Australia's corporate regulator filed a federal court action yesterday accusing the local subsidiary of global investment giant Citigroup of insider trading.
The Australian Securities and Investments Commission (ASIC) filed a civil suit alleging Citigroup Global Markets Australia engaged in "unconscionable conduct" while it was advising logistics firm Toll Holdings Ltd in a A$5.5 billion (US$3.96 billion) takeover bid for ports operator Patrick Corp.
ASIC said Citigroup engaged in "substantial proprietary trading" -- trading for their own account or benefit -- in Patrick Corp shares on August 19, last year, the business day before Toll announced its hostile bid for the rival company.
Citigroup, one of the world's largest financial services conglomerates, strongly denied the charges and accused ASIC of trying to regulate the proprietary trading desks of major investment banks.
In its court submission, ASIC alleged Citigroup did not have adequate arrangements in place to avoid conflicts of interest between itself and Toll.
"ASIC alleges that Citigroup traded on inside information and directly against the interests of its client," ASIC Deputy Chairman Jeremy Cooper said.
The regulator demanded that Citigroup admit it violated conflict of interest and insider trading provisions of the Corporations Act and implement measures to prevent any future breaches of the law.
It also sought a restraining order preventing Citigroup from trading on its own account in shares linked to its clients and demanded it pay a fine of up to A$1 million.
Cooper called the suit a "significant case" concerning conflict of interest and insider trading in the securities industry.
"ASIC is saying that Citigroup fell down on both fronts in relation to its role as adviser to Toll," he said.
Citigroup responded that it was "disappointed" by ASIC's action.
"Citigroup does not believe ASIC has any basis of a claim and that this is an attempt to regulate the proprietary trading desks which are a feature of all major investment banks," it said in a statement. "Citigroup is denying all charges made by ASIC."
The case will be back before the Federal Court in Sydney on April 28.
Toll Holdings reaffirmed its confidence in Citigroup as its adviser and said the ASIC case would not impact on its takeover bid for Patrick, which is due to close on April 28.
Toll initially bid A$4.6 billion for Patrick on August 22 in a combined cash and scrip offer which amounted to A$6.70 for each Patrick share.
The Patrick shares had spiked in price the previous Friday when Citigroup was buying stock, rising from A$5.77 to A$6.45 per share.
Last week Toll lifted its bid to an equivalent of A$7.82 dollars per Patrick share.
Friday shares in both firms were down, with Toll falling A$0.14 or 1.06 percent to 13.10 and Patrick losing A$0.60 or 0.74 percent to A$8.06. The broader market was 0.29 percent higher.
Passengers on domestic flights would not be allowed to board if their temperature is more than 37.5°C or if they refuse to have their temperatures taken, Uni Air (立榮航空) and Mandarin Airlines (華信航空) said yesterday. The two airlines made the announcement after their parent companies — EVA Airways (長榮航空) and China Airlines (CAL, 中華航空) respectively — announced similar pre-boarding requirements on Saturday, along with a requirement that passengers wear masks during their flights, except when they have meals or drinks. Uni Air and Mandarin Airlines said domestic passengers would be required to wear masks from the time they start using self-help
CASE COUNT RISES: One of the new domestic cases is a nurse at a long-term care center, but so far tests on all the residents and other staff have been negative Flight transits through all Taiwanese airports would be banned for two weeks, starting tomorrow, the Central Epidemic Command Center (CECC) said yesterday as it announced 16 new confirmed cases of COVID-19, bringing the nation’s total to 169. Minister of Health and Welfare Chen Shih-chung (陳時中), head of the center, said all flight transits would be banned through April 7. In light of the rapidly increasing number of imported COVID-19 cases, there was a need to further reduce cross-border travel and the risk of disease transmission, the center said. The Civil Aeronautics Administration has informed airlines about the new measures, and anyone who has
A public health expert yesterday warned that too many people are meeting in small groups in coffee shops and restaurants without keeping a proper distance from one another, as he urged the government to loosen the criteria for testing young Taiwanese returning from abroad for COVID-19. People need to keep a social distance of at least 2m, National Taiwan University (NTU) College of Public Health dean Chan Chang-chuan (詹長權) said as the college presented its seventh weekly report on COVID-19 at a morning news conference. More than 300,000 confirmed cases of the virus have been reported in more than three-quarters of all
TWEET CONFIRMED: The US’ Morgan Ortagus backed up Taiwan, saying China only admitted that human-to-human transmission was possible as late as Jan. 20 Taiwan warned the WHO and China about possible human-to-human transmission of the new coronavirus at the end of last year, but the global health body did not make it public, the Ministry of Foreign Affairs said yesterday. Department of International Organizations Director-General Bob Chen (陳龍錦) made the remark at a news briefing in Taipei, when asked about statements made by US Department of State spokeswoman Morgan Ortagus. “Dec. 31— that’s the same day Taiwan first tried to warn WHO of human-human transmission. Chinese authorities meanwhile silenced doctors and refused to admit human-human transmission until Jan. 20, with catastrophic consequences,” Ortagus wrote on