The owner of forex broker Pepperstone Financial used his LinkedIn account to connect one of his clients, Lukas Kamay, to an Australian Bureau of Statistics employee who was allegedly disclosing data before it was released.
Kamay, who at the time was a NAB trader, and the public servant Christopher Hill — friends through their time at Monash University — have been accused of orchestrating a $7 million insider trading scheme.
The Australian Financial Review says Pepperstone owner Owen Kerr was alerted to the huge trades, made in the minutes before the ABS data was released, and could see some may have caused unsustainable losses.
Kerr looked Kamay up on his LinkedIn account and saw that he was friends with Hill, who worked at the ABS. There have long been suspicions in the market about data leakage ahead of important economic releases, because of rapid currency price action in the minutes before a data point is out.
“That was when it suddenly clicked that this guy was only trading ABS data and had a man on the inside,” Kerr told Fairfax Media yesterday.
He contacted ASIC, who advised him to alert the AFP, according to the report. Once they were involved, they asked him to keep the account active so it could be used in the investigation.
Authorities monitored the pair for several months, using phone taps, security cameras and their social media accounts.
Pepperstone, the ABS, the National Australia Bank, as well as Kamay’s other private broker Axicorp, were all involved.
Hill and Kamay have since been charged with several offences related to their alleged insider trading. Kamay has been granted strict bail, while Hill has been extradited from Canberra and will face court today.
NAB has stressed that Kamay didn’t use any of his clients’ money, or any of the bank’s systems to place any of the alleged trades, and CEO Cameron Clyne sent a note to employees on Friday urging them to report any suspicious activity they encounter.
There’s more here.