• 29 May 2009 at 4:06 PM

$51,634,606.22 + $4,260,850.63

By Equity Private

Are we surprised that the only big insider trading case in quite a while is somewhere outside of the SEC’s jurisdiction? We seriously doubt whether there is a dearth of large insider trading cases in the United States, but they certainly seem to have fallen by the enforcement wayside. Instead, and it pains us to say this, the SEC seems to be too busy tagging the likes of Mark Cuban to get its shit together.

On January 14 last year Berndale seized control of the account of How Trading, the account Mr Waterhouse held with Berndale to trade options, because it had breached its agreed margin-call levels.
After gaining control of How Trading, Berndale used it to short-sell $51,634,606.22 of blue-chip Australian shares — primarily the major banks and BHP Billiton. On January 17 last year Berndale then used How Trading to short-sell a further $4,260,850.63 of Commonwealth Bank shares.
On January 18 — or January 17 in New York — Merrill Lynch announced a $US9.83 billion fourth-quarter loss, including a $US16.7 billion write-down associated with subprime mortgage losses. Sharemarkets and bank stocks around the world tumbled on the news. In the three trading days after the Merrill Lynch announcement, the S&P/ASX 200 Index fell more than 10.5 per cent.

$55 million insider trading allegation [The Age]

Comments (11)

  1. 1
    Posted by merkin capital partners | May 29, 2009 at 4:10 PM

    How Trading also happens to be the question posed daily by my Asian coverage.

  2. 2
    Posted by guest | May 29, 2009 at 4:12 PM

    Fifty nine million three hundred eighty six dollas and seventy two cents is a lotta money!
    -Maxine

  3. 3
    Posted by guest | May 29, 2009 at 4:22 PM

    What the F happened in equities at the close?

  4. 4
    Posted by trojan | May 29, 2009 at 4:49 PM

    @3
    inflation > deflation

  5. 5
    Posted by guest | May 29, 2009 at 4:51 PM

    Is this actually illegal? Berndale shorted non-ML shares on a foreign exchange (including a mining company) based on its knowledge of ML’s impending announcement. Admittedly, there’s maybe some strong correlation there, but is this really the best the SEC can dig up?
    I mean, the fucking water doesn’t even flow the same way down there.

  6. 6
    Posted by guest | May 29, 2009 at 4:56 PM

    @3 a little spit shine and polish put on by the program traders.

  7. 7
    Posted by trojan | May 29, 2009 at 4:59 PM

    -That’s not a knife. THIS is a knife!
    -That’s not a knife, that’s a spoon.
    -Ah, I see you’ve played knifey-spoony before.

  8. 8
    Posted by guest | May 29, 2009 at 5:08 PM

    @7, Funny name, I’d have called them Chazzwozzers

  9. 9
    Posted by guest | May 29, 2009 at 6:00 PM

    @5
    The SEC isn’t involved, and neither is ASIC, the Australian regulator – it’s the client who is alleging the insider trading
    Bear in mind that this is a country that has 10 successfully prosecuted insider trading cases in the last 11 years. It’s not exactly top priority for the regulator

  10. 10
    Posted by guest | May 29, 2009 at 10:58 PM

    @3
    rumoris JPM became a large buyer of s&p futures about 3 minutes to 4pm. That size drove the s&p futures above 200 dma.

  11. 11
    Posted by guest | May 29, 2009 at 10:58 PM

    @3
    rumor is JPM became a large buyer of s&p futures about 3 minutes to 4pm. That size drove the s&p futures above 200 dma.

Leave a comment

You can log in with your account or comment as a guest below.

   or