Tuesday, March 17, 2015 6:42 am
A judge on Tuesday jailed two men over a multi-million dollar insider trading scheme she said was the worst example of the crime to come before an Australian court.
Australian Bureau of Statistics (ABS) worker Christopher Russell Hill, 25, fed sensitive, unpublished economic data to a banker he knew from university, Lukas James Kamay, 26, for use in foreign exchange trades.
In sentencing, Victorian Supreme Court Justice Elizabeth Hollingworth said Hill made handwritten notes of yet-to-be released labour and other data and passed the information to Kamay by mobile phone.
Kamay then used this to correctly predict movements in the Australian dollar, entering into foreign exchange derivative products to profit from those fluctuations.
He made deliberate losses so as not to arouse suspicion and opened several accounts with which to trade in 2013 and 2014. However, the scheme was detected after suspicious trading in forex derivatives was picked up by authorities.
At the time, the ABS said the arrest of a staff member for unauthorised disclosure of statistics was “unprecedented in ABS history spanning more than 100 years”.
Kamay built up some Aus$7 million (US$5.34 million) in profit, but kept much of the earnings from Hill and ultimately the ABS worker received less than Aus$20,000 in payments.
Hollingworth said Kamay’s winnings were by “a very considerable margin” the largest insider trading profit to come before an Australian court.
But she said apart from his young age and early plea of guilty, there was little to mitigate her decision.
“The DPP (Director of Public Prosecutions) is right to describe your conduct Mr. Kamay as the worst instance of insider trading to come before the courts in this country,” she said.
While Hill never knew how much money Kamay made, thinking they had an agreement to never go beyond a profit of Aus$200,000, both men were motivated by “personal greed, pure and simple”, Hollingworth said.
She noted that neither suffered from a gambling addiction or was under financial pressure.
Kamay, who pleaded guilty to charges of insider trading, money laundering and identity theft, was sentenced to seven years and three months, with a minimum term of four and a half years.
Hill was jailed for three years and three months, with a minimum term of two years, after pleading guilty to charges of abuse of public office and insider trading.