After a six-week trial, and five years after his firm collapsed owing creditors more than $630 million, Julian Smith has walked from court a free man.
On Friday afternoon, a Supreme Court jury acquitted the former director of failed securities lender Opes Prime of dishonesty and using his position to gain advantage.
The verdict was a big blow to the Australian Securities and Investments Commission. ASIC initiated the case, which argued that as Opes teetered on collapse, Mr Smith wrongly pledged assets in order to secure a $95 million loan from the ANZ to Leveraged Capital, a company he and Opes chief executive Lirim "Laurie" Emini had links to.
In a short statement ASIC acknowledged the verdict, and highlighted that while Mr Smith was found not guilty, Mr Emini and another Opes director, Anthony Blumberg, were jailed in 2011 for 24 months and 12 months respectively for their role in the Opes collapse.
As he left court Mr Smith, 51, said he was grateful to the jury and hoped to get on with his life.
His defence counsel, Mark Regan, told BusinessDay that although the case "was a massive task, it was a fairly easy for me to undertake".
"Mr Smith had steadfastly asserted that he had not been dishonest. Those were his basic instructions unwavering," Mr Regan said.
"When I got the brief, I combed through it and I just could not see that a crime was evident anyway, even if you set aside Mr Smith's instructions.
"From that point on, we held a firm line. We just held the line against ASIC and the prosecution. We were confident that a jury would see the circumstances in the way we did and of course our position has been vindicated."
Mr Regan said Mr Smith would return to his home in Wentworth Falls in NSW this weekend. He has also had his seized passport returned.
Twenty-two witnesses were called during the trial, including John Lindholm, a partner of Opes' voluntary administrator and liquidator Ferrier Hodgson, who told the court that Opes Prime was "clearly insolvent" before signing the $95 million deal with ANZ.
The prosecution alleged that Mr Smith knew that Opes faced a $200 million shortfall when he negotiated the ANZ lifeline.
That figure was derived from problems in an account of a key Opes client, Sydney lawyer Chris Murphy, plus problems with Riqueza Holdings, a private company associated with Opes Prime that had dozens of cash and share transactions to its sub-accounts.
Two witnesses from the ANZ, Felicity McKinnon and Ben Steinberg, said they were not aware of the existence of Riqueza until after the loan documents had been signed, while Mr Emini told the court that he did not tell Mr Smith and other key colleagues that he was double counting securities before Opes collapsed.
Opes had more than 650 clients when it collapsed owing creditors $631 million. Mr Lindholm told the court last month that creditors had recovered 40¢ in the dollar, with the prospect of 1¢ more this year, pending court action.