by Alan Thornhill
A sophisticated internet hacking operation, targeting Australian investors was brought to a sudden halt in the NSW Supreme Court today.
That happened when the court ordered that restraints be placed on more than $77, 000 worth of suspected illegitimate profits flowing from the scheme.
In a statement later, the corporate watchdog, the Australian Securities and Investments Commission, said its surveillance team had detected unauthorised trades, made by a suspected Russian hacker who hacked into a number of retail client accounts held with Commonwealth Securities Limited, Etrade.
These trades had occurred between 18 August 2014 and 21 October 2014,
ASIC said immediate action was taken – with the assistance of Morgan Stanley – to prevent the profits being distributed.
The Commission then watched developments closely.
It recalled today that by using the hacked client accounts, the suspected Russian hacker had targeted 13 penny stocks listed on the Australian Securities Exchange artificially inflating their price in later trades.
” Subsequent to this trading the suspected Russian hacker then traded out of the positions, collecting the profits generated,” ASIC added.
Swift action followed.
ASIC recalled, in its statement today, that it had referred the matter to the Commissioner of the Australian Federal Police.
The Commissioner had then made an application to the NSW Supreme Court for restraint to be placed on $77,429.61 under the Proceeds of Crime Act 2002.
The resraint was ordered and the matter has been adjourned until February 2016.
ASIC Commissioner Cathie Armour said, ‘ASIC will continue to work with its partners here and overseas to help smash any criminal activity that is targeting our market.
‘ASIC has a world-class surveillance system to gather, match and analyse data to uncover misconduct, and its staff continue to monitor and detect suspicious trading activity and work with market participants to ensure account hacking is swiftly identified and stopped.’
ASIC also works with international regulators through the Intermarket Surveillance Group as part of its crackdown on security for online broking accounts.
The police also had a warning for those who might be tempted by the prospect of easy profits.
AFP Manager of the Proceeds of Crime Litigation team (POCL) David Gray said the result of this joint investigation should serve as a strong reminder to those who wish to conduct illegal money laundering activities in Australia.
‘Despite efforts by criminals to evade detection, the AFP and its law enforcement partners remain committed to taking the profits out of crime and will take every opportunity to stop criminals from reinvesting these profits to fund other criminal ventures,’ Mr Gray said.
by Alan Thornhill
Fraud has cost the Commonwealth $530 million in recent times, according to a new report
The report by the Australian Institute of Criminology exposes 265,866 cases of suspected internal and external fraud between 2010-11 and 2012-13
In one, the Director of a family day care business is alleged to have claimed Child Care Benefit subsidies totaling $3.6 million to which she was not entitled.
The accused woman is alleged to have created and lodged false documents with the Department of Human Services to support her claims.
The Federal Justice Minister, Michael Keenan, revealed this in a statement today.
He said the report shows why the multi-agency Fraud and Anti-Corruption Centre (FAC Centre) is vital in the fight against serious fraud and corruption.
The Centre was established within the Australian Federal Police (AFP) a year ago and combines the resources and expertise of nine agencies.
Mr Keenan said the centre had been designed to tackle serious, complex fraud and corruption.
It ensures that suspected crimes are quickly directed to the right law enforcement agencies for action.
The agencies within the FAC Centre have access to intelligence resources, like the Australian Crime Commission’s National Criminal Intelligence Fusion Capability.
So they can draw on specialists, data and analytics to develop their own fraud-related intelligence.
Mr Keenan cited the case of Operation Agron, in which the Australian Federal Police led joint agency investigation, in which the Department of Human Services and the Department of Social Services also participated.
That led to the execution of multiple search warrants in the Albury-Wodonga area and the arrest of a 27 year old woman.
“The alleged offender is currently before Court, facing charges of: obtaining financial advantage by deception, using forged documents, falsification of documents and dealing in proceeds of crime worth $1million or more,” Mr Keenan said.
Property and cash worth more than $2.4 million had also been restrained by the AFP as part of an associated proceeds of crime action, he added.
Mr Keenan’s message to those who are tempted is blunt.
“Perpetrators of fraud are on notice.
“You will be caught.
“The Commonwealth will utilise every resource at its disposal to tackle fraud head on,” he said.
And just what are those resources?
In a word, formidable.
Mr Keenan said the FAC Centre brings together the Australian Taxation Office, Australian Securities and Investments Commission, Australian Crime Commission, Australian Transaction Reports and Analysis Centre, Department of Human Services, Department of Immigration and Border Protection, Department of Defence, Department of Foreign Affairs and Trade, Attorney-General’s Department (Advisory Participant) and Commonwealth Director of Prosecutions (Advisory Participant) in order to assess, prioritise and respond to serious fraud and corruption matters.
Like to know more?
The Fraud against the Commonwealth: Report to Government 2010-11 to 2012-13 is available at http://www.aic.gov.auwww.aic.gov.au
by Alan Thornhill
Australia’s consumer protection laws are to be overhauled less than five years after they were introduced.
The Federal Minister for Small Business, Bruce Billson, said this had been agreed with his State counterparts.
He said the review would assess the law’s impact on both consumer protection and streamlining business regulation.
Mr Billson said he wants consumers and business people to make their views known.
More information is available at www.consumerlaw.gov.au
by Alan Thornhill
A Port Macquarie man has been convicted and fined for managing a company while bankrupt.
Grant John Hives had pleaded guilty in the Port Macquarie Local Court to managing T H Tippers Pty Ltd, while he was a bankrupt.
His conviction followed an investigation by the industry watchdog, the Australian Securities and Investments Commission.
In a statement today ASIC said Hives had been declared bankrupt in May 2013.
That had followed a creditors’ petition.
“The Corporations Act 2001 prohibits a bankrupt from managing corporations,” ASIC said.
But it added that in June 2013 T H Tippers Pty Ltd was registered with ASIC and Mr Hives’ 18 year old daughter was nominated as the sole director.
However ASIC said its investigation found Mr Hives made decisions that affected the whole or a substantial part of the business.
He had also communicated instructions or wishes to his daughter knowing that she would act in accordance with them.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions, ASIC said.
by Alan Thornhill
The week ahead won’t be a comfortable one for Tony Abbott.
As Federal parliament resumes for two weeks of winter sittings, the Prime Minister knows that he will be facing intense scrutiny.
Not least over allegations that Australian officials paid people smugglers, to turn their boats back to Indonesia.
The Indonesian government, understandably, wants an explanation.
The Australian Greens want an investigation.
But it is questioning in Parliament, itself, that is most likely to embarrass the Prime Minister on this issue.
Mr Abbott shocked many last week, when he dodged questions on the payments, first reported in Fairfax newspapers.
That was in a Sydney radio interview.
He said, instead: “What we do is stop the boats by hook or by crook.”
“Because that’s what we’ve got to do and that’s what we’ve successfully done.”
A bold strategy, perhaps.
But would it impress a jury?
The Opposition Leader, Bill Shorten, has already served notice that he intends to go in hard, on this issue.
He told reporters last week:” I think the reports are jaw dropping.
“To hear reports that we’re paying wads of cash to people smugglers not to bring people to Australia is most alarming.
“We shouldn’t be turning the Australian Defence Forces into a floating ATM for people smugglers,” he thundered.
We can confidently expect more, along these lines, in Federal Parliament this week.
And it is much harder for any politician to dance around a question, in the full glare of Parliament, than it is, on the end of a telephone line, to a radio station in Sydney.
No doubt, though, Mr Abbott is taking some comfort from Mr Shorten’s critics, who have been saying, for some time now, that he simply “isn’t cutting through.”
Two developments, last week, suggest that there may well be some truth in that now common complaint.
The most powerful attack, on the government’s economic policy, in recent weeks, came not from Mr Shorten, but from Glenn Stevens.
The Reserve Bank Governor told economists in Queensland that spending more on roads and bridges may not be the best way to provide a short term stimulus to the economy.
That’s because it can be both hard to get that spending going on time – and hard to stop.
Yet timing is everything, with short term stimulus packages.
The Opposition has been overshadowed, too, in its criticism of Mr Abbott’s plan to strip terrorist suspects of their citizenship, in certain circumstances, without a trial.
Gillian Triggs, the President of the Human Rights Commission, attracted government anger by saying her real concern, on that score, was that the decision to strip citizenship would lie with a minister, rather than a court.
The Attorney-General George Brandis, hit back saying the government had lost confidence in Professor Triggs.
“The Human Rights Commission, in my view, is an important national institution,” Senator Brandis said.
And he added: “…it has to be like Caesar’s wife, it must both be – and be seen to be – above partisan politics.”
Professor Triggs does have her supporters.
The United Nations, no less, has urged senior ministers to stop attacking her.
Michel Forst, the UN special rapporteur on the situation of human rights defenders, wrote to the government in February calling on it to cease verbal attacks on her.
by Alan Thornhill
Bill Shorten is urging Australians to move towards an Australian Republic, with an Australian head of state.
The idea was last put to a referendum in 1999 – and rejected.
However Mr Shorten revived the republic debate last night, saying it is one of two changes needed to modernise the Australian Constitution.
He said the other is formal recognition of Aborigines, as Australia’s first people, in the Constitution.
The Opposition Leader raised these issues last night, while delivering a Lionel Bowen memorial lecture in Sydney.
He said: “People too young to vote in 1999 have children of their own now…and children born in 1999 will soon be eligible to vote themselves.
“A new generation deserves the chance to have a say.
“And the choice of when we become a Republic…should be our choice,” Mr Shorten said.
“…I believe we should go to our region and the world proudly, independently Australian – confident in our maturity and our identity,” Mr Shorten said.
“Not borrowing a monarch from another country on the other side of the world, not trusting to a hereditary system for choosing an approved ruler, but running the place ourselves.
“Like all Australians, I have tremendous respect for Queen Elizabeth, she has fulfilled her constitutional responsibilities with grace for many years.
“But I don’t believe we have to wait for a change of monarch to renew the Republic debate,” Mr Shorten said.
by Alan Thornhill
A Reserve Bank chief admitted today that financial authorities still have “some way to go” in restoring public trust that was lost in the Global Financial Crisis.
The Bank’s Deputy Governor, Philip Lowe, was Addressing Thomson Reuters’ 3rd Australian Regulatory Summit in Sydney.
He said there had been “a large wave of new regulatory requirements over recent years.
“The task of adjusting to these new requirements has been a time-consuming one for many of you,” he said.
“And that task is not yet over,” Mr Lowe added.
Then he said:”This wave of regulation, of course, has not just materialised out of thin air.
“Rather, it has been in response to the lessons learnt from the financial crisis.
“That crisis was extremely damaging for the citizens of many countries.
“And the subsequent spotlight on financial institutions has highlighted not just poor risk-management practices but also some serious lapses in governance and ethics.
“As the various problems have emerged, they have strained the bonds of trust that are so important in finance.
“In response, regulators, and financial institutions themselves, have sought to reduce the probability of a repeat of the crisis and to rebuild trust in finance.”
But then Mr Lowe added:” On both accounts, there is still some way to go.”
by Alan Thornhill
The Federal government is setting up a new task-force to fight serious organised financial crime.
The Treasurer, Joe Hockey, who made the announcement said this type of crime poses a real threat to national security and to the integrity of Australia’s economy, financial markets, regulatory frameworks and tax revenue collection.
“The Government will provide $127.6 million over four years for investigations and prosecutions that will address superannuation and investment fraud, identity crime and tax evasion,” Mr Hockey said.
He said the Serious Financial Crime Taskforce would include the Australian Taxation Office, Australian Crime Commission, Australian Federal Police, Attorney-General’s Department, Australian Transaction Reports and Analysis Centre, Australian Securities and Investments Commission, Commonwealth Director of Public Prosecutions and Australian Customs and Border Protection Services.
“The Taskforce will build on the good work already done by Project Wickenby which finishes in 2015,” he said.
“It will enable the best practice and experience gained to be continued, and for agencies to extend their cooperative work across the broader serious financial crime risk.”
Mr Hockey said Project Wickenby had – so far – raised over $2.1 billion in liabilities, as well as increased tax collections from improved compliance behaviour following interventions.
“Ongoing investigations and prosecutions have resulted in substantial sentences and strong deterrent messages in the sentencing judgments,” Mr Hockey said.
“To date, 76 individuals have been charged with serious offences and there have been 44 criminal convictions.
“The Serious Financial Crime Taskforce will have an unquantifiable positive benefit on the financial wellbeing of members of the community who, without the Taskforce, may be victims of financial crime,” he added.
“It will also help ensure all taxpayers pay their fair share of tax.”
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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