Leak of faith
ASIC says Australia’s public markets are among the cleanest in the developed world. But a number of recent questionable incidents including market-moving leaks call that into question.
Institutional investors often describe the ASX as a Wild West type environment, as we’ve noted before. That description usually refers to the micro end of the market, but an incident involving an ASX 200 constituent and prominent investment bank that resurfaced this week fits the moniker perfectly.
As Capital Brief reported, Patrick Farrugia, the little-known property developer behind a failed approach for Star Entertainment has accused the casino operator and Barrenjoey of leaking a confidential proposal he had put to the company in good faith, ultimately sabotaging it.
The leak, which suggested US entertainment conglomerate Hard Rock was preparing a bid for the company’s Sydney casino, was not initially denied by Star and triggered a 20% spike in its share price. Within 24 hours, Hard Rock had denied any involvement. While the credibility of Farrugia’s deal has been called into question, the leaking of incomplete details has still raised more than a few eyebrows.
There have been other questionable incidents on the exchange this year. A report that Citi capital markets operatives were “wall-crossing” investors into a capital raise for Novonix that landed during trading hours led to a sharp fall in the battery technology company’s share price.
