The head of the stockbroking firm founded by Australia’s highest-profile insider trader – the late Rene Rivkin – has warned the current $7 million trading scandal is just the tip of the iceberg

Trading ‘tip of iceberg’

May 13, 2014

Patrick Durkin and Ben Butler

The head of the stockbroking firm founded by Australia’s highest-profile insider trader – the late Rene Rivkin – has warned the current $7 million trading scandal is just the tip of the iceberg.

Scott Schuberg’s warning came as more details emerged about alleged insider trader, Lukas Kamay, including that he recently started a sports watch company with a family friend. He was also being conscripted to speak to accounting and commerce students at his former university, around the same time as he allegedly began trading.

Mr Kamay, who faces seven criminal charges, was asked to provide insights about the world of trading in financial markets ”that only experience can provide”, according to a Monash University website which has now been removed.

Senior stockbrokers said that the trades, made within the unregulated $5 trillion foreign exchange markets, only came to light because of the unsophisticated nature of the alleged scam and a tip-off by their stockbroker to police.

”For every 26-year-old kid insider trading, there are probably 10 smarter men and women not stupid enough to settle their trades through Australian FX market makers who know their clients’ profitability intimately,” the chief executive of Rivkin, Mr Schuberg, told clients in a broking note on Monday. Mr Schuberg admitted while ”the pot was calling the kettle black”, he was in a ”special position” to comment on the case. The late Rene Rivkin was convicted for insider trading in 2003.

Mr Kamay and his university friend Christopher Hill – both released on bail – were arrested on Friday after an AFP operation.

Mr Hill is alleged to have passed on key Australian Bureau of Statistics data to Mr Kamay, so that he could invest on fluctuations in the Australian dollar moments before the official release of the data at 11.30am on the relevant days.

Federal Police have uncovered two accounts Mr Kamay held at foreign exchange firm AxiCorp where he made profits of more than $5 million, in addition to the two held at rival Pepperstone Financial where he made around $1.5 million.

Rivkin’s Mr Schuberg said both NAB and the ABS deserved to face robust public scrutiny.

”The reality is that the reputations of both of these organisations SHOULD be damaged, because that’s the only way they’ll focus on deeper cultural reform,” he said.

It has also emerged that Mr Kamay and his business partner, Melbourne accountant Adrian Zuccarelli, registered the trademark ”LAP” as a brand name for watches, jewellery and sportswear, in November last year.

Mr Zuccarelli said the plan was to develop a range of ”very cheap” sporty silicone watches through a company run by the two men, LA Promotions, but the venture never went ahead.

”It was just going to be simple – it was just going to be silicone watches, probably get into the golf industry,” he said. ”It’s something that might have worked, might have not.” There is no suggestion Mr Zuccarelli had anything to do with the alleged insider trading.

The AFP has frozen Mr Kamay’s assets, including two blocks of undeveloped land worth a total of $409,000, one in Darley, just north of Bacchus Marsh worth $289,000 and another in Sebastapol worth $120,000. They have also frozen his purchase of a $2.4 million three-bedroom loft apartment in Albert Park.

Politicians, including Nationals senator John Williams, chair of the Senate economics committee, yesterday called for the government to be given greater powers to supervise the foreign exchange markets. However ASIC was expected to join other government agencies in facing a 10 per cent cut to its $341 million budget in Tuesday’s federal budget.

With Joanna Heath and Sally Rose

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

One Response to The head of the stockbroking firm founded by Australia’s highest-profile insider trader – the late Rene Rivkin – has warned the current $7 million trading scandal is just the tip of the iceberg

  1. Jeff G says:

    Thanks, thanks a lot for this kind of work. Trading in stock market is complicated. So help is always useful. Thanks.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

<span>%d</span> bloggers like this: