Mood:
d'ohTopic: corporates
With the ABC Learning (no relation to ABC public broadcaster) share trading intrigue breaking in the news this timely backgrounder only last week, with selected choice quotes:
Insider trading rife in Australia | NEWS.com.au 23 Feb 2008
INSIDER trading is so rife in the Australian stock market it may be weakening the reputation of the local bourse, forcing the companies' watchdog to bulk up its resources in the wake of a poor track record in cracking down on the practice. ....
"It is frustrating and commonplace to see informed price movement happen before announcements,'' Peter Hunt, principal at boutique investment bank Caliburn Partnership, told the Australian Securities and Investments Commission Summer School yesterday.
"There is greed and short-termism that is pervasive, and getting worse.'' ....
"We are concerned that insider trading is at a level that is a major issue for the market,'' Balanced Equity Management managing director Andrew Sisson said.
....He said in the 40 days before an announcement, a target's share price would rise on average 10 per cent.
"In the very last day there is a spike of about 3 per cent typically,'' Mr Sisson said.
"This is partly rumours, partly straight insider trading. It's fair to say that a significant level of insider trading is detrimental to our market.''
.... Gresham executive director Jenny Seagate said 2007 was "a year when insider trading was on the rise''.
..... "For many market practitioners six-figure fines are relatively small, although it is a lot of money to most people.
"Let's seriously think about decent seven-figure sums.'' ....
Peter Hunt's ways to cut insider trading
* The secondment of staff between ASIC and the private sector
* Better data about insider trading
* Measuring the performance of the regulator against the data
* Handing ASX's supervisory powers to ASIC to create a centre of excellence
* Improving and speeding up the litigation process
* A specialist markets tribunal made up of market participants of "good standing"
* Financial rewards and immunity from prosecution for whistle blowers
* Plea bargaining and civil penalties with $1 million plus fines
* Give compliance officers a statutory duty to report directly to ASIC if they see or suspect suspicious behaviour
