Lukas Kamay, a former banker at National Australia Bank (NAB), and former Australian Bureau of Statistics (ABS) employee Christopher Hill were involved in the scheme, which they originally intended would make them $100,000 each.
Supreme Court Justice Elizabeth Hollingworth said the scheme was the worst case of insider trading ever to come before Australian courts.
“NAB does not condone any unlawful behaviour at work or outside work,” said a NAB spokesperson. “NAB fully cooperated with the AFP and ASIC during their investigations into the activities of the former employee. The crimes do not relate to the former employee's work at NAB. No NAB money and no NAB customer money was involved. As the Australian Federal Police have made clear, no NAB systems have been involved in any trading and no other NAB employee is involved.”
The Sydney Morning Herald reported that Hill abused his position as a Commonwealth public official by copying embargoed information by hand to pass onto Kamay.
The judge stated that the offenders were motivated by “personal greed, pure and simple”.
Kamay, however, claimed that he was driven by NAB’s culture which pushed employees to make money and be successful.
A psychological report on Kamay revealed he felt pressure to succeed in a highly competitive work environment in order to impress others, and had displayed some symptoms of inflated self-esteem or narcissistic personality traits.
According to NAB’s careers website, the organisation encourages employees to “deliver exceptional outcomes that push the limits of expectations”.
However, its first priority listed under the company’s “beliefs and behaviours” is “to do the right thing”.
This involves “acting in the interests of our customers and communities, taking a long-term view and making decisions and taking actions that support the sustainability of our relationships and brands,” the website maintains.
The banks corporate culture also strives to “be authentic and respectful” – arguably, Kamay was selective in his understanding of NAB’s established work environment.
The scheme was instigated by the duo with the intention of making $200,000 in a year between them.
Hill agreed to use his position as the ABS headquarters in Canberra to send his accomplice employment, trade and retail figures moments before their official release.
Kamay would then use the data to make trades on currency markets based on which way the Australian dollar was due to go.
Kamay eventually made more money than expected, setting up three secret trading accounts in which he stashed $7.2 million.
The conspirators were arrested last May following a joint investigation by the Australian Federal Police and ASIC, which lasted for four months and began following a tip-off from a stockbroker about a link between Kamay and Hill.
The judge found that using inside information to gain an unfair advantage over other traders in the market was a form of cheating or fraud.
“Insider trading is a serious criminal offence because it can undermine the integrity of markets, and diminish public confidence in the commercial world,” she said.
Kamay was sentenced to seven years and three months imprisonment with a non-parole period of four and a half years after pleading guilty to insider trading, money laundering and identity theft charges, while hill was jailed for three years and three months with a non-parole period of two years.
Two men who were found to be culprits of a $7 million insider trading scheme have been jailed.