ASIC probes bank tax leak

The corporate watchdog is investigating whether there were “unexplained or unusual” profits made trading shares in Australia’s five biggest banks on the day of the budget, as part its probe into the leak of the bank tax.

Rumours that a bank tax would be announced in the budget helped wipe off some $14 billion in market value of the lenders on May 9, and the watchdog on Wednesday revealed details of investigation into the leak.

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Officials from the Australian Securities and Investments Commission said its monitoring systems detected the fall in shares prices of ANZ Bank, Commonwealth Bank, National Australia Bank, Westpac and Macqauarie Group on the morning of budget day.

The government did not announce the highly market-sensitive information until Treasurer Scott Morrison’s budget speech at 7.30pm that evening.

“We have been examining accounts that traded in the five stocks in the period before the rumours really commenced, so that we’re looking to see if anyone did profit in a way that is unexplained or unusual,” Ms Amour said,” ASIC Commissioner Cathie Armour said at a Senate estimates hearing in Canberra.

“We are talking with Treasury, and are gaining information about who knew about the proposal and the processes that were used, and we’re working with the AFP in connection with that.”

The probe will include whether investors may have profited from short-selling during the period.

ASIC chair Greg Medcraft said the investigation was in its early stages, but it was a high priority as market integrity was “golden.” 

“From my point of view, market integrity is golden, and we will hunt this down as much as we can, frankly,” Mr Medcraft said.

“Everyone is concerned in finding out where the leak came from, frankly. It’s not good for Australia.”

On the morning in question, there was market speculation of a bank tax, after Sky Business News had on Monday night reported the budget would include a tax on transactions between banks.

By lunchtime a more detailed report was published by the Australian Financial Review citing “banking sources,” and reporting that Secretary Treasury John Fraser would call bank chief executives later that evening. The news helped trigger a slump in the share prices of affected banks, which make up about a quarter of the ASX 200.

Ms Armour said the biggest fall before the lunchtime article was about 2 per cent, and there were other reasons for share price movements including one lender’s shares going ex dividend.

While Ms Armour said a 2 per cent fall was not a “significant” reduction, it was one that ASIC would want to look at and explain all the same.


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