Futures Deals Spark Insider Trade Probe
The Age
Tuesday May 6, 2003
Sydney
ASIC and the Sydney Futures Exchange are investigating complaints of insider trading involving AMP's announcement of its demerger plan last Thursday.
On Wednesday, the futures contract for the Share Price Index (which represents the top 200 companies) plunged 35 points between 4.10pm and 4.30pm.
Institutions and investment banks pocketed more than $1 million from selling futures contracts during the period, amid what experienced traders said was the sharpest fall and highest trading volume in more than a decade.
Traders said there was no explanation for the selling other than insider trading. ``For the market to move the way it did for no apparent reason it's just too coincidental," said one trader. ``They've just chased Rivkin for $2500 but millions have been made from this."
He said small investors had been ``screwed again", and he hoped they would demand genuine regulator intervention. The suspect deals occurred after the close of trade in ordinary shares and before AMP announced its demerger the next day. The fall in the futures contract was roughly proportionate to the anticipated - and realised - fall in AMP share prices.
Traders said Wednesday's futures activity was particularly unusual, given uneventful share trading on the ASX during the day and on Wall Street later that night.
The SFE is working to identify the brokers behind the suspect trades. ``Our compliance and surveillance teams will be looking at this," a spokesman said. ``Exceptional moves of that size are always looked at . . ."
But the privately owned exchange said it was yet to start formal inquiries, explaining that the claims involved ``a major customer and client". Sources confirmed yesterday that the Australian Securities and Investments Commission had been asked to help with inquiries.
The Australian Stock Exchange said it had examined trading in ordinary AMP shares but had not found any unusual dealings.
Insider trading laws, which prohibit trading on price-sensitive information, were extended last year to cover share derivatives including futures contracts.
© 2003 The Age