The Australian Securities and Investments Commission (ASIC) has issued an announcement that it will be conducting an investigation into the preemptive spike in the rates of the Australian dollar. This morning, seconds before the announcement by the Reserve Bank of Australia (RBA) that the interest rates will be left unchanged, the AUD/USD spiked higher by more than half a cent.
While thin market liquidity may be amongst the reasons for the move, suspicions about an information leak have arisen in the aftermath of the announcement. The Australian regulator has confirmed that it will be investigating the Australian dollar’s movement.
According to the announcement, ASIC has already been investigating foreign exchange movements shortly before RBA’s announcements in February and March 2015. While the watchdog is not providing any further information, the investigation is well placed.
Last month, a ruling by the Supreme Court of Victoria detailed the biggest case of insider trading on the foreign exchange market in the history of Australia. The perpetrators, Lukas Kamay and Christopher Hill, have been charged on multiple counts and pleaded guilty.
The scheme was conducted between August 2013 and May 2014, when Kamay was caught after being reported by two brokers to the Australian Securities and Investments Commission (ASIC). The duo were arrested shortly after ASIC and the Australian Federal Police launched a joint investigation into the matter.
While Hill was working at the Australian Bureau of Statistics as an analyst, he provided Kamay with insider information, who executed trades on the over-the-counter foreign exchange market. While the statistician participated mainly in the analysis of monthly labor figures, he provided the trader with other data as well.