertaking to be of good behaviour for a period of 5 years and with the security by recognisance of $5,000.
167The purpose of these orders in their totality is to punish you for the crimes you have committed, and to deter both you and others who might be minded to commit this or similar offences in the future.
168The effect of my order is that you will have a sentence of imprisonment of 30 months hanging over your head from today for a period of 5 years.
169During the 5 year period commencing today, you must not commit another offence that is punishable by imprisonment. If you were to do so, that would constitute a breach of your recognisance.
170If this order is breached, you would be brought back in front of this Court for resentencing in respect of the term of imprisonment, being 30 months. You may be ordered to serve that term of imprisonment in custody and be required to forfeit the security of $5,000.
171So, for clarity I will also state that the combined effect of the monetary fine of 6 penalty units across 42 charges is the combined total of 252 penalty units, a penalty unit being $170, gives a total monetary penalty of $42,840.
172In relation to section 6AAA of the Sentencing Act, I declare that had you not pleaded guilty to these charges I would have sentenced you to a period of four years imprisonment with a non-parole period of two years.
173You may be seated for the moment, Mr Govinda.
174Ms Thies, my associate will now take that order to Mr Govinda. I am happy if you or your instructor wish to accompany my associate.
175MS THIES: Thank you. If I could accompany your associate, thank you, Your Honour.
176MS THIES: He has now signed that, Your Honour.
177HIS HONOUR: Yes, all right, thank you. Mr Govinda, you understand the effect of the order you have just signed?
178OFFENDER: Yes, 100 per cent, thank you.
179HIS HONOUR: Yes, all right, thank you. Well I thank both counsel for attending today and all counsel for their assistance during the course of the matter. Thank you, we will adjourn the court.
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