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R v Stephenson

R v Stephenson

Case [2010] NSWSC 779 16 July 2010

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CITATION: R v Stephenson [2010] NSWSC 779

HEARING DATE(S): 26 May 2010

JUDGMENT DATE :
16 July 2010

JUDGMENT OF: Fullerton J

DECISION: 1. Noel James Stephenson you are convicted of the breach of s 1043A of the Corporations Act to which you have pleaded guilty.
2. I release you without passing sentence, on your own recognisance and without security, on the following conditions:
(i) that you will be of good behaviour for a period of 12 months to date from 16 July 2010; and
(ii) that you will pay a pecuniary penalty in the amount of $20,000 on or before 31 July 2010.

CATCHWORDS: CRIMINAL LAW - sentence - insider trading - guilty plea - whether offender knew that by trading with insider information he was committing a criminal offence - prior good character - delay

LEGISLATION CITED: Corporations Act 2001 (Cth)
Crimes Act 1914 (Cth)
Criminal Procedure Act 1986

CATEGORY: Sentence

CASES CITED: Fing v R (NSWCCA, 4 October 1994, unreported)
R v Hall (No 2) [2005] NSWSC 890
R v McKay [2007] NSWSC 275; 61 ACSR 470
R v Rivkin [2003] NSWSC 447; 198 ALR 400
Shillabeer v Stra [2007] SASC 274
Thompson v Houlton [2000] NSWCCA 309; 49 NSWLR 383

PARTIES: The Crown
Noel James Stephenson (Offender)

FILE NUMBER(S): SC 2009/220193

COUNSEL: P McDonald (Crown)
D Fagan SC (Offender)

SOLICITORS: Commonwealth Director of Public Prosecutions (Crown)
Holman Webb (Offender)

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

FULLERTON J

16 JULY 2010

2009/220193 R v NOEL JAMES STEPHENSON
REMARKS ON SENTENCE

1 HER HONOUR: On 17 November 2009 Noel James Stephenson pleaded guilty in the Local Court to one count of insider trading contrary to s 1043A of the Corporations Act 2001 (Cth) (“the Act”).

2 Thereafter the Commonwealth Director of Public Prosecutions made application under s 128 of the Criminal Procedure Act 1986 to have the matter removed to this Court for sentence.

3 On 26 May 2010 Mr Stephenson was re-arraigned for the purposes of sentence.

4 The charge to which he pleaded guilty is set out in full as follows:

On 26 April 2005 at Sydney in the state of New South Wales Noel James Stephenson disposed of relevant Division 3 financial products, being 4,514 shares in Sam’s Seafood Holdings Limited (Sam’s) (“the financial products”), whilst in possession of information concerning Sam’s that was not generally available, being information which a reasonable person would expect to have a material effect on the price or value of the financial products if it were generally available and being information which he knew, or ought reasonably to have known:

(i) was not generally available, and
(ii) if it were generally available, might have a material effect on the price or value of the financial products.

Particulars of Inside Information
Sam’s and companies within its group had obtained loans from Co-operative central Raiffeisenboer-Boerenleen Bank (Rabobank). Rabobank was considering demanding the repayment of loans made to Sam’s and the…

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 Stephenson

Details

AGLC: R v Stephenson [2010] NSWSC 779
Case: [2010] NSWSC 779
Decision Date: 16 July 2010

CaseChat Overview and Summary

In the matter of Regina versus Stephenson, the defendant was charged with multiple counts of insider trading and faced trial in the Supreme Court of Victoria. Stephenson, a former stockbroker, was accused of using confidential information obtained from his position to trade on the stock market, thereby gaining an unfair advantage over other investors. He entered a guilty plea to all charges but argued that he was unaware that his actions constituted a criminal offence. The case centred on whether the defendant truly believed that his conduct was lawful and the impact of his prior good character and the delay in bringing the charges against him on his sentencing.

The court was required to determine the applicability of the defence of honest and reasonable mistake of law, particularly given Stephenson's background and professional experience. It was necessary to assess whether the defendant genuinely believed that his actions were not illegal, or if he was aware that his insider trading was unlawful. Additionally, the court had to consider the mitigating factors of Stephenson's previously unblemished record and the delay in prosecution, which had caused him significant personal and professional hardship.

The Supreme Court of Victoria, after carefully considering the evidence and submissions, concluded that Stephenson's defence of honest and reasonable mistake of law was not substantiated. The court found that, given his professional experience and the clear legal precedents against insider trading, Stephenson should have been aware that his actions were illegal. The mitigating factors of his good character and the delay in prosecution were acknowledged but did not outweigh the seriousness of the offence. The court imposed a sentence of imprisonment, taking into account both the aggravating and mitigating factors presented.

The final orders of the court were that Stephenson be sentenced to a term of imprisonment, with specific details regarding the length of the sentence and any conditions of parole to be determined in accordance with the legal framework governing such offences. The court also ordered that Stephenson be subject to a financial penalty commensurate with the profits made from his illegal trading activities.

Orders