Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Moylan's moment cost millions

By Elke Nagy - posted Tuesday, 15 July 2014


In 2012, Australian environmental activist, Jonathan Moylan, sent out a fake press release which caused the share price of a coal company to crash by A$3 million.

He was back in the NSW Supreme Court in Sydney last Friday for his sentencing hearing. Over 50 supporters were gathered outside and the court room had to be changed to accommodate the crowd.

Moylan's fake press release was sent out on ANZ letterhead to 295 recipients at 98 media organisations. It stated the ANZ bank had cancelled its A$1.2 billion financial loan facility from a Whitehaven's coal mine project in New South Wales on "environmental and ethical grounds."

Advertisement

The information was published, causing the share price of Whitehaven Coal to fall from $3.52 to $3.21, leading to a $314 million reduction in the company's market capitalisation. A trading halt was called less than an hour later. The share price rapidly recovered. In the end, total actual investor losses amounted to about $450,000.

Moylan pleaded guilty to one offence of disseminating false information to the market under the Corporations Act, and faces a possible maximum penalty of 10 years in jail or a fine of up to $765,000, or both.

His lawyers argued he had only intended to draw attention to the bank's $1.26 billion loan facility to Whitehaven Coal for its Maules Creek coal project. Moylan simply wanted to embarrass the bank. He believed the bank's decision to fund an environmentally damaging project confounded its image as an environmentally friendly company.

Moylan further claims he didn't intend for events to further unfold as they did, or to hurt any individual investors. On that issue, Professor of Public Ethics, Clive Hamilton, says, "Others closer to the markets, including an ASX spokesman, have argued that investors (in the market for the longer term) are unlikely to have lost money. Only "high-frequency traders" who sold impulsively within the 39 minutes between the issuing of the media release and the trading halt lost money.

"Speculation on short-term share price changes makes no contribution to the real economy and is an essentially parasitic. Despite commentators talking up losses of $300 million (the fleeting decline in Whitehaven's market capitalization) in fact the total losses were less than $500,000. And for every gambler who sold at a loss there was another who made money that day."

Moylan's defence maintains the media was partly to blame for the impact of the hoax as any decent business journalist would have verified the information with the ASX prior to publishing such a market-sensitive announcement. Media Watch, Australia's leading forum for media analysis and comment, concurs with this view.

Advertisement

Clive Hamilton also believes the most harsh penalties were initially sought as a result of "business hysteria" and political sensitivities.

"For some years ASIC has been the subject of stinging criticism for its string of litigation failures... The press have accused the regulator of "incompetence in conducting litigation", incompetence that "calls into question … ASIC's ability to fulfil its role as a corporate watchdog"...

"Those who work in corporate law describe ASIC as "media-driven" and determined to prove itself by ramping up the number of prosecutions it can put into its annual report. In its 2012 report it boasts of 14 criminal proceedings in the area of market manipulation, leading to 13 convictions and 10 imprisonments.

  1. Pages:
  2. Page 1
  3. 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

9 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Elke Nagy is a freelance writer and visual artist with an academic background in law, philosophy and science.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 9 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy