Former banker, 26-year-old Lukas Kamay and ex Australian Bureau of Statistics worker, 25-year-old Christopher Hill have both been sentenced to significant gaol terms for their roles in what is one of the biggest insider trading cases in Australian history—worth over $7million in illegal foreign exchange trades.
Kamay was sentenced to seven years and three months with a non-parole period of four and a half years; Hill was sentenced to three years and three months with a non-parole period of two years.
In an arrangement between the two men, Hill agreed to use his position at the ABS headquarters in Canberra, to send Kamay sensitive and unpublished ABS main economic indicators— labour force, retail trade, building approvals, and private expenditure data (the inside information), that was not generally available to the public which he obtained in his capacity as a Commonwealth public official.
Ring leader Kamay, based at National Australia Bank (NAB) in Melbourne, used the data to make trades on currency markets based on which direction the Australian dollar was expected to go.
Their plan was to make around $200,000 profit from market sensitive information but led to Kamay concealing millions more in accounts unknown to Hill.
The Australian Federal Police (AFP) and Australian Securities and Investment Commission (ASIC) launched their investigation on 21 February 2014, arresting both men on 9 May 2014. The Commonwealth Director of Public Prosecutions successfully prosecuted the matter working closely with AFP and ASIC investigators.
On 10 and 11 December 2014 Kamay and Hill pleaded guilty in relation to their offending before Justice Hollingsworth in the Supreme Court of Victoria at Melbourne.
Kamay pleaded guilty to a total of seven charges, while Hill pleaded guilty to a total of six charges.
Commonwealth Director of Publication Prosecutions, Robert Bromwich SC said ‘Justice Elizabeth Hollingworth has made it clear that insider trading and other offences that undermine the integrity of the market are serious crimes warranting substantial gaol sentences.’
‘This sentence will encourage and support the people who do the right thing, as well as discouraging those who might be tempted to do the wrong thing’ added Mr Bromwich.
Mr Bromwich who appeared in Court when the case was last heard in December, had urged Justice Hollingworth to consider the role each man played in the activity and ensure an appropriate gaol term to ensure offending of this nature is not rewarded and to deter others considering illegal and unethical behaviour such as insider trading.
In sentencing Kamay, Judge Hollingworth said ‘The gross profit you made is, by a very considerable margin, the largest insider trading profit to come before an Australian court. Apart from your early plea of guilty, Mr Kamay, and some very minor allowance for your age and immaturity, there is relatively little that can be said by way of mitigation. The DPP was right to describe your conduct as the worst instance of insider trading to have come before the courts in this country’.
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Lukas Kamay was convicted and sentenced in relation to:
- Four counts of insider trading contrary to section 1043A and 1311(1) of the Corporations Act 2001 (Cth). The maximum penalty for each offence is 10 years imprisonment.
- Two counts of dealing in identification information using a carriage service contrary to section 372.1A of the Criminal Code (Cth). The maximum penalty for each offence is 5 years imprisonment.
- One count of dealing in proceeds of crime $100,000AUD or more contrary to section 400.4(1) Criminal Code (Cth). The maximum penalty for the offence is 20 years imprisonment.
- Four counts of abuse of public office contrary to section 142.2(1) Criminal Code (Cth). The maximum penalty for each offence is 5 years imprisonment.
- One count of dealing in identification information using a carriage service contrary to section 372.1A Criminal Code (Cth). The maximum penalty for each offence is 5 years imprisonment.
- One count of insider trading contrary to section 1043A and 1311(1) of the Corporations Act 2001 (Cth). The maximum penalty for each offence is 10 years imprisonment.