• Lukas Kamay sentenced to more than 7 years' jail in March
  • Sentence warranted to highlight impact of offence, court says

A former National Australia Bank Ltd. trader, who was behind the nation’s biggest insider-trading case, has failed in his attempt to reduce his jail sentence.

The Supreme Court of Victoria’s Court of Appeals dismissed Lukas Kamay’s claim, saying the sentencing was warranted to showcase the damage to financial markets from such acts. Kamay, who profited from foreign-exchange trades based on economic data handed to him by a statistics department staffer, was jailed for seven years and three months in March. The sentence was the stiffest ever imposed in Australia for insider trading, the sentencing judge said in March.

The Supreme Court ruling on Friday said the maximum penalty for insider trading had been doubled in 2010 to 10 years’ jail to reflect the impact this type of offence could have on markets. Kamay and Christopher Hill, a former Australian Bureau of Statistics analyst, made more than A$7 million ($5 million) in profit, the ruling shows.

Kamay “flagrantly exploited Hill’s inside information, which was of high quality and market effect,” the court said in the ruling. The gains made “when compared with the relatively modest outlay, were exceptional.”

Hill took handwritten notes from labor force, new capital expenditure, retail trade and building-approvals data and sent the information to Kamay via mobile phone before its official release, according to court documents. The two met while studying economics and commerce at university.

The ABS, which compiles and distributes the nation’s key economic data including gross domestic product and inflation, said in March the case was unprecedented in its more than 100-year history. Kamay acted independently of National Australia and the trades didn’t relate to his work with the lender, the bank said at the time.

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