stockmarket organised crime

  1. joh
    11 Posts.
    http://business.theage.com.au/probe-into-gatto-leak-on-takeover-plan/20080410-250m.html

    Probe into Gatto leak on takeover plan

    Nick McKenzie, Cameron Houston and Mark Hawthorne
    April 10, 2008

    Police are investigating the leaking of sensitive information about a planned company takeover to underworld identity Mick Gatto, amid increasing concerns about infiltration of the stockmarket by organised crime.

    Australian Federal Police are examining how information on a proposed takeover involving two WA-based companies, Golden West Resources and Fairstar Resources, may have been passed to Mr Gatto and his business partner in Elite Cranes, Matt Tomas.

    The inquiry is also examining a suspected deal to allocate a substantial parcel of shares from an escrow, or holding, account to the two Melbourne identities.

    The revelation of the police inquiry follows the $1 billion Opes Prime collapse and increasing calls for tougher scrutiny of the stockmarket.

    Fairstar, Golden West and several other stockmarket-listed mining companies, including Boss Energy, are embroiled in the Opes Prime collapse.

    Several of the shareholders of Boss Energy have also attracted the attention of law enforcement agencies: among its top 20 stock owners are a convicted drug trafficker and a Sydney bikie.

    In connection to the Golden West and Fairstar probe, a taskforce from the federal police economic and special operations unit is believed to have information, including tapped phone calls, that shows market-sensitive information was leaked.

    Police have been examining the activities of a Melbourne-based Fairstar Resources consultant, Nimrod Harell, in connection to the inquiry. Mr Harell has sat on the board of the Melbourne Knights soccer club with Mr Tomas.

    A federal police spokesman said he could not comment on its investigation as it was ongoing. Mr Gatto told The Age last night that the AFP investigation was baseless. "There is nothing there. They are wasting their time. They have interviewed everybody and come back with zero."

    Mr Gatto has been making headlines since 2004 when he shot dead Melbourne underworld hitman Andrew "Benji" Veniamin and was later acquitted of murder on the grounds of self-defence.

    This week, with Mr Tomas and another associate John Khoury, Mr Gatto flew to Singapore, where he says he is trying to recover losses for unidentified Opes Prime clients. Mr Gatto has denied any of his finances have been affected by the stockbroker's collapse.

    Golden West Resources chairman Con Markopoulos told The Age that federal police had removed files from the company. He said he had no knowledge of any illegal activities. "We have always given the AFP all access to information that they may require to do their job," Mr Markopoulos said.
    He said he knew Mr Tomas from previous business dealings.

    Fairstar director Harold Paiker also said he had no knowledge of any impropriety. "We are not privy to any information it (the AFP) has and upon which they have formed these lines of investigation," Mr Paiker said.

    In September last year, Fairstar launched its hostile takeover bid for Golden West. At the time Fairstar was valued at $36 million, and Golden West in excess of $120 million.

    But Fairstar managed to secure 3% of Golden West shares due to the large number of common shareholders - most of whom accepted Fairstar's 7-1 share offer. Before Fairstar's bid, there was an aborted plan for Golden West to take over Fairstar.

    In early February, federal police raided the offices of stockbroker Findlay Securities, which has had dealings with Golden West and Fairstar Resources. They also raided the homes of Findlay director Robin Armstrong and trader Jeremy Slater.

    Findlay Securities' Melbourne office is located next to the office of Tom Karas, a financial services provider closely linked to Mr Gatto and Mr Khoury.

    Among Mr Karas' other clients is alleged drug trafficker Horty Mokbel, the brother of crime boss Tony Mokbel.

    In July 2007, Mr Karas and Mr Khoury were listed as among the top 20 shareholders of Boss Energy. Others on that list included strip club manager Amad 'Jay' Malkoun, who served a lengthy sentence for heroin trafficking in the '80s and who is well connected to Melbourne's underworld.

    Another top 20 shareholder is Adrian Pamplin, a member of an outlaw motorcycle gang. Mr Pamplin was described in a 2005 NSW court case as a criminal figure with links to alleged former Sydney crime boss Karl Bonnette.

    Another company listed as a major initial shareholder in Boss Energy is Green Frog Nominees, which is a wholly-owned private subsidiary of Opes Prime.

    Boss Energy chairman Robert Grover said he was not aware that any crime figures were on his company's register or were among his company's top 20 shareholders.

    The federal police investigation comes four years after the Australian Crime Commission uncovered stockmarket dealings involving underworld figures and their associates.

    The ACC found evidence that underworld figures were leaked market-sensitive company information about a listed biotechnology stock. But the investigation broke down due to the inability of the Australian Securities and Investments Commission to access phone calls tapped by police agencies. Subsequent internal efforts at ASIC to investigate the dealings were blocked because of resourcing concerns.

    The ACC investigation charged Perth underworld figure John Kizon in 2004 with insider trading. He will appear before a WA court to defend the charges later this month.

    A well-placed source told The Age: "For ASIC to say organised crime is not involved in the stockmarket is just ridiculous. If ASIC can't conduct a criminal investigation and the police don't want to do it, then who is left?"

    Several police sources said the nation's law enforcement agencies had failed to target criminal stockmarket manipulation.

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