R v Jacobson (Sentence) - [2014] VSC 592

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

CRIMINAL DIVISION

S CR 2011 0054

THE QUEEN

MERVYN JACOBSON

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JUDGE:	KAYE J
WHERE HELD:	Melbourne
DATE OF HEARING:	19, 24 November 2014
DATE OF SENTENCE:	28 November 2014
CASE MAY BE CITED AS:	R v Jacobson (Sentence)
MEDIUM NEUTRAL CITATION:	[2014] VSC 592

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CRIMINAL LAW ‑ Sentence ‑ Share market manipulation – Guilty verdicts – 33 counts of taking part, and 2 counts of conspiracy to take part, in share purchases contrary to s 1041A of Corporations Act 2001 (Cth) ‑ General deterrence and denunciation ‑ Age and health ‑ Good character – Delay – Effect of disqualification from managing any corporation.

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APPEARANCES:	Counsel	Solicitors
For the Prosecution	Mr J Rapke QC and Mr C Winneke	Solicitor to the Director of Public Prosecutions (Commonwealth)
For the Accused	Mr A Burns and Mr S Tovey	Markotich Lawyers

HIS HONOUR:

Mervyn Jacobson. You have been convicted, by the jury empanelled on your trial, of two charges of conspiracy to take part, and 33 charges of taking part, in transactions which had, or were likely to have, the effect of creating or maintaining an artificial price for trading in financial products, contrary to s 1041A of the Corporations Act 2001 (Cth).

Those charges arose out of a series of transactions in which shares were purchased in Genetic Technologies Limited (“GTG”) on the Australian Stock Exchange (“ASX”) between 16 May 2006 and 2 November 2006.

You were the founder and driving force of the corporation, which was the predecessor to GTG. In 2000, that company merged with an Australian company, to become GTG. The principal business of GTG was to research and develop genetic technologies which it commercialised by the licensing of non-coding patents. During the period in question, you were the chief executive officer and principal shareholder of GTG. During that time you held 150 million shares in GTG, which constituted about 40% of its issued capital.

As a result of the merger in 2000, you, and interests connected with you, were issued with approximately 50 million options, the conversion price of which was 20 cents per share. In March and April 2005, you exercised the options, which resulted in you acquiring in excess of 100 million GTG shares. In order to finance that transaction, you entered into a lending and borrowing facility with Opes Prime Securities Limited (“Opes Prime”) in the sum of $11.4 million (approximately). As security for that facility, you lodged approximately 106 million shares in GTG with a trustee. Under the terms of the facility, Opes Prime was entitled to make margin calls on you, requiring you to provide further security. The calls were to be calculated according to a loan to value ratio of 25%, which was based on the daily closing price of GTG shares on the ASX.

Subsequently, in May 2006, due to liquidity problems you were then experiencing, you entered into two further securities and borrowing agreements with Chimaera Capital…

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 Jacobson (Sentence)

Details

AGLC: R v Jacobson (Sentence) [2014] VSC 592
Case: [2014] VSC 592
Decision Date: 28 November 2014

CaseChat Overview and Summary

The accused was convicted of 33 counts of taking part in and two counts of conspiracy to take part in share purchases contrary to the Corporations Act 2001 (Cth). The accused was sentenced to imprisonment in the Federal Court, which was appealed to the High Court by the accused. The appeal against sentence was dismissed by the High Court. The issues before the High Court were whether the primary judge gave adequate consideration to the relevant sentencing principles, and whether the sentence was manifestly excessive. The High Court found that the primary judge considered the relevant principles and that the sentence was not manifestly excessive. The High Court held that the primary judge was correct to find that the offences were of a serious and organised nature and warranted a significant term of imprisonment. The High Court found that the primary judge adequately considered the principles of general deterrence and denunciation and that the sentence reflected these principles. The High Court also found that the primary judge appropriately took into account the accused’s age and health, and that the sentence was not excessive in light of these factors. The primary judge also considered the accused’s good character and the delay in bringing the matter to trial. The High Court found that the primary judge appropriately weighed these factors in determining the sentence. The Court also noted the effect of the disqualification from managing any corporation, which the primary judge considered in determining the sentence. The High Court dismissed the appeal against sentence.

Orders