At the time of Mr Gay’s offending, the maximum penalty for insider trading was imprisonment for five years and/or a fine of $220,000.
Since then, the maximum penalty has been increased to 10 years and/or a fine of $765,000 or three times the total benefit derived from the offence (whichever is greater).
As a result of the conviction, Mr Gay will be automatically disqualified from managing corporations for five years.
Mr Gay, who was the chairman of Gunns from 2002 to 2010, pleaded guilty to insider trading on 5 August 2013.
On December 2 and 4, 2009, he sold more than 3.4 million Gunns shares while in possession of inside information relating to the financial performance of Gunns.
The shares were sold before the release of Gunns’ half-year results on 22 February 2010.
Australian Securities and Investments Commission (ASIC) commissioner Cathie Armour said Mr Gay is the most senior executive to be convicted of insider trading in Australia.
According to ASIC, Mr Gay was convicted on the basis that he "ought to have known" the information constituted inside information, not that he knew.
ASIC has prosecuted 29 insider trading matters since 2009 – 20 of which have been successful.