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Friday 9 May 2014

14-100MR Two men arrested for insider trading and abuse of public office, 7 million dollars restrained

This is a joint media release of the Australian Federal Police and Australian Securities and Investments Commission.

Two men have been arrested by the Australian Federal Police (AFP) today for offences relating to insider trading, money laundering, corruption and abuse of public office.

The arrests are the result of a joint AFP and ASIC operation after suspicious trading in foreign exchange derivatives was identified and monitored.

Authorities discovered evidence that a 26-year-old man, an employee of the National Australia Bank (NAB), was receiving sensitive information from a 24-year old man, an employee of the Australian Bureau of Statistics (ABS).

It will be alleged in court that the 26-year-old man was obtaining this market sensitive information before its official release by the ABS, then using it to enter into foreign exchange derivative products and personally profit from favourable movements in the prices of those derivatives.

This trading activity, occurring between August 2013 and May 2014, has resulted in profits of approximately $7 million. This has been restrained by the AFP-led Criminal Assets Confiscation Taskforce under Commonwealth proceeds of crime legislation.

Earlier today, the AFP and ASIC executed eight search warrants in Melbourne and Canberra, arresting the 26-year-old Clifton Hill man and the 24-year-old Belconnen man.

The 26-year-old Clifton Hill man has been charged with a range of offences relating to the use of inside information from ABS to unlawfully profit through the trading of foreign exchange derivatives and corrupting a public official.

The 24-year-old Belconnen man has been charged with offences relating to insider trading, receiving a corrupt benefit, release of sensitive information, and abuse of public office.

Items seized during the search warrants include $9,000 in cash.

Both the NAB and the ABS provided their full cooperation and assistance to police throughout the investigation.

AFP Acting National Manager Crime Operations Ian McCartney said today's action sends a strong message to those engaging in this type of criminal activity.

'The AFP and ASIC have worked together closely on this serious and complex investigation, utilising the resources and expertise of both agencies to bring about today's arrests,' Acting Assistant Commissioner McCartney said.

'The assistance of the NAB and ABS in this matter was invaluable and has greatly contributed to the successful actions of the AFP and ASIC today.'

'Investigations like this send a clear message to anyone who is thinking of engaging in this type of criminal activity - we have the ability to monitor you and take action, as we've done today.'

ASIC's head of markets enforcement Chris Savundra said ASIC is dedicated to taking strong enforcement action against insider trading.

'Insider trading is a serious criminal offence which will not be tolerated because it has the potential to destroy trust, discourage participation, and undermine confidence in the integrity of Australia's financial markets,' Mr Savundra said.

'We reiterate that the outcome of today's operation is a testament to the close working relationship and cooperation between the AFP and ASIC, and the dedication and expertise of the teams involved.'

Charge information:

The 26-year-old Clifton Hill man was charged with the following offences:

  • One count of conspiracy to engage in insider trading, pursuant to section 11.5 of the Criminal Code Act 1995, which is an offence by virtue of section 1311(1) of the Corporations Act 2001 (Corporations Act) in that they contravened section 1043A(1)(c) of the Corporations Act.

  • One count of giving a bribe to a Commonwealth public official, with the intention to influence the official in the exercise of his duties as a Commonwealth public official, contrary to section 141.1(1)(a)(iii) of the Criminal Code Act 1995 (Cth) (Criminal Code Act);

  • Three counts of insider trading, by trading in foreign exchange derivatives while in possession of inside information not generally available to the public, contrary to sections 1043A(1)(c) and 1311(1) of the Corporations Act;

  • One count of dealing in identification information using a carriage service and dealing with that identification information, with the intention to use the identification information to pretend to be or to pass themselves off as another person for the purpose of facilitating the commission of an offence, contrary to section 372.1A(1) of the Criminal Code Act.

  • One count of dealing in proceeds of crime, money or property worth AU$1,000,000 or more, contrary to section 400.3(1) of the Criminal Code Act.

He is scheduled to appear in Melbourne Magistrates Court.

The 24-year-old Belconnen man was charged with the following offences:

  • One count of conspiracy to engage in insider trading, pursuant to section 11.5 of the Criminal Code Act 1995, which is an offence by virtue of section 1311(1) of the Corporations Act in that they contravened section 1043A(1)(c) of the Corporations Act.

  • One count of receiving a bribe as a Commonwealth public official, contrary to section 141.1(3)(a)(iii) of the Criminal Code Act;

  • One count of abuse of public office to dishonestly obtain a benefit, contrary to section 142.2(1)(b)(i) of the Criminal Code Act;

  • One count of dealing in proceeds of crime, money or property worth $10,000 or more, contrary to section 400.6(1) of the Criminal Code Act.

He is scheduled to appear in Canberra Magistrates Court.

Read this release in PDF as released by the AFP (104 MB)

Editor's note:

The 26-year-old Clifton Hill man referred to above is Lukas James Kamay. The 24-year-old Belconnen man is Christopher Russell Hill. Both men appeared in the Melbourne Magistrates' Court on 21 August 2014. The matter was adjourned until 16 September 2014.

Editor's note 2:

On 16 September 2014, Mr Hill and Mr Kamay appeared in the Melbourne Magistrates Court.

Mr Hill pleaded guilty to six charges:

  • one Joint Commission insider trading charges
  • four abuse of public office charges, and
  • one identity fraud charge.

Mr Kamay pleaded guilty to six charges:

  • oneJoint Commission insider trading charges
  • two charges of using false ID, and
  • three insider trading charges.

Mr Kamay pleaded not guilty to one charge of dealing in the proceeds of crime over $1 million.

Mr Hill and Mr Kamay were both ordered to stand trial in the Melbourne Supreme Court to appear at a first directions hearing on 1 October 2014.

Editor's note 3:

On 1 October 2014 the matter was mentioned and, in relation to Mr Kamay's charge of dealing in the proceeds of crime, the matter was adjourned to 15 October 2014.

In relation to Mr Kamay's further six charges and Mr Hill's six charges, a plea hearing will be heard over two days on 10–11 December 2014.

Editor's note 4:

On 31 October 2014 the matter was mentioned and, in relation to Mr Kamay's charge of dealing in the proceeds of crime, the matter was adjourned to 27 November 2014. In relation to Mr Kamay's further six charges and Mr Hill's six charges, the plea hearing date is set to be heard over two days on 10–11 December 2014.

Editor's note 5:

On  27 November 2014, at a directions hearing in the Supreme Court, Mr Kamay indicated that he will plead guilty to the charge of dealing in the proceeds of crime. In relation to Mr Kamay's further six charges and Mr Hill's six charges, the plea hearing date remains listed to be heard in the Supreme Court over two days on 10 and 11 December 2014.

Editor's note 6:

Following a pre-sentence hearing on 10-11 December 2014, Messrs Kamay and Hill were remanded in custody for sentencing, currently expected in early February 2015. No date has been set.

Editor's note 7:

Messrs Kamay and Hill are listed for sentencing on 17 March 2015.

Last updated: 11/03/2015 12:00