ASIC Warns of Growing Insider Trading Cases, Gets About 30,000 Tip-Offs


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Insider trading is apparently on the rise in Australia. The Australian Securities and Investments Commission ( ASIC ) disclosed on Monday that it in investigating 35 alleged insider trading cases.

The probes were the result of almost 30,000 tip-offs that ASIC received. Of that number, 35 have been referred for formal investigation for insider trading and market manipulation. The regulator said the next step would be for the Director of Public Prosecutions to take criminal court action.

Since ASIC Chairman Greg Medcraft started his five-year term in June, the regulator has made six insider trading convictions.

"The message to anybody who's thinking about insider trading (is) we've got the systems, we've got the people, we've got the powers, we most likely will find out. Most likely if you're found guilty you'll go to jail," Mr Medcraft told ABC.

The campaign to file charges against insider traders is part of ASIC's priority to have a fair and efficient market for all Australians, he added.

At the same time, Mr Medcraft stressed he was not included in a U.S. Federal Housing Agency lawsuit against his former employer, the French investment bank Societe Generale over the bank's role in large sub-prime mortgage transactions that partly caused the global financial crisis in 2008.

The ASIC chairman, who worked for Societe Generale from 1999 to 2007, said he had oversight over the bank's securitization business in the U.S., but he was mainly responsible for structuring and advisory side.

"From my point of view, the appropriate internal controls were put in place in all the businesses that I was responsible for around the world," he told ABC. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Commodities

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