AUSTRAC report reveals extend of organised crime threat to financial industries

By Addie Thomes

Cyber fraud, money laundering and insider trading are the three biggest threats posed by organised crime gangs to the Australian financial system, a new study has shown.

Australia's first risk assessment of the securities and derivatives sector has revealed how serious and organised criminals can, and have, exploited the country’s financial system to engage in criminal activity.

Minister for Justice Michael Keenan today released AUSTRAC's Securities & derivatives sector: money laundering and terrorism financing risk assessment, report in Sydney − the financial hub of Australia. 

Keenan said financial markets are integral to Australia's economy. It has the second most active stock market in the Asia-Pacific region, with more than 6.7 million Australians owning shares, and 929,000 trades taking place per day on the ASX worth $4.7 billion.


"But we know criminal gangs will seek to exploit any weaknesses in our financial systems, putting our economy, national security, and international reputation at risk," Keenan warned.

"This report sends a clear message to Australia's financial sector: no individual or company is immune from the threat of serious and organised crime, but they can mitigate it."

Fraud, including cyber-enabled fraud, was by far the highest reported threat to the sector (51 percent), with a significant number of customer email accounts and trading accounts being hacked and, in some cases, money stolen.

Money laundering and insider trading and market manipulation were equally the second highest areas of suspected criminal activity in the sector (21 percent), while Tax evasion (two percent) and terrorism financing (one percent) were the least reported threats to the sector.

Minister Keenan said the Coalition Government, and law enforcement and intelligence agencies, are committed to working with the financial sector to harden their domestic and international operations to undermine the business models of crooks and remove the profits from their crimes.

"Importantly, our efforts are paying dividends. Already this year, AUSTRAC and their partner agencies have detected and disrupted an international criminal syndicate that laundered more than $29 million in proceeds of crime in Australia," Keenen said.

"The AFP and ASIC, working together through the AFP-led Fraud and Anti-Corruption Centre, also disrupted Australia's largest insider trading scheme totalling $7 million.

"I encourage Australia's financial sector to heed the findings of this report and work with AUSTRAC to understand both the risks of criminal exploitation, and their reporting obligations."

Australia's securities & derivatives sector: money laundering and terrorism financing risk assessment can be viewed on the AUSTRAC website.


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