Investors and the media need to be more prudent when acting on reports or press releases that could represent hoaxes in an increasingly digital world, according to the corporate and markets regulator, the Australian Securities & Investments Commission.
In his first comments since last week's Whitehaven Coal hoax wiped $300 million from its market value in 20 minutes, ASIC chairman Greg Medcraft warned that investors should "take a sceptical approach" to supposed press releases, particularly when they did not conform to normal corporate behaviour.
"Is that a logical thing that the ANZ Bank would do?" he asked, in reference to the fake press release that claimed the bank had withdrawn a $1.2 billion loan facility from the coalminer.
He also said he expected media outlets to be "more circumspect" in the future in dealing with possible hoaxes.
Mr Medcraft said it would be better for the market if the media examined releases more carefully before reporting them, even if it meant a slight delay in their transmission, given the scale of financial disruption that such documents caused if they did get wide circulation.
The hoax fooled several media outlets, including The Australian Financial Review, which published a story on its website soon after receiving the release.
The Australian did not publish the original release, having noted that it was not sent to the ASX by either ANZ or Whitehaven Coal. ANZ said it was fake as soon as The Australian called to query the release.
ASIC is investigating the incident that saw Whitehaven shares plunge 8 per cent before going into a trading halt.
Retailer David Jones and mining services group Macmahon have also been the subject of takeover hoaxes in the past year.
Mr Medcraft said the Whitehaven ruse was "a function of modern technology". Speaking in Hong Kong, he said anti-coal protester Jonathan Moylan "appears to have set out to deceive: you can't legislate against that".
He said the slump in Whitehaven shares "may have involved margin borrowers", which is why "corrective action is absolutely critical".
"In these days of automated trading, this sort of thing is more worrying than ever," he said, although he admitted he had not had the opportunity to examine the trading records of the hour-long period when the market was trading uninformed on that day.
"I think we should be forward looking when we look at these issues," he said, while being careful not to jeopardise an ASIC investigation, which saw two ASIC officers driving five hours north from Sydney to interview Mr Moylan at his tented encampment at Maules Creek, where Whitehaven Coal is building a coalmine.
ASIC officers took possession of his mobile telephone and laptop for three days before returning them to him on Friday. Mr Moylan is understood to have agreed to appear for a formal interview with ASIC in Sydney this week.
Before joining ASIC as a commissioner, Mr Medcraft spent more than two decades working around the world for French bank Societe Generale, including as head of securitisation in New York.
Source:
http://www.theaustralian.com.au/business/markets/investors-media-get-hoax-warning/story-e6frg916-1226554648187
