Two young men who became friends while attending university are before the courts and facing charges for " Insider Trading ". This case will shock the public for the simplicity involved - and the astounding amount of money the scam produced.
A 24 year old man was employed by the Australian Bureau of Statistics ( ABS ), a government department that compiles sensitive commercial information. His friend, 26 worked for one of the big Australian banks - and it is claimed that he paid $ 60,000 for access to ABS information that involved the likely rise and falls in the trading rate of the Australian currency.
His banker friend then used this information to trade in Australian dollars, and in just nine months accumulated a profit of over seven million dollars.
All that is completely illegal and no doubt the " Proceeds of crime " legislation will be used to strip him of his illicitly gained wealth and both young men will be disgraced and sacked from their jobs - and will probably do time behind bars - but this case throws the spotlight on the near impossibility of safeguarding the means to plunder profits by using " insider information ".
We have seen it all before. A celebrated case when an airline takeover bid became known to another player by way of a chance remark and a fortune changed hands. A guru of the financial world whose advice was sought whenever he spoke, accused of promoting certain shares to the public while quietly quitting his own holding in that company because he knew it was about to go public with it's difficulties.
It is not only the high flyers in the corner offices of the business district that gain secret information. It passes through many hands in the course of setting the scene for a possible takeover or merger and this includes secretaries who type confidential letters, law firms who give advice on possible legal ramifications and the families of those who casually discuss their days work at the dinner table.
One of the prime sources of insider information must be the political arena - and we have recently seen this where prime holiday land was being sold and applications made for licenses to mine coal. This weeks Federal budget would be a bonanza if an interested party could gain sure knowledge of what it contains - and the opportunity for leaks are immense. Even the printing of the budget papers for release on budget day must see the details pass through many hands for this process to be achieved.
It would be naive to think that insider trading is confined to the board rooms of big companies. It is a daily fact of life at all levels of commerce - from pending decisions at the local council to the inside secrets of trading firms that affect their shares prices. And it could be the reason for sudden and " unexplained wealth " amongst friends and colleagues !
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