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3/7/2021

The Sure Thing podcast: How Facebook helped crack Australia’s biggest insider trading scam

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How Facebook helped crack Australia’s biggest insider trading scam

Angus Angus Grigg Grigg National affairs correspondent Updated Feb 22, 2021 – 4.08pm, first published at 2.43pm

was executed from a toilet cubicle at NAB’s Melbourne headquarters, before the case was eventually cracked with the help of Facebook and more than 80 officers from the Australian Federal Police. Surveillance cameras installed around the bank’s dealing room in 2014 captured currency trader Lukas Kamay taking his desk phone off the hook, picking up two mobile phones and heading for the bathroom just before the release of crucial economic data from the Australian Bureau of Statistics.

Kylie Standing from the AFP speaks about Australia’s biggest insider trading case. Paul Harris

The insider story of how police caught Kamay and his university friend, Christopher Hill, who was passing confidential ABS data to the NAB trader, is The Sure Thing Thing. detailed in The Australian Financial Review’s new podcast, The TheSure SureThing Thing The six-part series charts how Kamay turned $10,000 of seed money into $7.8 million in just nine months, while betraying Hill at the first opportunity and forcing police to use the type of tactics usually reserved reserved reservedfor for foraaamafia mafia mafiasting sting stingto to tocatch catch catchthe the thepair pair pair.

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The Sure Thing podcast: How Facebook helped crack Australia’s biggest insider trading scam

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Mr Wealands, who led the 2014 investigation, speaks publicly for the first time as does his AFP colleague, Kylie Standing, and veteran ASIC investigator Raymond Waschl. “Yes, I felt the pressure. I mean everyone from my boss to their boss or their boss’ boss was very, very interested in the outcome of this investigation,” said Mr Waschl. “This is probably one of the biggest matters that ASIC has been involved in.” The Sure Thing charts the formulation of a near-perfect plan by Hill and Kamay during a “two-day piss-up” at a beach house on the Mornington Peninsula and how it sparked the largest joint investigation ever undertaken by ASIC and the AFP. Hill, who worked at the ABS and passed the highly confidential economic data to Kamay, recorded more than six hours of interviews for The Sure Thing detailing his role in the crime.

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3/7/2021

The Sure Thing podcast: How Facebook helped crack Australia’s biggest insider trading scam

He said that despite the economic data being among the most sensitive in the country, he simply wrote the figures on “scraps of paper”, put them in his pocket and took them from the ABS headquarters in Canberra. Kamay, who was working on NAB’s foreign exchange desk after a stint at Goldman Sachs, traded using the insider information for nine months before being arrested, along with Hill, in May 2014.

In one 25-minute burst of trading, Kamay made $2.54 million. This involved a giant trade which saw him take out $450 million of exposure to the Australian dollar, using leverage of 400 times. “It was just so over the top and got so out of hand so quickly,” said Joel Murphy, who was head of sales for global derivatives broker Pepperstone at the time and alerted ASIC to the trading. “We all talked about it in the office ... why is he going so hard?” said Mr Murphy. “He just dug himself into such a big hole so quickly.” Mr Murphy left Pepperstone in 2014 to start his own foreign exchange broking firm, Eightcap. Kamay went well beyond the plan agreed with Hill, which was to make only $200,000 from the insider information, before paying tax and splitting the profits. Hill had received just $20,000 for his part in the crime at the time of his arrest, while Kamay paid $2.3 million for an apartment from The Block TV show and was looking at buying a Ferrari.

Joel Murphy, who was head of sales at Pepperstone, turned to LinkedIn and then Facebook after becoming suspicious. “We all talked about it in the office ... why is he going so hard?” Wayne Taylor

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The Sure Thing podcast: How Facebook helped crack Australia’s biggest insider trading scam

that Kamay was getting it right too often, in a highly volatile and speculative market. “Initially, there was a lot of small trades from one trader – they were all correct, as in he had a strike rate of 100 per cent,” said Mr Murphy. “Getting it right like that is pretty rare.” Mr Murphy quickly discovered, via LinkedIn, that Kamay worked on NAB’s foreign exchange desk and initially thought he might be front running client orders. But then Kamay’s pattern of trading showed he was only active around the release of ABS data. That’s when Mr Murphy turned to Facebook. “So I scan through Lucas’ friends, just to see if anyone had, you know, possibly worked in government,” said Mr Murphy. “He had 300 friends at that time, so it took me a little while to flick through, but there was one person that … had Canberra in their profile ... and they went to uni with him [Kamay].”

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That person was Hill. Some further Googling would reveal he worked at the ABS. After some further investigation Mr Murphy called ASIC, which quickly brought in the AFP. But it would take authorities a further three months to arrest Hill and Kamay, who surprised police with their sophisticated trade craft. “I didn’t expect them to be so disciplined in their use of covert phones and the like to share that information,” said the AFP’s Mr Wealands. Listen to the first episode of

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your podcasts or on Apple Apple, Google, Spotify Spotify Spotify. here here. Apple Google Google Spotify Read all the related stories here here

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