2. I order that you be immediately released upon giving security by way of recognisance in the sum of $1000 to be of good behaviour for a period of 2 years commencing today.

Judgment

1On 23 May 2014 the offender Jonathan Moylan pleaded guilty to the following offence:

On about 7 January 2013 at Maules Creek in the State of New South Wales he did disseminate information which was false in a material particular and the information was likely to induce persons in Australia to dispose of financial products, namely shares in Whitehaven Coal Limited, and when he disseminated the information he knew or ought reasonably to have known that it was false in a material particular.

The offence was contrary to s 1041E(1) Corporations Act 2001 (NSW).

2The maximum penalty for this offence is imprisonment for 10 years or a fine of $765,000 or both.

3The information that the offender disseminated was that on 7 January 2013 the Australia and New Zealand Banking Group Limited (ANZ) announced that it had withdrawn its $1.2 billion loan facility to Whitehaven which was primarily intended to be used to develop its Maules Creek Project.

4The Offender disseminated the information by sending an email to 306 recipients at 104 different organisations including 295 recipients at 98 media organisations. The email attached a document that falsely purported to be a media release from ANZ relating to Whitehaven.

5The Offender knew the information was false in a material particular because he knew ANZ had not withdrawn the ANZ facility and had not made any such announcement.

Whitehaven and the Maules Creek project

6Whitehaven is an Australian coal mining company, which has been listed on the Australian Securities Exchange since 1 June 2007. At the opening of trading on 7 January 2013 Whitehaven had 1,014,164,422 issued shares with a total market capitalisation of approximately A$3.56 billion.

7In December 2011, Whitehaven merged with Aston Resources Limited which owned 85% of the Maules Creek Project, a coal mining development located in the Gunnedah Basin of New South Wales.

8On 8 November 2012, Whitehaven issued a public announcement classified as price sensitive via the ASX company announcement platform and the Whitehaven website in which it announced that it had accepted an underwritten offer of a A$1.2 billion senior secured bank facility from ANZ. The ANZ facility represented approximately 90% of Whitehaven's total debt financing. $750 million of the $1.2 billion was allocated to develop the Maules Creek Project.

9An anti-coal mining protest group that called itself Front Line Action on Coal (FLAC) was founded by the Offender and Murray Drechsler. They established a camp on 5 August 2012 in the Leard State Forest in Boggabri near Maules Creek to protest against the Maules Creek Project.

10Between 5 August 2012 and 7 January 2013, the Offender and others in FLAC took certain actions including issuing a number of media releases as part of their opposition to the project. During that period the Offender had accessed the ASX website page more than a dozen times as well as accessing an online forum discussing Whitehaven shares. The offender also accessed media articles which referred to positive and negative news impacting on the share price of Whitehaven. He was aware of, and discussed with others, the movement of the Whitehaven share price following a Whitehaven train derailment, and in relation to a failed takeover by Nathan Tinkler.

Specific planning concerning the offence

11On 4 January 2013, as a result of what he ascertained through a Google search, the Offender accessed the website of "Crazy Domains" and purchased for $27 the internet domain name "anzcorporate.com". He also established the email address "media@anzcorporate.com, providing his own name and personal contact details as part of the registration process.

12On 5 January he set up the email address referred to and subsequently tested it by sending test emails to his personal email addresses and to Mr Drechsler's email address.

13On the same day he accessed the Media Centre page of ANZ's website and viewed two genuine media releases issued by ANZ. He also accessed articles via the internet relating to the finalisation of the ANZ facility.

14Later on 5 January the Offender used his computer to create the false media release.

15Between 7.03 pm and 7.28 pm on 5 January the Offender used his computer to create the false media release. He first inserted an ANZ logo, which he had previously downloaded from the internet, at the top of the false media release. He formatted the release using the same lay-out, font and colour-scheme as the two genuine ANZ media releases he had viewed on the ANZ website.

16He nominated the principal contact for media enquiries as "Toby Kent, Group Head of Corporate Sustainability". Toby Kent was a person actually employed by ANZ with whom the Offender had previously had dealings through his activism against the Maules Creek Project. He listed Mr Kent's email address as media@anzcorporate.com and his mobile telephone number as 0431 289 766, although both were actually the Offender's contact details. He also set up a voicemail message on that mobile phone number in which he identified himself as "Toby Kent from ANZ".

17Consistent with the two genuine ANZ media releases he had viewed, he nominated as a secondary contact for media enquiries the name of another person, Joanne McCulloch, who was actually a Media Relations Advisor at ANZ, with her correct title and contact details included.

18The following day, 6 January, the Offender accessed legislation available on the Austlii legal information website and viewed the Criminal Code Act 1995 (Cth) and the Crimes Act 1900 (NSW), in particular s 250 (which contains the meaning of when a document is false) and s 253 (which creates the offence of forgery).

19On the same day he sent the false media release from the email address media@anzcorporate.com to Mr Drechsler who, when he received it, said words to the effect "it looks okay".

20On the morning of 7 January the Offender researched Australian business media contacts via a number of internet sites.

21At 10.46 am on 7 January the Offender accessed the transcript of an ABC interview with an international activist group known as the "Yes Men". The Offender had previously accessed videos of the Yes Men and their activities on 27 June 2012. The Offender was aware that in 2004 a member of the Yes Men had falsely represented that he was a spokesperson for Dow Chemical Company and appeared on the BBC World television news program. The Offender knew that in that case the media had initially accepted as genuine the spokesperson's announcement that a subsidiary company responsible for the Bhopal chemical disaster would be liquidated and the resulting $12 billion would be given as compensation to victims. That was later revealed to be a hoax.

22At 10.38 am on 7 January the Offender sent from his own email address a document to some 20 individuals associated with FLAC titled "ANZ Week of Action". It was a 12 page document intended to be a guide for activists, with a number of suggested activities to "shame" ANZ, with the stated goal that "If ANZ withdraws their loan, the Maules Creek Coal Mine will not proceed". There was also extensive advice on dealing with the media and police as part of any protest actions.

23At 11.44 am on 7 January, the Offender disseminated the information in the false media release by sending an email from media@anzcorporate.com.

24As noted, the media release contained the ANZ logo on the top right of the document and under the heading "Media Release" it said this:

For Release: 7 January 2013

ANZ divests from Maules Creek Project

ANZ today announced it has withdrawn its $1.2 billion loan facility to Whitehaven Coal, which was primarily intended to develop the Maules Creek Coal Project.

The decision is related to volatility in the global coal market, expected cost blow-outs and ANZ's Corporate Responsibility policy.

ANZ Group Head of Corporate Sustainabillty, Toby Kent, said: "We want our customers to be assured that we will not be investing in coal projects that cause significant dislocation of farmers, unacceptable damage to the environment, or social conflict. The decision to withdraw our loan facility has been made after a careful analysis of reputational risks and analysis of the returns on this mine in the current climate of high volatility in the coal export market."

Whitehaven Coal has been consulted in relation to the decision and the withdrawal of the loan facility became effective yesterday afternoon. The loan facility, which was drawn up on December 21, generated significant customer feedback and will no longer be enforceable.

ANZ is currently undertaking a review of coal and gas investments on productive agricultural lands and areas of high biodiversity.

25As mentioned earlier, in the media release under the words "for media enquiries contact:" appeared the name of Toby Kent, Group Head of Corporate Sustainability with the mobile telephone number 0431 289 766 and the email address mentioned, and the name of Joanne McCulloch as the Media Relations Advisor with apparently genuine telephone numbers and email address. The telephone number given for Mr Kent was the Offender's phone number.

26The recipients of the email and false media release included Fairfax Media, News Limited, Australian Associated Press, various regional newspapers and radio stations as well as the five principal television channels.

27The email was not accompanied by any announcement from Whitehaven issued via the ASX company announcement platform. Nevertheless, from about 11.55 am on 7 January a number of journalists and media organisations published or distributed stories in which the false media release was directly quoted or paraphrased and represented as a genuine media release issued by ANZ, including the following:

(a) At 11.55am the Newcastle Herald posted a brief report based on the false media release on its website. It remained there for ten minutes before being removed when it was ascertained it was a hoax;

(b) At 12.05 pm, AAP sent a "Stock Watch report' to AAP finance news subscribers. At 12.18pm AAP transmitted a story to its digital news subscribers conveying the content of the false media release. After receiving reports from AAP, IRESS Ltd, a provider of technology and data services including related news sources to financial markets participants, forwarded them to its subscribers. About ten minutes later AAP learnt that the false media release was a hoax and took steps to kill the story.

(c) At 12.20 pm, after unsuccessfully attempting to contact a public relations officer at Whitehaven for comment, the Australian Financial Review published a story on its website based on the false media release. About five minutes later it was removed after ANZ advised that it was a hoax.

(d) At 12.24 pm, the original AFR story was forwarded through Bloomberg, a provider of technology and data services including related news sources to financial markets participants. At 12.34pm Bloomberg reported on the drop in share price of Whitehaven Coal reporting that "Whitehaven Plunges After AFR Report ANZ Bank Cancels A$1.2b Loan". Around 8 minutes later, Bloomberg learnt the false media release was a hoax and published a story to that effect.

Trading in Whitehaven shares

28From around 12.18 pm on 7 January the volume of trading in Whitehaven shares increased significantly until 12.41 pm when, at the request of Whitehaven who had learnt of the hoax, its shares were placed in a "pre-open" phase that prevented trading orders being executed.

29During the period between 12.18 pm and 12.41 pm:

(a) 141 individuals and entities traded 2,881,334 Whitehaven shares through 34 different stockbrokers. This was more than 20 times the average volume of trades for Whitehaven shares during the same 23-minute period over the four trading days prior to, and four trading days after, 7 January;

(b) The price of Whitehaven shares fell from $3.515 (at 12.18 pm) to a low of $3.21 (at 12.38 pm), representing a fall of $0.305 or 8.7%, or a reduction in the market capitalisation of Whitehaven by around $300 million.

30The persons who traded included individual investors, brokers acting for clients such as self-managed super funds, managed funds and other wholesale investors.

31At 1.04 pm Whitehaven issued a genuine public announcement titled "WHITEHAVEN COMMENT RE HOAX MEDIA RELEASE' in which it stated:

"Whitehaven Coal Limited has been made aware of a hoax media release suggesting that ANZ has withdrawn its recently announced $1.2 billion banking facility to Whitehaven.

There is no substance to the hoax media release. ANZ has confirmed the release is a hoax."

32At 1.30 pm on that day trading in Whitehaven shares resumed. The opening share price on the ASX was $3.53. At the close of trading that day the share price was $3.50.

33Between 1.30pm and the close of trading for the day, the number of Whitehaven shares traded was 5,664,137. This was more than three times the average volume of trades for Whitehaven shares during that same period for the four trading days prior to, and four trading days after, 7 January.

34The total number of Whitehaven shares traded on 7 January was 9,665,440. This was more than three times the average number of Whitehaven shares traded per day over the four trading days prior to, and four trading days after, 7 January.

35Three groups of investors who traded in Whitehaven shares can be identified:

(a) Some investors sold shares based on the information in the false media release, but subsequently bought shares immediately after the trading halt, thereby mitigating or avoiding any losses (although not taking into account trading fees or tax consequences resulting from those trades);

(b) Some investors sold shares based on the information in the false media release, but were not then made aware of the nature of the hoax or were not otherwise in a position to mitigate their losses once the trading halt was lifted;

(c) Some investors sold shares when the price fell based on an automatic "stop-loss" function of their trading accounts, for example where their investment was funded through a margin facility or was in the form of a leveraged derivative product, and they were not in a position to mitigate their losses once the hoax was revealed.

The Offender's conduct after the issue of the media release

36From around 12.07 pm on 7 January a number of persons, including journalists, telephoned the person they thought was Toby Kent at the telephone number in the false media release.

37At about 12.17 pm Mr Ben Cubby from the Sydney Morning Herald telephoned "Toby Kent" to confirm the content of the press release. The Offender answered the call and identified himself as "Toby Kent". A conversation then ensued as follows:

Mr Cubby: When was Whitehaven told of the bank's decision?'

The Offender: We informed Whitehaven yesterday at about 5pm.

Mr Cubby: Why did the bank make this decision?

The Offender: Volatility in the global coal market, expected cost blow-outs and ANZ's Corporate Responsibility policy.

Mr Cubby: This is a big story. I will call you back in half an hour to run through the details for a story.

38Immediately after speaking with the Offender Mr Cubby sent out a tweet on his Twitter account to around 8,000 followers to the effect: "ANZ withdraws funding from Whitehaven Maules Creek Project". At approximately 12.20 pm, after Mr Cubby learned that the false media release was a hoax, he sent out a further tweet to that effect and deleted the original tweet. He then rang the Offender who again identified himself as "Toby Kent". When Mr Cubby identified himself and challenged the offender saying that he thought it was a hoax, the Offender apologised, disclosed his true name and agreed to a recorded interview.

39During the course of the interview, when the Offender was asked why he did the hoax, he said:

Well we believe that ANZ customers have a right to know where their money is being invested. ANZ Bank has loaned $1.2 billion to put a coal mine in that would be forcing farmers off their land and destroying the largest piece of native vegetation on north west NSW and ANZ customers have a right to know how their money is being used.

40He said that it was similar to the kind of stunt that was pulled by the Yes Men when they made the announcement about Union Carbide winding itself up to pay the victims of the Bhopal disaster. The Offender said that they were putting out the message that "our water, our health, our farmlands, these things are much more valuable than money".

41He was asked by Mr Cubby about whether he had any ethical qualms about lying to the public and he said:

Well, we took a bit of time to make this decision and it wasn't an easy one to make, at the end of the day we apologise to anybody who was affected but we are not going to apologise to Whitehaven Coal for destroying things that are invaluable and that belong to everybody. That impact, that destruction, is the big destruction here.

42At about 11:53 am Stephen Ries, the Senior Manager of Media Relations at ANZ, called the telephone number on the false media release for Toby Kent. He heard the voicemail message identifying the speaker as "Toby Kent from ANZ". Although he left no message a copy of his number was recorded on the Offender's phone. At around 12.19 pm the Offender called Mr Ries and identified himself by saying, "This is Toby Kent from ANZ". Mr Ries replied, "That is remarkable because Toby Kent is sitting right next to me". The Offender replied, "No, this really is Toby Kent from ANZ". Mr Ries replied, "No, you've called the media department at ANZ. I know Toby Kent well. He is English and speaks with an English accent." Mr Ries asked the Offender what group he was with, but the Offender terminated the call.

43At around 12.20 pm, Chris Baker, an investment manager at Caledonia (Private) Investments, became aware from the AFR website about the ANZ withdrawing the facility. Mr Baker instructed a broker to commence selling shares in Whitehaven held by one of Caledonia's investment funds. On further consideration, he became suspicious of the false media release, and at 12.50 pm he telephoned the number given for Toby Kent on the false media release. His call was answered by a male who identified himself as "Toby Kent". Mr Baker identified himself and said "Is this a genuine release?" The Offender replied, "No it is not. It's been established that this is a hoax. But the Maules Creek facility is under review by ANZ". Mr Baker believed he had been speaking to Toby Kent at ANZ.

44At about 2.02 pm, after learning of the hoax, Mr Baker rang again the number on the false press release and asked the Offender, "Is that Toby Kent?" The Offender replied, "Yes this is Toby Kent". When Mr Baker said that he believed the person was Jonathan Moylan, the Offender replied, "Yes, I am Jonathan Moylan". When Mr Baker asked why he had done this, and told the Offender that he had sold shares and probably lost money by doing so, the Offender said, "I did this to show to ANZ Bank customers and shareholders the damage the bank investment would have on the environment".

45At around 12.58 pm the Offender used his computer to create a new media release on behalf of FLAC entitled "ANZ Caught by Spoof". He sent this media release from media@anzcorporate.com to the same addressees as his earlier email which had attached the false media release. This further release said as follows:

Monday January 7 2012 (sic)

A media release purporting to be from the ANZ bank announcing divestment from the Maules Creek Coal Project was in fact put out by opponents of the Maules Creek mine camped in the forest that would be destroyed if the mine went ahead.

ANZ has been under heavy pressure to withdraw from the project but still have maintained their $1.2 billion to Whitehaven Coal.

"ANZ customers have the right to know that their money is being invested in a project which will force farmers off their land and destroy 1,360ha of critically endangered koala habitat," said spokesperson Jonathan Moylan.

"We are determined to continue our campaign on ANZ bank until the bank shifts its investments to ethical investments."

"Federal Environment Minister Tony Burke has still not decided whether to approve this project, and ANZ is putting their customer's money at risk by investing in this marginal and controversial project." Mr. Moylan said.

For further comment:

Jonathan Moylan

0431 289 766

46At 1.12 pm, Rob Harrison, an investment broker at BBY Limited Queensland, having sold Whitehaven shares on behalf of a self-managed super fund after becoming aware of the false media release, saw that it was now being reported by the media as a hoax. Mr Harrison called the number nominated for Toby Kent on the false media release. He asked for Toby Kent and the Offender said "Yes that's me". Mr Harrison identified himself and asked what the situation was. The Offender said:

Well, in fact, there was a second media release sent out. I am actually not Toby Kent. We're a group camped in Leard Forest where the Maules Creek mine is set to go. But we sent out the media release because we believe that the ANZ 's customers have a right to know that their money is being invested in destroying farmland and forests. We don't believe that ANZ customers would agree with this and ANZ needs to come clean about its dirty investments.

47At one stage during the discussion the following exchange occurred:

Mr Harrison: Do you understand the impact of putting a false and fraudulent media release out to the public has on wealth and shareholdings in stock? Did you consider that before you did this?

The Offender: Well we see this as similar to the Yes Men's announcement about Union Carbide compensating victims of the Dow Chemical spill in India.

Mr Harrison: So what you're actually saying is that you are prepared to destroy people's wealth and commit fraud by doing that, you're prepared to destroy people's wealth in order to make a message? So what do you say for the people that have invested in Whitehaven Coal that you have destroyed their wealth? I, just to get a message, a fraudulent message across?

The Offender: Well, we would like ANZ to stop investing in destruction, I mean ...

Mr Harrison: Yep sure, okay I understand your ideology but at the same time you have destroyed the share price and people's wealth in the process. You've cost, you've basically cost people money today by committing a fraudulent act. Do you understand the repercussions that come off the back of this?

The Offender: What we understand is that today people are being forced off their land, our drinking water is being used up for unnecessary coal mines and all around the world people are dying today because of climate change and more lives will be affected if ANZ Bank does not come clean to its customers about what it is invested in. I really do apologise for the concern and inconvenience that it's caused you.

48On 9 January, the Offender participated in an interview with Jamie Freed of AFR. In that interview the Offender was asked if he was surprised that the false media release was published online. He said:

Yes, I was. I expected the Bank to make an announcement that they were either pulling out from the project or that they would say no, we are publicly stating we are investing in the most destructive coal mine in New South Wales. I am sure we (scil they) wouldn't put it in those terms.

49He was asked if there were any threats of law suits and he said he had not had any claims yet but he would see what happened. He was asked about small investors losing money and he said:

My main concern is what happens to the local community. The consequences to me personally and financially is (sic) a lot less important.

50On the same day, the Offender was interviewed by Conor Duffy, a journalist with the ABC. The Offender was asked if he was surprised that the hoax worked so well. He said:

Well my intention was to get ANZ to publicly admit to funding the Maules Creek coal project with all of its impact. So, you know, the measure of success is whether the Maules Creek mine goes ahead. I don't - I didn't really expect what happened, but will be happy when the community is safe and that, you know, the health and the water impacts aren't, you know, don't go ahead.

51He was asked if he had any qualms about lying to journalists and he made reference to the stunt pulled by the Yes Men. The interviewer asked what his message was to the investors who had lost money through this, and the Offender said:

Well, our actions, my action was not targeting them, it was targeting ANZ and Whitehaven. We want ANZ customers to know where their money is being invested and they do have a right to know that, and, you know, we're looking at our banks to make more responsible investment decisions so that we can actually start to see a shift in the way energy is produced and we are going to see an end to farmers being forced off the land and our forest being destroyed.

52The interviewer asked if the Offender thought it unfair for those investors who did lose money. The Offender said:

Well, I do understand there were some day traders and speculators who lost money and it certainly wasn't the intent of the action. I - my greatest concern, as I have said, is for the people who've been living in their home for generations and generations, for, you know, forest and water supplies that can never be replaced.

53The interviewer said:

You mentioned that they weren't the target. Do you apologise to those people?

The Offender said:

Well, I certainly didn't intend any harm to shareholders in Whitehaven and, you know, for the record, I do apologise. Though I won't apologise for exposing ANZ's dirty investments in Whitehaven Coal and the process where the local community has been totally ignored and I have to say, you know, we've done everything. We've written letters, we've written submissions, we've gone to planning assessment commission meetings, we've considered legal action but that avenue has been, actually, taken away from us because of the process that's been set up by the Coalition State Government. ... We're up against, you know, a big company here and change doesn't happen without people taking risks and I think that, you know, this kind of thing is likely to happen in the future, perhaps not me, but people are going to be taking more and more risks to ensure that our rights and our environmental rights and the rights of landholders are respected and our children and grandchildren have a future.

The nature of the offence

54Section 1041E, by its broad terms, captures a wide range of prohibited conduct. Persons ordinarily charged under this section have tended to disseminate false information for the purpose of receiving some gain for themselves or for some company with which they are involved. However, the section extends beyond those types of cases.

55At various times during the sentencing hearing reference was made to "white collar crime" with the Crown, in particular, drawing attention to analogous cases such as cases involving insider trading, tipping or making false statements for the purpose of personal gain. Those types of cases have some elements in common including the loss of control over the false information, the involvement of and damage to the market, and the difficulties of detection, investigation and proof beyond reasonable doubt: Khoo v R [2013] NSWCCA 323 at [97]; Hartman v R [2011] NSWCCA 261 at [96] and R v Rivkin [2003] NSWSC 447 at [44].

56Allsop P said in Joffe v R; Stromer v R [2012] NSWCCA 277; (2012) 82 NSWLR 510 at [34]:

Chapter 7 of the Corporations Act is concerned with financial services and markets. The objects of the Chapter are described in s 760A and include, as a central element, the promotion of public confidence in the fairness and honesty of markets for financial products. An important feature of that promotion of confidence is the presence of criminal offences for recognised market misconduct,... Confidence in the honesty and integrity of the financial markets is of the utmost importance in an economy and a society which depend significantly for their well-being on the efficient operation of such markets.

57A consequence of those matters, especially the difficulty in detection, is that general deterrence is of greater significance when sentencing for such offences. I accept, here, that after the initial deception there was no attempt to conceal the crime. Indeed, it was always going to be straightforward to ascertain who the perpetrator was. The point of the offence was to be discovered after a short period of time.

58Parliament doubled the maximum penalty for offences against s 1041E and certain other market misconduct offences from 5 to 10 years imprisonment, with effect from 13 December 2010. Senior Counsel for the Offender drew attention to what was said in the Explanatory Memorandum to suggest that the increased penalties were more relevant to offences like insider trading where personal gain was a significant matter. He pointed to paragraph 3.5 of the Memorandum which said this:

The penalties for insider trading and market manipulation offences contained in the Bill reflect that the benefit which can be gained from engaging in this conduct often far outweighs the maximum penalty that can currently be imposed for a breach.

59Whilst it is true that the present offence did not involve personal financial gain, and that is relevant in the sentencing process, the Memorandum refers in a number of places to the need to increase penalties for "market manipulation" and "market misconduct", which was precisely what happened here. No distinction is made for the type of offence under the section in relation to the maximum penalty. The only point that could arguably be made is that sentences approaching the maximum should ordinarily be reserved for offences involving personal gain.

Sentencing principles

60The offence committed is a Commonwealth offence. The Offender is to be sentenced in accordance with Part 1B of the Crimes Act 1914 (Cth). Some important matters are these:

(a)Any sentence imposed must be of a "severity appropriate in all the circumstances to the offence";

(b)The matters that must be taken into account are those matters listed in s 16A(2) although other matters may be considered;

(c)In determining the appropriate sentence, the Court must have regard to the nature and severity of the conditions that may be imposed on, or may apply to, the Offender, under the sentence;

(d)The Court must not pass a sentence of imprisonment unless, having considered all other available sentences, it is satisfied that no other sentence is appropriate in all the circumstances of the case.

61Not all of the matters in s 16A(2) are relevant for the present offending. Having dealt above with the nature and circumstances of the offence, and losses to various groups, I will deal with the remaining matters that are relevant in what follows.

Objective criminality

62It is necessary that I come to a view about the objective seriousness of the offence. It was said by Counsel at the sentencing hearing that this was an unusual case, perhaps a unique one, and I agree with those sentiments. As noted earlier, ordinarily, persons guilty of an offence under s 1041E Corporations Act have made false statements for the purpose of their own financial gain. The present is not such a case. The benefit that the Offender wished to achieve was both publicity for his cause, to oppose the mine project and, perhaps a hope that by that publicity, that decisions would be made by the ANZ and others that might help to achieve the Offender's aims of stopping the project.

63As far as I can see he only intended harm to Whitehaven and, in an indirect way, to ANZ which would possibly thus force its hand to withdraw support for the Company. Although strict liability applies to paragraph (1)(b) of s 1041E which refers to the false statement being likely to induce persons to dispose of financial products, it is still a relevant inquiry in coming to a view about sentence whether the Offender knew that the false press release would damage the value of the shares of Whitehaven and result in financial harm to shareholders.

64The Crown submitted that the Court should find that the Offender was at least generally aware of a risk that the dissemination of the information would affect the share market. However, the Crown also accepted that it was open to the Court to find that the Offender did not deliberately set out to affect the trading in Whitehaven shares.

65The Offender is undoubtedly an intelligent person. The offence was effected by reasonably careful and thorough planning so that at least in the short term the recipients of the false media release would believe the truth of what was contained within it.

66The Offender told Mr Peter Johnston, the Community Corrections Officer who prepared the pre-sentence report, that his motivation for his actions were wholly aimed at prompting a public admission from the ANZ Bank of their support of the Maules Creek Mine Project, therefore assisting in his overall goal of preventing the mining venture. He claimed that he had no concept of the ramifications of his deception upon the stock market, Whitehaven Coal or investors, and claimed that he had no intent in that regard.

67I accept in the first place that the Offender's intention was to embarrass the ANZ Bank and to draw them out publicly on their support for the mining project.

68The Crown pointed to an email sent by the Offender on 24 October 2012 to various individuals associated with FLAC where he said:

Since a failed takeover by Nathan Tinkler, Whitehaven's shares have plummeted to about $3 a share from a $7/share peak in April. Their current profit margin is wafer thin.

69The Crown also pointed to the fact that the Offender had accessed the ASX website for Whitehaven some 14 times between 5 August 2012 and 2 January 2013, that at the FLAC camp he had discussed the movement of the share price following a Whitehaven train derailment, and that he had commented in an email about the effect on Whitehaven's share price in relation to the unsuccessful takeover by Nathan Tinkler.

70It is clear, however, especially from the email sent at 10:38 am on 7 January 2013 attaching the 12 page document titled "National Day of Action on ANZ: Action Organising Guide", that the Offender was so focussed on the damage that he wished to do the ANZ by hurting its reputation, and encouraging its investors and shareholders either to put pressure on the Board or to withdraw their support for the Bank, that he did not think through how his actions would actually damage Whitehaven's investors, particularly small investors or beneficiaries of superannuation and retirement funds who might invest in that company.

71If he had thought the matter through a little more carefully, he would have realised that some investors would undoubtedly be injured by any reduction in Whitehaven's share price, whether because the Bank might withdraw its support or simply because of what the hoax might do to its share price in the short-term. A reading of all of his remarks made shortly after the hoax was discovered suggest to me that he had not properly thought through the damage that might happen and that he was almost surprised when that was pointed out to him.

72I cannot be satisfied beyond reasonable doubt that he realised beforehand how investors would be hurt. I am quite satisfied that it was not his intention to hurt them.

73It also seems to me clear from the Offender's behaviour shortly after the false media release was distributed, that the Offender always intended to admit that it was a hoax within a relatively short period of time, but after it had had some impact and resulted, at least, in some statement from the ANZ.

74It is perhaps unfortunate that the Offender chose not to give evidence at the sentencing proceedings so that his understanding and expectations of how various parties, including media outlets, might respond and react could be tested. However, the evidence before me is sufficient to justify on the balance of probabilities the view I have reached that the Offender expected and intended that the hoax would have been discovered within a relatively short period of time, perhaps no longer than a few hours.

75Nevertheless, the actual damage was considerable, as is made clear by the level of trading in Whitehaven's shares and the significant sudden drop in the share price. I note that the share price recovered within a relatively short period of time, although that is not to ignore the damage done to individual investors who lost money by acting on the basis of the false statements.

76As I have said, the offending was attended with a considerable degree of planning and pre-meditation, albeit over a fairly short timeframe of a few days. The use of the logo, the examination of previous media releases by the ANZ, the purchase and use of the domain name, as well as the name of an actual employee of the Bank on the media release and in the recorded message on the phone, and the number of recipients of the email, especially the numerous media outlets, all attest to the level of the planning for the offence.

77One of the concomitants of this type of offending, the loss of control of price-sensitive information, was clearly present here. The information contained in the false media release was published by the AFR on its website at 12.20 pm but removed five minutes later when ANZ advised it was a hoax. In the meantime it was picked up by Bloomberg who did not become aware that it was a hoax until 12.42. Mr Baker from Caledonia (Private) Investments, who saw the AFR story commenced selling Whitehaven shares. He was not disabused of the position until, perhaps, 12.50 pm and probably later, because when he telephoned who he thought was Toby Kent, although he was told it was a hoax, he was also told by the Offender that the Maules Creek facility was under review by the ANZ.

78IRESS Ltd picked up the report from AAP and passed it on to its subscribers. Mr Harrison from BBY Limited who sold Whitehaven shares on behalf of a self-managed superannuation fund on the basis of the false media release only became aware of the hoax at 1.12 pm.

79The Offender pointed to two matters that were said to minimise the seriousness of the offending. The first was evidence from Mr Dreschler in an interview with ASIC where Mr Dreschler suggested that the Offender was rather surprised by the media's reaction to what he did. The second matter was the issue of the lack of care that the journalists took to check the veracity of the material in the release. Indeed, the Offender's Senior Counsel went so far as to say that the journalists more than the Offender ought to be held to account for the ultimate effect on the market.

80I completely reject that submission. Whatever responsibility the journalists might have had to check the story, it is quite hypocritical of the Offender to point the finger at them when he set up the false media release intending (as he accepted) that at least some of them would accept it as genuine. The whole point of the exercise was that the recipients of the media release should, at least for a period of time, accept the genuineness of what was given to them in order to embarrass and encourage the ANZ to say publicly that it was supporting the project or, what would be far less likely, to say that it would withdraw the funding.

81If the Offender had really expected the journalists not to publish until an official statement from the ASX's announcement platform, the hoax would not have got off the ground. If the Offender knew anything about the announcement platform and how it worked, he must have expected that at least some journalists would not wait for that sort of confirmation or the hoax would have had no effect.

82I do not accept what Mr Dreschler said to ASIC that the Offender was surprised by the reaction of the media. Nor do I accept what the Offender said in interviews, particularly to the Newcastle Herald, that he did not expect the reaction that he received.

83In all of these circumstances I consider that the objective seriousness of the offence was about halfway between the low and medium ranges of offending.

Subjective matters

84The Offender was born on 3 March 1988 and is 26 years old. He completed his High School Certificate in 2006 and obtained a University Admissions Index score of 95.15. In 2011 he graduated from the University of Newcastle with a Bachelor of Arts, majoring in French and Linguistics. He is fluent in three languages and has worked as a freelance translator since 2012.

85He is unmarried and not in a relationship. Despite some family difficulties when he was child he has a positive perspective on his formative years. He has good relationships with his parents.

86His founding of FLAC with Murray Drechsler has been referred to. Between 5 August 2012 and 7 January 2013 the Offender resided primarily at the FLAC blockade camp in the Leard State Forrest.

87Since finishing his studies he has been involved in various employment activities such as working with Greenpeace and completing research for the Wilderness Society. He informed Mr Johnston that the focus of these activities have been towards large companies involved in mining and government action that was allowing mining to occur. He has involved himself in activities aimed at preventing mining and in conduct designed to bring these matters into the public arena.

88It is in the course of these activities that he has been charged with a number of protest type offences as follows:

(a)On 29 June 2009 he was convicted at Raymond Terrace Local Court of resisting or hindering a police officer in the execution of their duty in respect of which he was fined $440, and for entering enclosed lands without a lawful excuse in respect of which he was fined $110. On appeal the East Maitland District Court confirmed the convictions but quashed the $110 fine for the offence of entering enclosed lands without a lawful excuse.

(b)On 19 January 2010 he was convicted at Newcastle Local Court for the offence of going onto, into or remaining or in running lines in respect of which he was fined $750.

(c)On 26 October 2010 he was convicted at Newcastle Local Court of an offence of entering enclosed lands without lawful excuse in respect of which he was fined $300.

(d)On 31 January 2011 he was convicted at Muswellbrook Local Court of an offence of going onto, into, or remaining on or in running lines in respect of which he was fined $250.

(e)On 25 October 2011 he was convicted at Newcastle Local Court of the offence of entering enclosed lands without a lawful excuse. No penalty was recorded.

(f)On 21 December 2011 he was convicted at Bega Local Court of an offence of entering enclosed lands without a lawful excuse and an offence of hiding tools, clothes or property to unlawfully influence a person. In respect of the offence of entering enclosed lands he was fined $100. For the offence of hiding tools he was fined $900 and placed on a bond to be of good behaviour for two years and six months pursuant to s 9 Crimes (Sentencing Procedure) Act 1999 (NSW). He was also ordered to pay compensation in the amount of $1204. The good behaviour bond was stayed when he appealed to the District Court. On 8 February 2013 the District Court confirmed the convictions but reduced the period of the s 9 bond to a period of nine months and reduced the amount of the fine to $300. The result was that at the time of the commission of the present offence the Offender was not the subject of any bond or conditional liberty.

89The above represents fairly persistent offending over a relatively short period in furtherance of his beliefs and principles, albeit they are minor offences. This offending needs to be considered when assessing the genuineness of the Offender's contrition for the present offence, and the likelihood of his re-offending.

90The Offender's referees speak highly of his integrity, and his passion and concern for social justice including for refugees and the indigenous community.

Contrition and plea of guilty

91The Offender was served with a Court Attendance notice on 27 June 2013. He first appeared in the Local Court on 27 July 2013. On 24 September 2013 he applied to waive his right to a committal and that was granted. He was committed for trial in this Court on that day. On 1 November 2013, at arraignment, the trial date was fixed for 30 June 2014. As noted earlier, he pleaded guilty on 23 May 2014. That was not at the earliest opportunity.

92However, the Offender's Senior Counsel submitted that the late plea should not be seen as a reflection on any lack of contrition. He submitted that there was a serious legal question to be worked through concerning the issue of inducement in subsection (1)(b) of s 1041E although strict liability applies to that element of the offence. I accept Senior Counsel's assurance that that was the reason for the delay. Although it will impact on the discount for the plea, the late plea will not be taken as any lack of contrition.

93In Commonwealth matters a guilty plea is taken into account as a mitigating factor demonstrating a willingness to facilitate the course of justice. In assessing the willingness of an offender to facilitate the course of justice the strength of the Crown case against the offender is a relevant consideration: Danial v R [2008] NSWCCA 15 at [27] - [28]. The Crown case against the Offender was a strong one. However, having accepted that the assessment of a legal issue was the reason for the delay, it would not be fair to the Offender to say that he was not, before the plea, willing to facilitate the course of justice. I consider that the appropriate discount is 15%.

94 The Offender tendered a letter to the Court dated 11 July 2014. The letter said this:

I am writing this letter by way of apology to people who traded in Whitehaven Coal shares as a result of the false press release that I sent out claiming that the ANZ Bank was withdrawing its support for the company. The fact that the release, which was intended to generate publicity about the ANZ loan, led to trading on the stock exchange came as a complete surprise to me. It was my failure to consider the market-sensitivity of the statements that led to trading that would not have otherwise occurred.

Wantonly causing harm or loss to others in no way forms part of my commitment to non-violence. Those who traded on that day have every right to feel deceived and angry about the consequences of my actions. Additionally, I am well aware that many people have their retirement savings managed by a broker and invested in Whitehaven, and such people may have lost money that they have worked hard to earn. Those people in particular deserve an apology and explanation for their unjust and undeserved loss.

It is for that reason that I made an apology on the 7:30 Report two days after the fact, and I also express my deep remorse in this written form.

95As has appeared from statements made and interviews given by the Offender shortly after the hoax was exposed, the Offender expressed some contrition for what he had done. However, unlike what appears in the above letter, apparently written on the day of the sentencing hearing, many of the earlier expressions of remorse were somewhat qualified. The statements made to Mr Harrison of BBY, Jamie Freed of AFR and Conor Duffy from the ABC seem to me to amount to qualified apologies to those who may have lost money.

96At the time of his interview with Mr Johnston in July 2014 he was fully cognisant of the adverse impact of his offending. He said in hindsight that he regretted his actions in terms of the difficulties he had caused others. He also said that he experienced some personal distress that the consequences of his actions conflicted with his principles of being non-violent and avoiding harm to others. His letter to the Court expressed similar sentiments.

97I accept that the Offender is now contrite in respect of those who suffered as a result of his actions.

Rehabilitation

98As far as the Offender's prospects of rehabilitation are concerned, I am inclined to accept the assessment of Mr Johnston, who assessed the Offender as a low risk of re-offending. The possible re-offending is in relation to the commission of an offence such as the present. It is clear that the Offender has been prepared to break the law on a number of occasions to further the causes in which he believes. The number of offences for which he was convicted in a relatively short period of time attests to that.

99By reason of the number of offences there is a need for specific deterrence. I accept that the present offence is of a completely different type from the other offences. However, it cannot be overlooked that this offence was the most successful from the Offender's point of view in drawing public attention to this particular cause that he advocates.

100I consider that there is a low likelihood the Offender will re-offend by committing an offence similar in nature and scale to the present. He is not a criminal in the classic sense of one who needs rehabilitation, although I consider that there is some likelihood that he may continue to engage in what might be regarded as minor breaches of the law as acts of disobedience to further his beliefs and purposes. The sentence needs to have regard to that matter.

Sentence

101I have read and noted a number of decisions concerning market misconduct offences. In all cases sentences of imprisonment were imposed, although in some cases these were suspended in whole or in part. Personal profit was the dominating motive in the cases. The lack of such motive in the present case is what distinguishes it from those cases.

102Nevertheless, this was much more than some sort of public mischief offence where, for example a false report is made of a crime for some private purpose. It was not the sort of case that prompted Lord Hoffman's remarks about protesters against the Iraq war in R v Jones [2007] 1 AC 136 to which my attention was drawn.

103Here, the market was manipulated, vast amounts of shares were unnecessarily traded and some investors lost money or their investment in Whitehaven entirely. These were not just "day traders and speculators" as the Offender said to Mr Duffy - superannuation funds and ordinary investors suffered damage. It was intended that ANZ at least be embarrassed and that Whitehaven should be damaged or threatened, even if there was no intention to hurt shareholders and investors as such.

104I have considered all the available sentences and I am satisfied that no other sentence than imprisonment is appropriate in all the circumstances. But for the guilty plea, I would have imposed a sentence of 2 years imprisonment. With a 15% discount for the plea the appropriate sentence is a period of 1 year and 8 months (rounded down).

105However, taking into account the guilty plea, the fact that the hoax was readily admitted within a short period of time, the fact that the Offender has not previously been convicted of a serious offence, and the fact that the offence was not committed for the purpose of personal financial gain, nor was any obtained, I consider that the Offender should be immediately released upon giving security of $1000 upon the condition to be of good behaviour for 2 years with such sentence commencing today.

106Jonathan Moylan: For the offence charged against s 1041E(1) of the Corporations Act 2001 (Cth) I convict you and I sentence you to imprisonment for 1 year and 8 months. I order that you be immediately released upon giving security by way of recognisance in the sum of $1000 to be of good behaviour for a period of 2 years commencing today.

107I am obliged to explain to you the reasons for imposing a sentence of imprisonment. The offence was a serious one. Although you received no personal financial gain it was done in an attempt to achieve your own political purposes. The market was manipulated, people were misled and lost money and investments as a result.

108I am also obliged to explain to you why I am ordering your immediate release on a recognisance. I accept that you are now contrite for the damage that you have done. I note your plea of guilty. You did not commit this offence for personal gain nor did you receive any. You did it for motives that I accept were sincerely held by you even though your methods of achieving them were wrong. I do not consider that a sentence to be served in custody would serve any good purpose for you or the community.

109However, the sentence is one of imprisonment. If you are not of good behaviour during the 2 year recognisance, which at a minimum means that you do not commit any further offences, or if you fail without reasonable excuse to fulfil or comply with the conditions of your recognisance, your recognisance may be forfeited and you will be brought back before the Court and the orders I have made may be revoked or cancelled. You may be dealt with for the offence in respect of which the order was made and you may be required to serve a term of imprisonment in custody. I also inform you that the recognisance release order may be discharged or varied on application made to the Court.

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