Australian Securities and Investments Commission chairman Greg Medcraft said he would “hunt down” whoever leaked information about the proposed bank levy to The Australian Financial Review ahead of an official budget announcement.
ASIC is investigating whether any abnormal trading in bank stocks took place on the back of information that was supposed to be highly confidential.
Australian Federal Police investigators are contributing to the probe.
“We will hunt this down as much as we can,” Mr Medcraft told budget estimates.
“I think everyone is concerned about finding out where the leak came from, frankly,” he said.
“It’s not good for Australia.”
Speculation the government would impose some form of new tax on the banks was aired on Sky News late on May 8, the day before the budget.
But it was veteran business journalist Tony Boyd who published the most detailed information in the hours before the budget lock-up, Mr Medcraft said.
“I was concerned about the Tony Boyd article because it seemed quite well informed – the fact he knew the meeting would be at 6 o’clock,” he said. “It was before the lock-up so … rang an alarm bell in me.”
He was referring to the fact Treasury Secretary John Fraser was due to call the big four bank chief executives on Tuesday at 6.30pm before Mr Morrison delivered the bad news publicly.
Mr Medcraft appeared before the Senate Economics Legislation Committee on Wednesday.
A day earlier, the committee heard from Australian Prudential Regulation Authority chairman Wayne Byers, whose attention was also drawn to a Financial Review article. Greens senator Peter Whish-Wilson held up James Eyers’ “Five questions Wayne Byers could be asked by Senate estimates” and asked two of them; one on the much-debated “too big to fail” topic and the other on shadow banking.
ASIC’s market surveillance team noted changes in the price of bank stocks on the morning of the budget.
However, the movement, at about 3 per cent, was not significant, ASIC commissioner Cathie Armour said.
“The changes in the share price actually weren’t in percentage terms really significant,” she said.
“We saw the price change, for example, from the opening to the time of Mr Boyd’s article, in all of the banks the most significant movement was a 2 per cent movement.”
Asked whether Treasurer Scott Morrison’s office was being investigated, Ms Armour said the agency would speak with all relevant participants, including Treasury officials.
“We are a little bit reluctant to go into details [of the investigation] but we have been examining accounts that traded in the five stocks in the period before the rumours really commenced so that we’re looking to see if anyone did profit in a way that is unexplained or unusual.
“We are talking with Treasury and are gaining information about who knew about the proposal and the processes that were used.”
Mr Medcraft said market integrity was at the “heart of the Australian market.
“If there is a problem we want to try to find it. Also I think we want to learn from it.
“Everyone who is in the circle will be relevant … everyone who had access to that information.”
On Monday, Treasury Secretary John Fraser said he would be “devastated” if the leak came from his department.
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