In Australia, an alleged $7 million insider trading scheme is generating significant headlines. The trader in question, National Australia Bank associate director Lukas Kamay, was charged criminally last week for insider trading and receiving a corrupt benefit. Kamay allegedly made large, profitable bets on the direction of the Australian dollar just before the release of significant economic news by the Australian Bureau of Statistics. In addition, Kamay's friend Christopher Hill, an employee of the Australian Bureau of Statistics, has also been arrested and charged for providing Kamay with market-sensitive information (e.g., related to labor force, retail and trade figures) before ABS released such information to the public.

Australia's Sydney Morning Herald reports that the scheme was uncovered in an unusual, but entirely logical, way. A foreign exchange broker named Owen Kerr, the founder and owner of a firm called Pepperstone Financial, was advised by his staff that one of the firm's clients (Kamay) was making unusually timely and profitable bets on the Australian dollar just before key economic announcements. Kerr looked up Kamay's profile on LinkedIn and found that Kamay was connected on LinkedIn with Hill, who worked at the ABS. Kerr said that it then "suddenly clicked that this guy was only trading ABS data and had a man on the inside.” 

Kamay promptly contacted the Australian Federal Police, which launched an investigation.  The AFP was also able to further connect Kamay and Hill by using "covert internet inquiries through Facebook to reveal that the two men were 'friends.'”

Topics