Moylan's moment cost millions

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."

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.

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.

Jonathan Moylan, who has admitted to sending the fake media release, must look like easy meat. A successful prosecution with a long jail term would be worn as a badge of honour when ASIC executives visited board rooms in glass towers."

Crown's Counsel described how Moylan's deception had involved "extensive planning and premeditation", including setting up the email address media@anzcorporate.com at a cost of $27, copying the ANZ logo from the bank's website and using the name of a real ANZ communications spokesman in his media release. Moylan had also listed his own mobile number and changed his voicemail to the name of the legitimate ANZ employee.

At the same time, Crown's Counsel noted all previous cases brought under the false and misleading information provision of the corporations law had involved personal and selfish intentions, such as the desire to make a profit. As Moylan's case differs in this respect, a custodial sentence was not sought. Instead, the court discussed the possibility of an assessment for an intensive correction order where Moylan would be required to wear an electronic bracelet.

The hearing continues.

Dr Matthew Rimmer, Associate Professor at the Australian National University College of Law, reports there has been a series of legal battles where environmental activists have harnessed tactics such as hoaxes, impersonation and identity correction which have led to charges of civil disobedience, corporate fraud, misleading and deceptive conduct.

These kinds of actions are known as culture jamming - a concept derived from radio jamming where public frequencies are pirated and subverted for independent communication, or to disrupt dominant frequencies. Identity correction involves the impersonation of representatives of companies, governments and international institutions in order to criticize the absurdity of their discourse.

In the USA, similar protest tactics have led to charges of copyright infringement, trademark infringement, trademark dilution, unfair competition, false advertising and cyber-squatting. For example, in 2009, the Yes Men staged a press conference, pretending to be the United States Chamber of Commerce and announced the Chamber had decided to support substantive legislative action on climate change. Then they published a media release and set up a website. The resulting court action was eventually withdrawn so it remains unknown how the judge would have dealt with the case.

If nothing else, it can be certain there will be a continuing plethora of perplexing questions for the courts to ponder as climate activists continue to clash with the richest and most powerful industry on earth.

Activists now have better access to legal assistance. Australian organisation, Activists Rights, helps "Australian activist networks and movements face the police and legal system, build resilience against repression and to keep working for a better world." Electronic Frontier Foundation is an US-based collective of lawyers, policy analysts, activists, and technologists who uphold free speech, privacy, innovation and consumer rights in the courts.

Moylan's predicament may hold all the elements of a tragic-comedic stage drama, yet the final outcomes of court cases like this have the power to affect us all.