Simon Hannes - Prosecution

Prosecution

The ASC charged Hannes,

1. Under the corporations act, for insider trading in the options purchase (as Booth).
2. Under the FTR act, for splitting the cash withdrawals (in his own name).
3. Under the FTR act, for splitting the cash used for bank cheques (as Booth).

The trial in the District Court of New South Wales was long and complex. The prosecution called 42 witnesses and 3 expert witnesses and offered 200 exhibits. Justice Backhouse's summing up took four days. The identification of Hannes as Booth relied on witnesses from the banks, Mail Boxes Etc, and handwriting analysis from documents by Booth and indentations on paper found at Hannes home. Among those indentations was a page of apparent practice signatures "M. Booth", and notes about the mailbox and voicemail.

Hannes' defence was what he said in the police/ASC investigation, namely that he had been in an investment syndicate with an English friend who was wealthy and knowledgeable about finance and invited him to invest. The friend had then made the options purchases without Hannes' authority, but also without any special knowledge about TNT. And further that when the alleged insider trading became public knowledge Hannes and the friend agreed to return the monies. Hannes also indicated that he was due to meet his English friend in London to clarify the situation, however he could not find him.

After eight days deliberation the jury returned guilty on the FTR charges, and after further instructions from the judge and another two days they reached guilty on the insider trading charge.

Justice Backhouse handed down a sentence of 2 years 2 months imprisonment and $100,000 fine for the insider trading, and 4 months each for the FTR offences, but with those terms to all be served concurrently, and fines of $5,000 for each FTR offence in lieu of the terms being cumulative. She set a recognisance release period of 18 months.

An appeal by Hannes in the NSW Court of Criminal Appeal was upheld on the grounds of certain directions given by Justice Backhouse to the jury. The conviction was quashed and a retrial ordered. Hannes had by that time served 15½ months of his sentence and was released pending the outcome of the retrial.

The retrial in the Supreme Court of New South Wales at Darlinghurst reached the same conclusion as the first, guilty on all charges. Justice James handed down the same sentence of 2 years 2 months and $100,000 fine for insider trading, and 4 months each for the FTR offences. But he made those FTR terms cumulative on the insider trading (but concurrent with each other) for a total 2 years 6 months. He set a recognisance release period of 20 months, which accounting for time already served meant a further 4½ months in prison for Hannes.

Justice James decided for cumulative sentences on the basis that the FTR offences were a separate criminality from the insider trading, and if they were not cumulative then the sentence would be manifestly inadequate.

On 2008-05-13 Hannes won an uncommon second hearing in the High Court, in order to make an argument for special leave to appeal. A similar application was rejected in March 2008.