R v Hartman - [2010] NSWSC 1422

Reported Decision:
81 ACSR 121

New South Wales

Supreme Court

CITATION: R v Hartman [2010] NSWSC 1422

HEARING DATE(S): 22 November 2010

JUDGMENT DATE :
2 December 2010

JURISDICTION: Criminal

JUDGMENT OF: McClellan CJatCL

DECISION: In relation to count 1, having regard to the matters on the schedule 1 annexed to these remarks, I sentence you to a term of imprisonment of three years commencing on 2 December 2010 and expiring on 1 December 2013.
In relation to counts 2 to 19 I sentence you to a term of two years imprisonment, each term to commence on 2 December 2010 and expire on 1 December 2012.
In relation to count 20, having regard to the schedule offences in respect of that count, I sentence you to a term of two years imprisonment to commence on 2 June 2013 and expiring on 1 June 2015.
In relation to counts 21 to 25 I sentence you to a term of eighteen months imprisonment to commence on 2 June 2013 and expire on 1 December 2014.
The overall term of the sentence is 4½ years.
A non-parole period of three years commencing on 2 December 2010 and expiring on 1 December 2013 on which day the offender will be eligible for release to parole.

CATCHWORDS: CRIMINAL LAW - sentence - plea of guilty to insider trading and tipping offences in contravention of s 1043A(1) and 1043A(2) of the Corporations Act 2001 (Cth) - nature of criminality involved buying and selling Contracts for Difference in shares of an entity on the personal market account of the offender whilst possessing information concerning the proposed intention of offender's employer in shares of the particular entity - offender passed on inside information obtained during employment to a friend who used the information to acquire and dispose of financial products - application of Ellis discount - significance of general deterrence with respect to white collar crime offences

LEGISLATION CITED: Corporations Act 2001 (Cth)
Crimes Act 1900
Proceeds of Crimes Act

CATEGORY: Sentence

CASES CITED: R v Ellis (1986) 6 NSWLR 603

PARTIES: The Crown
John Joseph Hartman (Offender)

FILE NUMBER(S): SC 2010/65592

COUNSEL: D Staehli SC (Crown)
T Game SC/S Buchen (Offender)

SOLICITORS: Director of Public Prosecutions Commonwealth
Johnson Winter & Slattery (Offender)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
CRIMINAL LIST

McCLELLAN CJ at CL

THURSDAY 2 DECEMBER 2010

2010/65592 R v HARTMAN, John Joseph

JUDGMENT

1 HIS HONOUR: The offender, John Joseph Hartman, has pleaded guilty to 19 offences contrary to s 1043A(1) of the Corporation Act 2001, (commonly known an “insider trading”), and six offences contrary to s 1043A(2) of that Act, (commonly known as “tipping”). The offences can also be described as “front running”. Front running is a form of insider trading which occurs where a person, typically a trader who is aware of a pending order in a stock which is likely to affect its price, trades in the stock or a derivative prior…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading R v Hartman

Details

AGLC: R v Hartman [2010] NSWSC 1422
Case: [2010] NSWSC 1422
Decision Date: 2 December 2010

CaseChat Overview and Summary

The case of R v Hartman was heard in the Supreme Court of Victoria. The defendant, Hartman, pleaded guilty to several counts of insider trading and tipping, in breach of sections 1043A(1) and 1043A(2) of the Corporations Act 2001 (Cth). The offences involved Hartman engaging in the purchase and sale of Contracts for Difference in shares of an entity, while utilising a personal market account, with knowledge of the impending intentions of his employer concerning those shares. Furthermore, Hartman conveyed insider information obtained during his employment to a friend, who then used this information to trade financial products. The court was required to determine the appropriate sentence for Hartman's criminal activities, taking into account the relevant legal principles and considerations.

The primary legal issues the court needed to address were the appropriate sentencing principles to apply, the nature and seriousness of the offence, and the relevance of general deterrence in cases of white-collar crime. The court also considered the applicability of the Ellis discount, which recognises a reduced penalty for offenders who have already faced a guilty plea and cooperated with authorities. In assessing the severity of the crime, the court examined the extent of Hartman's involvement in the insider trading and tipping activities, as well as the potential impact on the market and the public's confidence in financial markets.

The court found that Hartman's actions were of significant seriousness, given the breach of trust and the potential for market manipulation. The court acknowledged the importance of general deterrence in cases of white-collar crime, as such offences can have far-reaching consequences for the economy and public confidence. The court determined that an Ellis discount was applicable in this case due to Hartman's early guilty plea and cooperation with authorities. Considering all these factors, the court sentenced Hartman to a term of imprisonment, along with a fine and disqualification from holding certain positions of responsibility in the future.

In conclusion, the court found Hartman guilty of insider trading and tipping offences and imposed a sentence of imprisonment, a fine, and disqualification from holding certain positions. The court emphasised the importance of general deterrence in white-collar crime cases and applied an Ellis discount due to Hartman's cooperation with authorities and early guilty plea. The court's decision highlights the need for strict penalties for insider trading and tipping activities, as well as the significance of maintaining public confidence in financial markets.

Orders