Jan 14, 2013

One set of rules for the powerful, another for coal activists

The coal hoaxer has stung ASIC out of its timidity and lethargy. It seems there's one set of rules for the wealthy and powerful, and another for coal activists living in a forest.

Adam Schwab — Business director and commentator

Adam Schwab

Business director and commentator

It’s hard to tell which reaction has been more inappropriate to the Jonathan Moylan-Whitehaven Coal hoax. Was it the Australian Securities and Investments Commission, Australia’s usually timid corporate regulator, which allowed scores of executives and directors to walk away from smouldering companies, or the financial media, who not only perpetuated the hoax, but completely fail to understand the effects?

Then there are concerns that Moylan’s prank may have damaged the “integrity” of the market. Leaving aside the fact that sharemarkets have never had much integrity anyway (anyone who doubts that need only look at the share price of companies prior to “confidential” takeover announcements being made) — those who actually lost money as a result of the Moylan hoax were both foolish and greedy.

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6 thoughts on “One set of rules for the powerful, another for coal activists

  1. dazza

    Financial institutes are too big to fail, AND too big for jail!

  2. Mike Flanagan

    If Moylan is to be hung drawn and quartered by the Authorites that supervise the ‘casino’ then ASIC should read Merv King’s departing comments and the HSBC report on Climate Change in relation to stranded assets.
    There are a number of CEO’s, Board warmers and ‘market’ operators that need to have their public statements reviewed and accounted for under the same microscopic eye.

  3. David Hand

    It is vital that announcements that may affect share prices be communicated openly and quickly to protect investors. It is also vital that such announcements are valid and correct and not made up.

    Therefore the issue is only and entirely one for the regulators. How a false announcement was accepted as fact and circulated in the media simply shows up the lax controls and systems that should protect people.

    Moylan may well have been in the wrong to do what he did but the fact that he got as far as affecting the share price of Whitehaven isn’t his fault.

  4. Tim Keegan

    The wealthy and powerful will always be with us.

  5. Marty

    No, Tim, they’ll always be against us.

  6. ralph

    Don’t make me laugh: ”As a nation we have to be seen as a place where there is an orderly market in operation or overseas investors will get nervous,” says Craig Drummond, the Australian head of Bank of America Merrill Lynch.

    ”We are already battling against a high dollar, which is a risk for overseas investors. That’s why the regulators, it would seem, are taking firm action [against Moylan’s hoax].

    ”If our regulators are seen to prevaricate, then overseas investors will have one more reason to be nervous about Australia.”

    In 2002, Merrill Lynch settled for a fine of $100 million for publishing misleading research. As part of the agreement with the New York attorney general and other state securities regulators, Merrill Lynch agreed to increase research disclosure and work to decouple research from investment banking.

    On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission (SEC) over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill.

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