How office worker made $7m while sitting on the toilet | insider trading scam | Australian Story

[Music] it's the greatest white collar crime story in the history of australia there's unbridled ambition of young men involved in an illegal enterprise i'm going to take you live now to canberra by the arrest of two men on charges of insider trading it wasn't just your typical vanilla insider trading investigation this involved the corruption of a commonwealth government employee today in melbourne and canberra the afp and rsec executed eight warrants see movies like the wolf of wall street but to actually see it play out in front of you i'm going to remember it for a while it's a story about two young men chris and lucas who do something reckless and and illegal and at its heart it's a it's a human story about greed and almost shakespearean deception do i still count lucas as a friend i mean well the day i left prison was the last time i saw him so probably not [Music] oh just before dawn 9th of may 2014 authorities bang on the door at a flat in canberra i thought they'd been a mistake they got in the wrong house [Music] i was 24 and up until that point in my life i'd never had any interaction with the law before the afp officer in charge got me to read through the search warrant as soon as i saw you know my name and lucas's name was right at that point that i knew exactly what it was about [Music] operation leaf was the code name that we gave the insider trading investigation which involved lucas camay and his university friend christopher hill chris's access to price sensitive government information was essential to lucas's plan to enrich himself in this case he saw an easy option with christopher hill [Music] chris hill or christopher hill he's a bit of an everyman he was a very sort of smart young guy effortlessly smart was how his friends described him i spent most of my childhood growing up in don vale in the eastern suburbs of melbourne i was very academic at primary school which carried on through to high school chris you just sort of had a gift doesn't really need to take a note or try all that hard it just sort of comes to him quite frustrating for everyone else but he's he's very capable and very competent [Music] growing up i always wanted to get into the corporate finance sort of world something in banking something with money numbers maths just made really logical sense to me it was very structured and that's kind of the way my brains wired and which is why i enjoyed it chris and lucas meet at monash university straight out of school when they're both doing the same degree commerce and economics you know he was a different breed to me in the sense that he was so super driven and ambitious to the point where he just had to succeed chris probably had a bit too much fun and quickly realized that his marks weren't going to be good enough to win a place at one of the sort of top financial houses in the country and so he ended up taking a the government job with the australian bureau of statistics all the abs as it's known it's a massively important government agency after two to three years i was promoted to a position where i was you know one of the people in charge of the labor force statistics in in particular everything um including employment rate unemployment rate the biggest economic indicators for the country i think in the beginning we all thought he was you know killing it having a great time and then after after a while he started to get over the job a little bit he was stuck in a rut and he wasn't necessarily looking for something else or looking for some excitement in his life but when it came along he was certainly happy to embrace it [Music] two years after chris and lucas had left university a group of friends came together down on the mornington peninsula you know a reunion if you like for the weekend i was just chatting with with someone about you know that i just got a promotion and was now doing the um labor force figures i remember lucas was there talking to someone else and he sort of spun around and said oh you know i can use those to make money or something like it was it was just a you know a massive throwaway comment um at the time and then that was the end of it that was it was nothing more than that that's really what kicked it off from my understanding is it's just this one throwaway line where luca says to chris wow you know i could use those numbers [Music] i met lucas a couple of times over at chris's house taking photos on me lucas was a very charismatic enthusiastic guy he seemed you know that he's done quite well for himself you know he's he's obviously come from you know good family he's come from a bit of money a bit of wealth i think for chris lucas represented success he had achieved a job that i think most people doing a commerce degree at that time in that place would have sought after working for a large international investment bank goldman sachs very shortly after he he gets a job with national australia bank and he is promoted fairly quickly through the ranks of nab and as a sort of 25 or 26 year old he's earning 200 000 a year he's driving a bmw roadster you know he's a guy that is doing pretty well about a couple of months after the party lucas called me and we had a fairly brief chat about exactly what information i had access to at the abs and also the fact that using that information we could be very profitable um you know through training on the um on the markets [Music] we caught up in melbourne at a pub and it was there that we discussed how i was going to get the information to him we decided that we'd have mobile phones that were registered in other people's names there wasn't a lot of thought put into the berna phones one of us must have just sort of had it in the back of our minds from i don't know from tv or movies or just general i don't know [Music] how this scheme worked was that chris would access the data from his abs computer he'd write it on a piece of paper he'd put it in his pocket he'd take it out of the building [Music] he would ring lucas on his burner phone and then basically as the sort of foreign exchange market works it's all around expectations so if the data was stronger than expected the australian dollar would typically go up in that case and so lucas would buy the australian dollar and when it went up he would sell it after that and that's when he'd make a profit so the plan was to hit a balance of hundred thousand dollars in lucas's account um he would then pay tax on it leaving us with um a hundred thousand dollars to be split in two or fifty thousand dollars each on september 12 2013 lucas and chris make their first trade about 30 seconds before the labor force figures were released at 11 30 a.m on that day lucas goes and buys some contracts um and then about sort of 26 seconds later he sells those contracts after the labor force figures have been released and he makes a profit of thirteen thousand five hundred dollars it was like that that feeling of okay we've done it we've achieved it and um yeah there was you know it was a good feeling did you have any nagging doubts about what you guys were doing yeah so very yeah very initially but after the first time um you know when i gave him the second number and then the third and the fourth like it just i started not really thinking twice about it um you know when you make a decision over and over again with no negative consequences you just you stop thinking about what you're doing really what lucas didn't tell chris was that he'd opened a second secret account and lucas in his in his secret account he'd made seven thousand seven hundred dollars when you think about what lucas did um basically at the first available opportunity he betrayed chris and i was very clear from that point on that he wasn't going to stop at 200 000 [Music] gradually as the months went on his trades got bigger and bigger so he's putting down more money and by the time we get up to christmas at that year you know he's setting off red flags everywhere lucas comey very quickly became one of the biggest traders in australia at the time he definitely would have been in the top three of pepperstone clients overall for volume pepperstone is a foreign exchange and derivatives broker that lucas traded with i was on the license as a responsible manager at pepperstone group so anything compliance related was definitely going to fall to me the first thing that sort of caught joel's eye if you like was the fact that lucas was winning all the time you know in the first few months he won 21 times in a row traders in our space if they're above 50 if they're above 55 they're doing a really good job i remember the moment when the red flags first went off i looked at three of the trades in a row and then just saw the fact that it was statistical data in each one and then we could clearly see the pattern was the abs joel looked through lucas's friends on facebook and one of those worked in canberra and so he looked up that person whose name was christopher hill and lo and behold the first line of search had a christopher hill and the abs i started to laugh right then and there i knew we had him joel picks up the phone to call asic it's joel murphy here from pepperstone the australian securities and investments commission have i come through to the right person to report this the complaint from joel murphy at pippenstein was very compelling to have that connection given to us gave us a head start on the investigation and this case was escalated almost immediately [Music] what we know from asic is that it's actually really difficult to catch people who are committing insider trading so asic very quickly made a decision to bring in the afp this case was a first for the afp we never undertaken a joint investigation with asic before and not one of this magnitude [Music] there was a sense of urgency for the investigation because it involved a possible corrupt commonwealth official so that's a high priority for the afp [Music] by november 2013 lucas's trading just got totally out of control by january his profits had climbed above 270 000 and then by february just the month after they're at 1.96 million dollars and the key thing is that he wasn't telling chris about it so chris still thought they were continuing along with this very methodical plan of gradually making 200 000 in profits whereas lucas had gone totally off the reservation by this point [Music] the afp really brought a sort of organized crime focus to this investigation so they had bugs installed in lucas's car they had bugs in his house [Music] we obviously suspected chris was passing on information but we had no evidence to substantiate it both chris and lucas were being very disciplined they weren't contacting each other on their regular phones they weren't meeting up in person so as time went on we started to doubt ourselves and then they just reached a point where you went is he just lucky it was quite frustrating um to be honest in terms of not being able to you know really hone in on on how that information sharing was occurring [Music] on the 13th of march 2014 at 11 10 a.m police surveillance cameras within the nab office captured lucas taking his desk phone off the hook he left his workstation and the cameras picked him up heading to the men's toilet over the next 25 minutes from a toilet cubicle at nab lucas would make a giant trade that would essentially allow him to turn about one million dollars into 2.5 million dollars that massive trade that lucas made pushed his profits his secret profits above six million dollars that was 30 times more than he'd agreed to with chris [Music] i'm a huge fan of the tv show the block and i remember one of the criminal investigators informed me that lucas comey had been showing interest in purchasing one of the apartments what about the super case wow wow and then you girls sit down and you're gonna take the lead so we held an eye at the block in our apartment for all of the people that were interested in buying it and lucas i guess stood out to us because he was very young i remember thinking oh daddy and mommy you're buying you're an apartment you're not old enough to buy yourself a like a multi-million dollar apartment yeah he struck me as this young person that i guess wanted his five minutes of fame at one two i've got up i took it from this general take two or two million fifty now so on the night of the auction he ended up bidding the highest which was two point three seven five million dollars it is sold thank you very much when i was watching uh the block that night it was a little bit surreal yeah it did appear that lucas was taunting law enforcement he was very confident that he wasn't going to get caught for an organisation that goes after mafia bosses and drug kingpins and things like that it was a huge sort of deflating moment i think that they they couldn't catch a couple of private school boys who are complete amateurs [Music] finally when they thought all was lost really that they were never going to catch these guys they caught a break in the investigation [Music] it was the anzac day long weekend in 2014 and chris had come down from canberra to melbourne [Music] he planned to meet up with lucas but the big problem was that he'd forgotten his burner phone so he had to contact lucas uh on his regular phone and that really was the first time that the afp had actual recorded communication between chris and lucas i was giving you drips and drabs you know five grand five grand 10 grand and i'll just load you all the way out i was highly surprised that that contact had occurred you know it it was the beginning of the end [Music] [Applause] [Music] on that weekend lucas picks chris up from his mate's place that he's staying at while sitting in the car lucas provides christopher with six and a half thousand dollars and they sit there and have a conversation around what they have been up to and what they plan to do for the next couple of months no one knows i'm doing this i haven't told anyone at work not even my girlfriend knows about it not even my brother knows about it the conversation was actually quite amazing and i just couldn't believe that you know we'd actually got that golden nugget that you'd always kind of hope for in an investigation when you buy an investment property it was quite exciting because it was the first contact that we had between the two it's not like it's drug money everything that we'd suspected but couldn't prove was now starting to to come our way and be mindful i have the money in my bank account i can earn interest on it so i'm going to give you more than 50 have you kept it like that as well you spend the money and your friends are like what the is all this money no i kept it in my room what cash might want when i go out that's it you know i was excited to say the least it was a game changer it was a pivotal point in them in the investigation [Music] the 9th of may 2014 authorities finally got the chance to go and kick in some doors with dawn raids in both canberra and melbourne [Music] i started searching through lucas's drawers it just struck me that everything was so neat i looked up and saw that there was a window open above lucas's bed and the sergeant who was in the in the room with me he jumped on the bed and stuck his head out the window and i said there's a phone down on the ground down here sitting there is the crucial piece of evidence they're looking for the burner phone lucas had heard the knock on the door and that he'd thrown the phone out the window problem was it wasn't a very good throw and it didn't go very far [Music] i do remember seeing lucas when i entered the premises i stood out in my memory because he seemed very calm like almost unconcerned wasn't upset wasn't showing to me any signs of distress most people just realized uh are being caught i'm in trouble and they fall to pieces but he kept it together it was then my job to go in and tell lucas that we've restrained all his bank accounts and then also two properties which he owned and a bmw motor vehicle it's the first time we've actually just seen him drop his head and show some type of you know concern or realization that reality reality's hit and that we've taken that away from you well that's where it hits the hardest the betrayal of lucas to his friend chris was quite extraordinary whose idea was it we expected to see an equal profit sharing arrangement but it was during the record of interview that chris found out about the seven million dollars i don't think he actually believed us yeah i just thought they were trying to trick me i had no idea that he had opened another account and had also traded in that other account for himself when i found out just how much money had been made then you know yeah initially i was pretty pissed off because it just seemed so obvious to me that it was such a stupid amount of money that there's no way it wouldn't have gone unprotected my barrister he just said flat out we'll definitely be going to prison it's a pretty full-on moment at the end of 2014 in the victorian supreme court both lucas and chris ended up pleading guilty to insider trading lucas took the stand which was very unusual for someone pleading guilty and he essentially blamed it on chris when it came to the question about how this all began lucas said that chris had approached him the judge was very scathing and ultimately she came down on the determination that it was lucas who came up with the scam the dpp is right to describe your conduct mr camey as the worst instance of insider trading to have come before the courts in this country lucas was sentenced to seven years and three months jail with a non-parole period of four years and six months now that was the longest sentence for insider trading in australian history when it came to chris he got a lesser sentence christopher russell hill your total effective sentence is three years and three months imprisonment remove the prisoners please family and friends i think they were obviously a bit shocked at the length you know i think i was probably the only one who'd really kind of already accepted it his dad let out this gut rule cry really for his parents who were just very good people you never wanted to see them like that really it was really hard i'm a professor at the university of sydney business school and my research is focused on white-collar crime and corporate governance when i first met chris it was really in the context of an interview where we were getting him to reflect on the sorts of justifications and rationalizations that he was thinking through during his offending the thing that struck me most about him was that he owned what he had done [Music] it's hard to explain why chris got involved the amount in the scheme of things wasn't going to be life-changing and the risks were substantial the consequences were extreme i knew in the back of my mind that it's something i shouldn't be doing but then i guess i kind of convinced myself that there was really no victim it wasn't you know it wasn't coming directly out of someone's pocket or wallet or house insider trading is definitely not a victimless crime when you've got someone who is winning and making significant gains there's always going to be someone that's on the losing side to that and typically in these cases it's going to be a global spanning bank or financial institution that backs the foreign exchange market i mean they're owned by shareholders including your average mum and dad investor via their superannuation are you or were you sort of ashamed of what you did um i i'm not going to say that i'm ashamed of what i did i guess i'm disappointed uh to some extent i definitely take full responsibility for um you know for everything i've done and i think that's why um you know a lot of people found it so hard to adm to accept why i was um you know not so angry at lucas i was a willing participant and and a willing participant over and over and over again [Music] after two years in prison chris was released from beechworth and he talks about it as quite an emotional time really my parents were waiting to pick me up and yeah that was you know just such a good car ride home i started applying for jobs and i probably went through about 20 or 30 applications but i just didn't hear back from a single one yeah that was pretty hard because i'd gone from you know i've come out this is great back to kind of and now i can't get work lucas got out of prison in 2019 after serving four and a half years of his sentence i spoke to a number of lucas's friends during the podcast i think he's a fascinating character i don't think he's the sort of bogeyman that he's betrayed in some senses i think there's a lot of you know good in lucas as well he made a really terrible mistake very early in his life and i think that um you know he's paid a really huge price for that i've heard that he'd done an mba while he was inside and that he had become an advocate for prisoners rights and helped people make good decisions when faced with lucrative temptations towards the end of the podcast i got a call from joel the guy that was the compliance officer at pepperstone who ultimately tipped off the police and he wanted to meet up with chris and he felt quite affected by chris's story if i can do something that benefits other people who may be in the same sort of position as i was in if we can make them think twice about what they're about to do i started to get a bit of a tinge of guilt because my involvement might have added some prison time to both their sentences and that sort of really weighed on me i really just wanted to have a beer with chris and and see things from the other side of the fence yeah joel and i met up in melbourne earlier this year and he mentioned that he had a couple of of positions and asked if i would be interested i know that when he got his his job he was over the moon just to be working again that's it's sort of a way that you feel like a member of society [Music] i'm really enjoying the position really enjoying the people the the new challenges and yeah i'm just you know thankful for the opportunity um and uh yeah looking forward to what's coming next christopher is a risk analyst so if there was any insider trading he's probably going to be the one that would uncover it the job that he's in is ironic but he's definitely learned his lesson and he doesn't want to go back and repeat the early 20s of his life again i think he just wants to move forward uh work hard build his career and build his life yes i do i do trust christopher hill completely [Music] [Music] [Music] you

Channel: ABC News In-depth

Views: 328,562

Keywords: abc news, australian news, abc news indepth, documentaries, long-form journalism, Australian Story, what is insider trading, insider trading, sure thing podcast, Christopher hill, Lukas Kamay, NAB, Australian Bureau of Statistics, why is insider trading illegal, corporate insiders, stock market, ABS, Australian Dollar

Id: RE3ZHd8jx58

Length: 31min 35sec (1895 seconds)

Published: Mon Sep 27 2021