back to article ONE EMAIL costs mining company $300 MEEELION

In January 2013, a chap called Jonathan Moylan sent a single email that caused an AU$314m - £174m or $295m - dip in a coal company's value. The email was a fake press release stating that Whitehaven Coal's bank, ANZ, had decided not to lend the mining firm the billion or so dollars needed to open a new pit. Moylan's message was …

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Ball Ox

Justice Davies of the New South Wales Supreme Court rated Moylan's actions as mischievous, rather than malicious.

My 8-year old is mischievous.

This guy's a 26-year old man who knew what effect his actions would have.

Good to know the Aussie legal system is as braindead as its UK cousin.

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Re: Ball Ox

Whatever you think of his actions, he didn't get off lightly. He was convicted of the charge they found to throw at him and was sentenced to prison (suspended) and fined. The judges comments were on the sentence, not the conviction.

P.S. I didn't downvote you, so here's an upvote to balance it

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Anonymous Coward

Re: Ball Ox

It is just as well that this didn't take place in the US. All manner of charges including Interstate Wire Fraud, Securities Fraud etc would have been thrown at the perp. I would have expect 15-25 years in jail for this crime if it have been done in the USofA.

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Re: Ball Ox

Good thing he didn't guess some politicians email password.

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Re: Ball Ox

It may have been reasonable for Moylan to assume that his hoax would be quickly uncovered (within an hour) and that at best the hoax would have rated an item on the evening news.

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Re: Ball Ox

Matthew, that might have been true, had he not knowingly lied about it being a hoax to anyone who called him on the number he provided:

"That number was Moylan's own, so when journalists called to confirm the details of the fake press release, Moylan simply told them it was all kosher."

Kosher = legit = true.

So he deserves a punishment. To be fair, if he is of limited (aka average) means, then a suspended sentence and a four figure fine is probably about right. But he certainly didn't let people just believe what he put in the email off his own back - he confirmed it as the truth pretending to be a representative of the companies involved, which is direct fraud when you take the very, very obvious stock market changes into consideration.

If he does it again, though - he wants jail time.

Steven R

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Re: Ball Ox

"Whatever you think of his actions, he didn't get off lightly."

Lightly is EXACTLY how he got off!

A slap on the wrist and told "Now don't do it again" is what he got.

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Re: Ball Ox

The real problem is that giving him a slap on the wrist, the next self appointed wildlife warrior will do the same and expect the same.

The only good thing about it is hopefully the stupid media might bother to check their facts first from now on.....

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Re: Ball Ox

"The only good thing about it is hopefully the stupid media might bother to check their facts first from now on."

The media will probably just check against Wikipedia, which is easy enough to manipulate

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Headmaster

Re: Ball Ox

He only *knew* what the effect of his actions would be if he *knew* that the press would swallow it hook, line, and sinker, rather than actually do their jobs and verify before publishing, and that investors would accept whatever they published as gospel rather than doing any checking into it themselves.

Granted that's a pretty safe bet these days, especially the press part.

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Devil

@ unitron -- Re: Ball Ox

Granted that's a pretty safe bet these days, especially the press investors part.

FTFY

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Re: Ball Ox

Unitron - that's simply too much obfuscating stupidity to claim at trial.

If you're clever enough to spoof a press release, and maintain the ruse when queried on it, you're clever enough to know the potential adverse side effects of said ruse.

To claim otherwise is simply naive, and offensive to anyone with an IQ over 75. Which is likely why he was advised to plead guilty - so as not allow the opportunity to utterly destroy that claim in open court.

Steven R

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Headline wrong?

It didn't cost the mining company much at all, as it wasn't trying to sell itself at the time.

It may have cost some others something though, as is mentioned in the story.

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Re: Headline wrong?

Exactly. It cost some pension funds and small investors $300 million (because hey guess who is gonna hold the bag in the end on "trader's" losses).

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Re: Headline wrong?

Those investors and speculators were happy enough investing in a high-risk company, in a high-risk market sector, in a type of business that will be deservedly history before too many more years go past. The very fact that they were spooked by a trivially simple little trick shows just how close to the edge that business is. By all means feel sympathetic to them if you wish, but don't overdo it: they went into a high-risk investment of their own free will, and the fact that they were willing to invest in one of the most harmful industries of all demonstrates that they (the investors & speculators) had no concern or care for other people - so why should we care too much about them?

The hoaxer was in one sense very lucky to get off with such a modest penalty - the maximum penalties for stock market manipulation are very serious. On the other hand, in this country fair-dinkum shysters in flash suits and plush offices who get caught defrauding multiple millions for no better reason than greed generally get let off with token penalties, if they even get prosecuted at all, so in another sense this bloke can think himself a bit hard done by. Unlike most stock market frauds, he at least meant well.

Last point: what the hell is a pension fund doing putting money into a dodgy high-risk investment like this anyway? If that was my pension money these turkeys were managing, I'd be screaming mad at them.

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Re: Headline wrong?

"Those investors and speculators were happy enough investing in a high-risk company, in a high-risk market sector, in a type of business that will be deservedly history before too many more years go past. The very fact that they were spooked by a trivially simple little trick shows just how close to the edge that business is. By all means feel sympathetic to them if you wish, but don't overdo it: they went into a high-risk investment of their own free will, and the fact that they were willing to invest in one of the most harmful industries of all demonstrates that they (the investors & speculators) had no concern or care for other people - so why should we care too much about them?"

Let's go line by line, and go through the bullshit.

"Those investors and speculators were happy enough investing in a high-risk company, in a high-risk market sector"

It's only high risk because someone fraudulently attempted to manipulate its stock price. In this case, every company is high risk: send a press release saying you are calling in a business's loans and see what happens. It's fraud, he deserves the book thrown at him.

" in a type of business that will be deservedly history before too many more years go past."

Better not buy another computer. Where do you think metal comes from?

"The very fact that they were spooked by a trivially simple little trick shows just how close to the edge that business is."

As I said above, mock up a press release saying the SEC is investigating the directors of company X for fraud or X's banks are calling in their loans and watch what happens.

"By all means feel sympathetic to them if you wish, but don't overdo it: they went into a high-risk investment of their own free will, and the fact that they were willing to invest in one of the most harmful industries of all demonstrates that they (the investors & speculators) had no concern or care for other people - so why should we care too much about them?"

I hope all your savings were in the investment fund that got hosed by this.

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Re: Headline wrong?

On the other hand, in this country fair-dinkum shysters in flash suits and plush offices who get caught defrauding multiple millions for no better reason than greed generally get let off with token penalties, if they even get prosecuted at all, so in another sense this bloke can think himself a bit hard done by.

When will people stop using the bankers as an example by which they excuse their own wrongdoing?

Comparing one arsehole's behaviour to another arsehole's bahaviour does not compute.

Unlike most stock market frauds, he at least meant well.

Did he mean well? His action seems fairly malicious to me...

Oh, you mean it was ok for him to target a coal mine because of his environmental beliefs?

I wonder if he knows that 70% of Australian electricity comes from coal fired power stations?

Perhaps he could make a real statement by going to live in a cave with some candles.

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Re: Headline wrong?

However it MADE other pension funds and investors $300 million.

The market is a zero sum game - one idiots losses are another idiots gains

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Re: Headline wrong?

Ross K asked:

" Oh, you mean it was ok for him to target a coal mine because of his environmental beliefs?"

Excellent question.

His actions were a crime regardless of who he targeted or why.

Would everyone's position on this be the same if the target was a risky green energy company? Or perhaps a firm making life saving medical equipment?

Remember that a precedent may well have been set by this court. Your cause may be next...

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Re: Headline wrong?

DavCrav, the point here is that the fake press release made sense to investors, which is why they panic-sold, and the reason it made sense is that the coal industry in the 21st Century is living on the edge of doom. Everybody knows (or should know) it won't go on much longer - not as a growth industry with huge profits - and everyone knows that it is starting to run into significant difficulties raising finance. In the main this isn't because of ethical investors going elsewhere (though that is a factor as well, of course), it is because of the high business risk. Just today, as an example, the Australian business newspapers are reporting that the Carmichael project in the Galilee Basin - planned to be the biggest coal mine in Australia, the world's biggest coal exporter - is in doubt because of difficulties raising the finance. (That's not me saying that, it's KPMG.) Coal is no longer a safe, boring investment. There *might* be money to be made in new ventures still, but with slowing worldwide demand growth and lower market prices plus competition from both gas and the renewables sector, plus the inevitability of carbon price increases, coal shares are high-risk and not something the ordinary investor or pension fund should be considering.

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Re: Headline wrong?

One email does not cost squat. What sent the share price tumbling was the 'buy...buy..sell..sell' speculators who act on rumour and half truths, and the automatic share dealing system who all jumped on a small dip and kept on pushing it down and down.

The share dip was temporary anyway so the only actual losses where by those who play with short term rises and dips in the market. Long term investors lost squat.

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Re: Headline wrong?

the coal industry in the 21st Century is living on the edge of doom. Everybody knows (or should know) it won't go on much longer - not as a growth industry

@Tannin:

You conveniently ignored my post about Australia's dependence on coal for electricity generation.

There is no other option - as long as Australia needs electricity, it will also need coal unless it embraces nuclear power.

You sound like you're in denial.

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Re: Headline wrong?

>There is no other option - as long as Australia needs electricity, it will also need coal unless it embraces nuclear power.

In 50 years at most it will have to. Nuclear has a bad name right now but give it a decade of drought pretty much anywhere and nuclear starts not looking that bad. Coal's days as a major energy source are numbered.

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Re: Headline wrong?

In 50 years at most it will have to. Nuclear has a bad name right now but give it a decade of drought pretty much anywhere and nuclear starts not looking that bad. Coal's days as a major energy source are numbered.

<joke>They could take a leaf from America's book and invade a coal-producing country like Poland?,</joke>

The problem with nuclear is that the Aussies won't want to deal with the spent fuel.

You think they're uptight about coalmines? Wait til they need to dig a nuclear waste repository...

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Re: Headline wrong?

If only there was somewhere in Australia with very few people, some of the oldest most geological stable rocks in the world, bugger all groundwater - and a local high tech mining industry.

Failing that they could always just dump it in Tasmania - nobody would notice, Or in Canberra - nobody would care

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Re: Headline wrong?

"what the hell is a pension fund doing putting money into a dodgy high-risk investment like this anyway"

Err... mining? That's one of the stolidest of solid investments.

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Re: Headline wrong?

The market is a zero sum game - one idiots losses are another idiots gains

Let me guess, everything you know about the stock market you learned from the movie Trading Places with Dan Aykroyd and Eddie Murphy and now you're confused about between the difference between the stock market and the futures market.

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Stop

Re: Headline wrong?

No it's high risk because they are gambling on stock price fluctuations, rather than investing in the company and looking for a dividend return based on the company's profits. Company profits are unaffected by the event.

If the pension fund was gambling, that's no better either. Anyone who knows the company, and is investing in the company will know what they are doing and could hold their nerve. Those investing in stock as a commodity would have been burnt.

Don't gamble. Certainly don't gamble with other people's money. That's what causes big bubbles and big losses.

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Re: Headline wrong?

Did they 'lose' A$300M though?

To put it another way, what's the share price today?

The article has it part right, day traders would have taken a bath, but fuck em. parasites

pensions, I would say not so much.

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Re: deal with the spent fuel....

Why on earth not? they have fuckin tons of empty space to dig a hole in, not like France for eg

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Re: deal with the spent fuel....

Why on earth not? they have fuckin tons of empty space to dig a hole in, not like France for eg

@Naughtyhorse.

Yeah, that's all there is to it. Dig a hole in some empty space. Why didn't I think of that?

Pangea Resources (aka BNFL) was lobbying to dig a hole in some empty space back in the late 90s. There was so much backlash that two new Acts were passed prohibiting the storage of nuclear waste.

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Anonymous Coward

Re: Headline wrong?

"When will people stop using the bankers as an example by which they excuse their own wrongdoing?"

When they're punished? It's called "justice" and it means that everyone is treated equally by the law. Bankers are still stealing and defrauding and being allowed to get away with it. The very next day after being caught in the Libor mess, Barclays set up the Dark Pool specifically to feed lies to their customers. Because they weren't really punished over Libor.

Until they're stopped there is no moral basis for punishing other people for doing the same thing. That's just the way it is.

As to this particular story: some money moved from some gamblers' accounts to other gamblers' accounts. No money was actually lost, especially by the company who didn't own the shares!

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Re: Headline wrong?

@Robert Long. So much fail in just one post... It's almost impossible to comprehend how someone can say so much and yet know so little...

"The very next day after being caught in the Libor mess, Barclays set up the Dark Pool specifically to feed lies to their customers. Because they weren't really punished over Libor."

From this we can deduce you a) don't understand libor, b) don't know anything about Barclays, c) don't know anything about dark pools generically or Barclays dark pool specifically.

"No money was actually lost, especially by the company who didn't own the shares!"

And we can no also deduce that d) you don't understand finance at all.

How much a company is charged for borrowing money through a variety of sources and systems is a direct function of its share performance.

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Re: Headline wrong?

Until they're stopped there is no moral basis for punishing other people for doing the same thing. That's just the way it is.

@Robert Long 1:

God you're naive if you think that's how it works. Morality and legality are not the same thing

I think I'll steal some food from Sainsburys on the way home this evening. When the cops come I'll tell them to fuck off and arrest some bankers.

That's the level the people who complain about "THE BANKERS 0MG!!!" are at. Not a clue what they're actually complaining about...

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Anonymous Coward

Re: Headline wrong?

How much a company is charged for borrowing money through a variety of sources and systems is a direct function of its share performance.

What has that to do with anything?

You have a very narrow view of money if you think that means money was "lost". I suspect you may have a degree in economics or something. You sound like the sort of numpty the LSE gives degrees to, at least.

"The very next day after being caught in the Libor mess, Barclays set up the Dark Pool specifically to feed lies to their customers. Because they weren't really punished over Libor."

From this we can deduce you a) don't understand libor, b) don't know anything about Barclays, c) don't know anything about dark pools generically or Barclays dark pool specifically

And that d), you don't actually have anything to say on the subject aside from posturing.

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Re: Headline wrong?

Of course the headlines wrong. That's the whole point isn't it?

>It may have cost some others something though, as is mentioned in the story.

Or, it "may" have cost them nothing,

or they "may" have made an extra profit from the attention the stock is getting.

If the prosecution had any actual evidence, they wouldn't be resorting to weasel words like that.

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Anonymous Coward

Re: Headline wrong?

@Ross K "God you're naive if you think that's how it works."

My point is that is not how it works but it is how they tell us it works, but when they are the ones breaking the law suddenly it works differently.

"That's the level the people who complain about "THE BANKERS 0MG!!!" are at. Not a clue what they're actually complaining about..."

Basically, what you're saying is that the rich should be allowed to get away with anything and you're happy to pay for it from your own pocket. Good for you; you can pay my share too, thanks.

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Re: Headline wrong?

Basically, what you're saying is that the rich should be allowed to get away with anything and you're happy to pay for it from your own pocket. Good for you; you can pay my share too, thanks.

No you idiot. I'm saying people shouldn't use The Bankers™ as an excuse for every fucking misdeed. Sorry you have reading difficulties.

You can't justify making a company's share price bomb by saying "Oh well, The Bankers™ made XYZ Ltd's share price bomb too."

You can't justify stealing food from Sainsburys by saying "Oh well The Bankers™ stole food from XYZ too."

You can't justify driving past a school at 100mph by saying "Oh well The Bankers™ drove everywhere at 100mph too."

Do you see where I'm going with this yet, or would you like a few more examples?

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Anonymous Coward

What losses?

Anyone who panicked without verification is too stupid to be an investor.

The share price recovered very quickly.

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Meh

Re: What losses?

Here are three examples of where investors may have lost out without making a conscious decision:

* Investors operating with a margin trading account may have been forced to sell by their bank if certain thresholds were reached.

* Investors using stop-losses to manage their risk (especially with options trading)

* Funds with rules covering the composition of their portfolio.

However, the point is very valid. The shares opened at $3.55, plunged from $3.52 to $3.21 shortly after noon, but recovered to $3.53 so it is likely that only those investors with stop-losses would have been impacted and options trading has a higher risk associated with it.

What the above reasons do highlight is the risks inherent in the market can accelerate movements in share prices, especially with automated trading.

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Re: What losses?

Very good ! ! !

People who are in the market but are also stupid enough to have silly procedures, should loose money.

It's Darwin.

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Re: What losses?

"People who are in the market but are also stupid enough to have silly procedures, should loose money."

What about people who are too stupid to be able to spell 'lose'? Should they loose money?

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Re: What losses?

Naah, you don't lose money for bed spalling.

And if they lost it, it was pretty loose.

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Re: What losses?

"What about people who are too stupid to be able to spell 'lose'? Should they loose money?"

Its Derwin.

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Re: What losses?

Its Derwin.

Yeah, I'm sure he would of approved...

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Losses

The only people who lost will be those who sold while the price was depressed. Anyone who bought while cheap made money. Anyone who didn't trade while the price was adrift didn't make or lose anything regardles of their position.

If it was accepted that his motivation was not market manipulation then really this was not the right conviction. Libel perhaps, but not market manipulation. It is a dangerous precedent since it could be uaed to prosecute protesters who successfully impact a corporation through their legitimate protests.

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Re: Losses

"The only people who lost will be those who sold while the price was depressed."

OK, so it probably wasn't $300m. Let's say $50m. Is that any better? Can the people who lost money sue him personally for it? They can, but they cannot get much. He should be in jail.

"If it was accepted that his motivation was not market manipulation then really this was not the right conviction. Libel perhaps, but not market manipulation. It is a dangerous precedent since it could be uaed to prosecute protesters who successfully impact a corporation through their legitimate protests."

As long as the legitimate protest doesn't involving mocking up fraudulent press releases with lies about the business's health on it, they should be fine.

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Re: Losses

Exactly.

To quote my favourite author on the subject, Fred Schwed Jr., remember that each one of those shares that was sold at a low price found a buyer.

This little story has actually exposed the mania inherent in short term trading. People do it because they think it gives them an advantage over suckers who just buy shares and keep them. I am sure on the same day there were people who sold shares on a hunch that promptly went up, people who bought shares on an algorithm that promptly went down and were then sold in a hurry on the same algorithm. The mouth-foaming going on here is probably from people who really detest anything that shows that the financial gods are really just gamblers trying to game the system.

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Anonymous Coward

Re: Losses

"If it was accepted that his motivation was not market manipulation then really this was not the right conviction. Libel perhaps, but not market manipulation. "

His actions did manipulate the market, so I'd say that conviction is valid. Intent is a mitigating factor; it has nothing to do with whether you actually committed the crime.

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Re: Losses

If the people who lost sue him for their losses, can the people who benefited be sued by him for their gains?

I concede happily that what he did was criminal. I also happen to think that the judge got it right. People should not be allowed to sue other people because of their own negligence and stupidity.

The people who sold quick or sold short did so because they thought they had asymmetrical information, and they were in such a hurry to act that they didn't stop to check. They were trying to get an edge by acting before anybody else noticed. So, I agree that he should have been convicted, but I do not agree that he should be sued by people who lost out because of their own trigger happy behaviour.

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