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Feb 26, 2014

Will ASIC try again on Gay's Gunns insider trading proceeds?

Former Gunns chairman John Gay isn't off the hook yet: ASIC has revealed in Senate Estimates it could still prosecute after his insider trading conviction.

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The Commonwealth Director of Public Prosecutions may revisit prosecuting former Gunns chairman John Gay to retrieve up to $750,000 in funds after his conviction for insider trading of shares in the timber company, the Australian Securities and Investments Commission has revealed.

In response to questions from Tasmanian Greens senator Peter Whish-Wilson at a Senate Estimates hearing this morning, ASIC officials said they were “in a dialogue” with the CDPP over a proceeds of crime action against Gaye, which was abandoned by the Australian Federal Police in January.

Actions under Proceeds of Crime legislation can be initiated both by the AFP, where a Criminal Assets Confiscation Taskforce was established in 2011, and by the CDPP. ASIC officials this morning appeared to suggest some unhappiness with the AFP decision, stating that they thought there was reason to pursue the action.

“Our objective is to pursue whatever avenues we can to recover monies to the best of our abilities on this particular issue,” ASIC chairman Greg Medcraft said to Whish-Wilson, who has pursued the issue via Estimates hearings.

ASIC has come under widespread criticism for its apparent reluctance to aggressively pursue white-collar crime, with the case of Gay, who admitted to insider trading, being a stand-out example: Gay was given a $50,000 dollar fine but no prison sentence, and no appeal was lodged against the decision by prosecutors; the decision by the AFP to let him keep the proceeds of insider trading reinforced the impression.

A separate Senate inquiry is currently underway into the ASIC’s performance following revelations the regulator ignored information from whistleblowers about misconduct within the Commonwealth Bank.

Bernard Keane — Politics Editor

Bernard Keane

Politics Editor

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

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