‘Million-dollar fines for market rorters’, bellows out the headline in The Australian today. The politicians had been asked to do something and they have. They now can point proudly to the pot and say, ‘look what I’ve done, Mum!’. One million dollar fines, almost a house. That’s a lot of money isn’t it?

No

To make 1 millions dollars, you would only have to manipulate approximately 2.857 million BHP shares by 1%. The share price at the moment is around $35. That means a price shift of 35 cents. It does that when the main players are out to lunch.

There are approximately 12.5 million BHP shares traded on the ASX every day.

As of the 31 October 2007, BHP Billiton Plc's issued capital, including treasury shares held by BHP Billiton Plc, consisted of 2,281,159,062 Ordinary shares. So you only need control of less than 1% of the BHP shares to make a joke of a 1 million dollar fine.

If you combine a strategy of the physical (ordinary shares), futures and options then making 1% is a doddle.

You can do that without colluding with anyone except your mates in the institution.

If you collude with your mates in other institutions is is breathtakingly simple.

Watch the market around options expiry time and at the end of the month if you want to see how it is done.

The market should be regulated, certainly.

The question is how.

We live in a society where the presumption of innocence is one of the cornerstones of our legal system, as it should be. The article did not provide one important piece of information, whether the fine applied to a civil or a criminal breach. Actually, it is a regulation of the ASX, so it will have all the effect of hitting an elephant with a wet tissue. Just don’t do it from behind, plop, plop, plop.

http://www.theaustralian.news.com.au/story/0,25197,23436769-643,00.html

make the punishment the death penalty and you will see this practice cease

No true wish to punish exists, if it did the crime would not exist.
We have seen thousands of lives destroyed as money disappears and when some one goes to prison?
They come out still rich having served not much time at all.
Our thread starter has an active mind and this thread is one of many we should talk about but do not.
Yet the impending failures will impact on us all.

Belly - you try living with it. Then again, I suppose if you are reading my little rants, you are.

I believe that a person’s savings, whether in cash or property, represent their life, literally. A person usually has to work to earn money. That is, they exchange some of their life for that income. That time cannot be recovered.

Inherited wealth or obscene and immoral wealth such as that being garnered by those in charge of corporations is another matter.

If you accept my logic, then the loss of property is in effect the theft of life. It is a form of manslaughter; murder, if it was pre-meditated.

Q – what should the penalty for that be, I wonder?

DB I agree with every word believe me I live with it and understand it.
Few understand it few care unless they are hurt and while it impacts on us far more we here talk of animal welfare far more than our own?
We talk of God more than good ness we do not have answers for this problem, it is not going to change till it explodes but we find few who talk about it.

Dear DB,

Most people are basically honest. They are not there scoping for chances to cheat, is it circumstances that tempt them?

They "borrow" a pen from a conference, exaggerate the value of a television on a property loss statement, or falsely report the meal with a girlfriend as a business expense (she did ask how work was going). How prevalent is this kind of dishonesty, and what drives it?

People nudge the numbers on their tax returns because they know they can. We all push our luck a little.

Why then the ferocity of public outcry, and the demand from even those with no personal stake in a company's collapse that "justice" be done?

Is it because the Corporate Cheat is the transgressor of fair play, the violator of accepted norms,...while ladling from the community till?

And what sort of punishment should they get?

The punishment should fit the crime I suppose.

Let the courts decide.