Invest
The new weapon in insider traders’ arsenal
Insider trading activity could be in for a spike thanks to this global trend, and all Australians could be victims, a business law academic has warned.
The new weapon in insider traders’ arsenal
Insider trading activity could be in for a spike thanks to this global trend, and all Australians could be victims, a business law academic has warned.
According to Dr Juliette Overland, associate professor at the University of Sydney Business School, insider trading on the world’s stock exchange could be on the up, thanks to new technology.
The business law specialist said sophisticated hackers are using both computer and communications technology to potentially push share prices up by as much as 10 per cent.
“In the past we tended to think of insider trading as an activity primarily engaged in by people connected to a company, because they were the only ones who had access to inside information,” Dr Overland said.
“These days, outsiders, such as sophisticated hackers, are using technology to try to gain access to inside information held by companies, regulators and other organisations.”
She said stock markets are now witnessing gangs attempting to hack computer systems to gain access to privileged information prior to market availability.
The problem is that it’s not just companies who are vulnerable, Dr Overland said. It’s regulators too.
“Unfortunately for ASIC, it has itself been involved in a technology glitch that enabled people to see on its website the information that others had been accessing, which raised privacy and potential insider trading concerns,” she said.
Once the data has been accessed, modern communications technology assists in the dispersal, Dr Overland continued.
However, it also allows regulators to track down the traders and hackers.
“In the US last year, an academic at MIT was charged with insider trading after he searched questions online such as ‘how do I do insider trading?’, and ‘how does the regulator detect insider trading?’” she said.
We’re all victims
While the first victim in an insider trading hit is the counter party to the trade, and due to share trading’s anonymous nature, most traders never know that the person they traded with was aware of inside information before the trade.
However, it’s not just traders who are impacted, Dr Overland said, refuting the idea that insider trading is a victimless crime.
She said, “All of us have the potential to be victims of insider trading because almost every working Australian has superannuation and the latest figures show that there’s over $2.1 trillion worth of superannuation held on behalf of Australian workers and about 22 per cent of that is invested on the Australian stock exchange, which is about $4.6 billion worth.
“If insiders can take advantage of the trading that’s occurring for our benefit, we can all potentially be the victims of insider trading, and it’s our future that will suffer if insider trading laws can’t be properly regulated and enforced.”
RELATED ARTICLES
Property
New investment platform Arkus allows Australians to invest in property for just $1
In a groundbreaking move to democratise investment in property-backed mortgage funds, GPS Investment Fund Limited has launched Arkus™, a retail investment platform designed to make investing ...Read more
Property
Help to Buy goes live: What 40,000 new buyers mean for banks, builders and the bottom line
Australia’s Help to Buy has opened, lowering the deposit hurdle to 2 per cent and aiming to support up to 40,000 households over four years. That single policy lever will reverberate through mortgage ...Read more
Property
Australia’s mortgage knife‑fight: investors, first‑home buyers and the new rules of lender competition
The mortgage market is staying hot even as rate relief remains elusive, with investors and first‑home buyers chasing scarce stock and lenders fighting for share on price, speed and digital experienceRead more
Property
Breaking Australia’s three‑property ceiling: the finance‑first playbook for scalable portfolios
Most Australian investors don’t stall at three properties because they run out of ambition — they run out of borrowing capacity. The ceiling is a finance constraint disguised as an asset problem. The ...Read more
Property
Gen Z's secret weapon: Why their homebuying spree could flip Australia's housing market
A surprising share of younger Australians are preparing to buy despite affordability headwinds. One in three Gen Z Australians intend to purchase within a few years and 32 per cent say escaping rent ...Read more
Property
Tasmania’s pet-positive pivot: What landlords, BTR operators and insurers need to do now
Tasmania will soon require landlords to allow pets unless they can prove a valid reason to refuse. This is more than a tenancy tweak; it is a structural signal that the balance of power in rental ...Read more
Property
NSW underquoting crackdown: the compliance reset creating both cost and competitive edge
NSW is moving to sharply increase penalties for misleading price guides, including fines linked to agent commissions and maximum penalties up to $110,000. Behind the headlines sits a more ...Read more
Property
ANZ’s mortgage growth, profit slump: why volume without margin won’t pay the dividends
ANZ lifted home-lending volumes, yet profits fell under the weight of regulatory and restructuring costs—an object lesson in the futility of growth that doesn’t convert to margin and productivityRead more
Property
New investment platform Arkus allows Australians to invest in property for just $1
In a groundbreaking move to democratise investment in property-backed mortgage funds, GPS Investment Fund Limited has launched Arkus™, a retail investment platform designed to make investing ...Read more
Property
Help to Buy goes live: What 40,000 new buyers mean for banks, builders and the bottom line
Australia’s Help to Buy has opened, lowering the deposit hurdle to 2 per cent and aiming to support up to 40,000 households over four years. That single policy lever will reverberate through mortgage ...Read more
Property
Australia’s mortgage knife‑fight: investors, first‑home buyers and the new rules of lender competition
The mortgage market is staying hot even as rate relief remains elusive, with investors and first‑home buyers chasing scarce stock and lenders fighting for share on price, speed and digital experienceRead more
Property
Breaking Australia’s three‑property ceiling: the finance‑first playbook for scalable portfolios
Most Australian investors don’t stall at three properties because they run out of ambition — they run out of borrowing capacity. The ceiling is a finance constraint disguised as an asset problem. The ...Read more
Property
Gen Z's secret weapon: Why their homebuying spree could flip Australia's housing market
A surprising share of younger Australians are preparing to buy despite affordability headwinds. One in three Gen Z Australians intend to purchase within a few years and 32 per cent say escaping rent ...Read more
Property
Tasmania’s pet-positive pivot: What landlords, BTR operators and insurers need to do now
Tasmania will soon require landlords to allow pets unless they can prove a valid reason to refuse. This is more than a tenancy tweak; it is a structural signal that the balance of power in rental ...Read more
Property
NSW underquoting crackdown: the compliance reset creating both cost and competitive edge
NSW is moving to sharply increase penalties for misleading price guides, including fines linked to agent commissions and maximum penalties up to $110,000. Behind the headlines sits a more ...Read more
Property
ANZ’s mortgage growth, profit slump: why volume without margin won’t pay the dividends
ANZ lifted home-lending volumes, yet profits fell under the weight of regulatory and restructuring costs—an object lesson in the futility of growth that doesn’t convert to margin and productivityRead more
