Staff working for the Australian Bureau of Statistics will be banned from short-term trading in financial markets and required to provide annual declarations of their financial assets under a series of sweeping reforms recommended in the wake of one of the biggest insider trading cases in Australian history.
In May 26-year-old NAB employee Lukas Kamay and 24-year-old ABS worker Christopher Hill were arrested and charged over an alleged multimillion-dollar conspiracy to use advance knowledge of ABS releases to commit insider trading on foreign exchange markets.
A report prepared by former Australian Securities and Investments Commission deputy chair Belinda Gibson recommends the bureau consider banning short-term trading for all employees or at least those with market-sensitive information.
She found there was at present no requirement for ABS staff to declare their financial assets and no restriction on their trading, other than the obligation of all federal public servants to disclose potential conflicts and not misuse information for personal gain.
Her report says the ABS has at present only a limited ability to monitor its computer system to determine who has used it.
“The ABS information technology environment is aged in an infrastructure sense, and a composite of a number of data warehouses and work environments,” it says. “There are plans to modernise the various platforms, but these require significant new funding. The complexity of the system has probably discouraged directors from monitoring access regularly and challenging the access granted.''
The report recommends the bureau implement computer surveillance programs to monitor and retrospectively audit access to data.
It says since the ABS moved to an open-plan office environment some years ago it has has not had physical barriers such as password-protected doors protecting market sensitive data. Market sensitive data includes the consumer price index, labour force data and the national accounts.
Ms Gibson said every person she interviewed within the ABS spoke of its security culture, but usually in terms of the protecting of information entrusted to it by suppliers. The ABS had no specific ABS-wide training about the laws against insider trading.
“A number of people volunteered that the ABS perhaps takes the strong culture as a given, and that the events in May have come as a shock to the organisation’s belief in the strength of its culture,'' she wrote.
Acting Australian Statistician Jonathan Palmer, said the bureau backed the recommendations.