Two men were sentenced to jail terms of 7 years and 3 months, and 3 years and 3 months respectively in the Victorian Supreme Court today for their roles in Australia’s largest insider trading scheme totalling $7 million. The two men were charged in 2014 with insider trading, money laundering and abuse of public office offences.
This large and complex investigation by the Australian Federal Police (AFP) and Australian Securities and Investments Commission (ASIC) began after suspicious trading was identified in the foreign derivatives market.
The AFP and ASIC, working together through the AFP-led Fraud and Anti-Corruption Centre, discovered an employee of the National Australia Bank was receiving sensitive information from an employee of the Australian Bureau of Statistics (ABS). They were then using this information to enter into foreign exchange derivative products and profit from favourable movements in market prices.
The nine-month illegal trading activity resulted in profits of approximately $7 million dollars, which was restrained by the AFP-led Criminal Assets Confiscation Taskforce. This money has now been officially forfeited to the Commonwealth and is to be placed into the Confiscated Assets Account, from where it will be reinvested into the community.
Today's sentence is testament to the close working relationship between the AFP and ASIC, and the dedication and expertise of the specialised teams involved.
The arrest and conviction of an ABS officer for an unauthorised disclosure of statistics is unprecedented in the ABS’s 110 year history. Today’s sentence demonstrates that such actions which breach the trust placed in ABS officers will not go undetected or unpunished.
It also sends a clear message about the importance and emphasis that our enforcement agencies place on maintaining market integrity. Insider trading is a serious offence and a form of dishonesty – stealing information owned by others and exploiting it for a personal gain. It is also at complete odds with the expectation of Australian investors about a level playing field, where those with access to privileged information do not have an unfair advantage over other investors.
In 2014, the Government directed an extra $14 million in funding, which was confiscated from criminals, to increase the detection and disruption capabilities of law enforcement. This boost was part of the Coalition Government's commitment to taking the profit out of crime, and to disrupt and deter serious and organised crime in Australia by removing the proceeds and instruments of crime.