Macquarie Bank - Project TENNIS (TNT - KPN)

Alias
Purchase
Call Options
Purchase
Call Options
Purchase
Call Options
Employee
Witnessed By
Ficticious Identity
Simon Gautier HANNES
$10,000.00
Withdrawal
Transaction Date: 6/09/1996
CBA Chatswood
Simon Hannes
$10000
6th September 1996
$10,000.00
Withdrawal
Transaction Date: 6/09/1996
CBA Circular Quay
Si mon Hannes
$10000
6th September 1996
$20,000.00
Withdrawal
TransactionDate: 6/09/1996
CBA Pit t St & Martin Place
Simon Hannes
$20000
6th September 1996
Purchase Bank Cheque withCash
$9,000.00
Bank Cheque
TransactionDate: 9/09/1996
Westpac Annandale
Mark Booth
$9000
9th September 1996
Purchase Bank Cheque withCash
$9,000.00
Bank Cheque
Transaction Date: 9/09/1996
ANZ Bank Camperdown
Mark Booth
$9000
9th September 1996
Purchase Bank Cheque with Cash
$9,000.00
Bank Cheque
Transaction Date: 9/09/1996
ANZ Bank Leichhardt
Mark Booth
$9000
9th September 1996
Purchase Bank Cheque with Cash
$9,000.00
Bank Cheque
Transaction Date: 9/09/1996
CBA Camperdown
Mark Booth
$9000
9th September 1996
Purchase Bank Cheque withCash
$9,900.00
Bank Cheque
Transaction Date: 9/09/1996
CBA Leichhardt
Mark Booth
$9900
9th September 1996
Purchase Bank Cheque withCash
$9,000.00
Bank Cheque
Transaction Date: 9/09/1996
CBAGeorges Street
Mark Booth
$9000
9th September 1996
Purchase Bank Cheque with Cash
$9,000.00
Bank Cheque
Transaction Date: 9/09/1996
NAB Roseville
Mark Booth
$9000
9th September 1996
Purchase Bank Cheque withCash
$9,000.00
Bank Cheque
Transaction Date: 6/09/1996
CBA Martin Place
Mark Booth
$9000
6th September 1996
Purchase Bank Cheque with Cash
$9,000.00
Bank Cheque
Transaction Date: 9/09/1996
Westpac Roseville
Mark Booth
$9000
9th September 1996
$6,000.00
Withdrawal
TransactionDate: 9/09/1996
CBACrows Nest
Simon Hannes
$6000
9th September 1996
Purchase Call Options
$2.00 - Nov 1996
290 contracts at 2c on 19 September 1996
Ord Minnett Broker under Instructions
Purchase Call Options
$2.00 - Nov 1996
910 contracts at 1.5c on 19 September 1996
Ord Minnett Broker under Instructions
Purchase Call Options
$2.00 - Nov 1996
2,500 contracts at 1.5c on 18 September 1996
Ord Minnett Broker under Instructions
Perpetual Trustee Co Limited - Ord Minnett
Account No. B3133
Mark BOOTH
Cash Management Trust
Mid October 1996
Andrew STAEHLI received a signed let ter by fax
from Mark Booth with instructions directing t he
firm to pay monies under the direction of ASIC
18th September 1996
Written I nstruct ions Delivered
by Booth to Ord Minett Office
Documents Left on Broker's Desk
Boot h not met or seen by Staehli
Ord Minnett Broker
Andrew STAEHLI
Commonwealth Bank Australia
Si mon HANNES
Commonwealth Bank Australia
Wynyard branch
Simon HANNES
Bank Account
19th September 1996
Mark BOOTH contact s Andrew STAEHLI
and provides new phone contact 02-99028224
BOOTH advised t hat the requested options had been
purchased and $1, 500 remained in the account.
BOOTH annoyed that not all of the account was used
3rd October 1996
ASIC Suspicions Raised at Stock Exchange
Suspicions were immediately raised due to the significant
win f all made by Mark BOOTH. The Australian Securities
and Investments Commission (ASIC) initiate an investigation.
4th October 1996
ASIC obtain a Court Order - BOOTH Account Frozen
Australian Securities and Investments Commission (ASIC)
freezes the account of Mark BOOTH. Order f reezes the
proceeds but does not restrict the sale of the shares as
per BOOTH' s instructions. In November 1996 TNT shares
were sold for $2,039,710 in compliance with the instructions
of BOOTH however the f unds were held in the account.
Between 25th and 28th November 1996
$2 Million Transferred into BOOTH Account
Account Still Frozen by Court Order
The sale of share options resulted in a sum of
$2,039,710 which was transferred to Booth s
Cash Management Account
17th January 1997
Search Warrant Executed on HANNES Residence
and documents, his computer, an anorak, a black bag
and glasses were seized. The anorak and bag were
similar to ones in bank security tapes from when Booth
obtained bank cheques.
Board Meeting discussed
project Tennis concerning a
major restructure of TNT
5th September 1996
Mark BOOTH (Simon Hannes) rents a
Mailbox with "Mail Boxes Etc" situated
at Suite 140, 656 Military Rd Mosman
17th September 1996
Mark Booth Contacts "Ord Minnett"
and speaks wit h broker Andrew Staehli.
Requests TNT Call Options
19th September 1996
BOOTH opens a Voicemail Service
at Voicemail Internat ional 02-99028224
Paid in Cash
52 Railway Rd, Pet ersham NSW
Alexi Voltraint
31st October 1996
Andrew STAEHLI receives a Writ ten Letter
instructing to hold shares until 4/11/ 1996
in case a rival bidder made a higher offer,
then sell
Mr Murdoch
Junior Staff Member
Advised valuation of TNT
between $2.20 and $3.20
Attended Macquarie Offices
After Hours - On Leave
believed reviewing
Project TENNIS details
2nd September 1996
TNT disposes ofstake in New
Zealand Airlines to Ansett.
Project TENNIS indicated that
KPN were not interested in
New Zealand Airlines
Purchase Bank Cheque withCash
$9,000.00
Bank Cheque
Transaction Date: 9/09/1996
NAB Leichhardt
Mark Booth
$9000
9th September 1996
Simon HANNES
Mark BOOTH
In May 1996 TNT and their Macquarie advisors, from the Corporate Advisory Division of Macquarie
Corporate Finance (MCF), had a meeting in Hong Kong with Royal PTT Nederland NV (KPN), the
Dutch postal service, concerning a possible friendly takeover of TNT by KPN. In Sydney, the
Macquarie advisors put together what they called "Project Tennis", and those in the "Tennis"
Team were to keep the project confidential.
Simon Hannes was the Executive Director - Macquarie Corporate Finance. He was initially not privy
to the details of "Project Tennis". In July 1996 he became aware about the TNT - KPN details.
2nd October 1996
Andrew STAEHLI contacts Andrew BOOTH advising
he was a millionaire. The TNT opt ions were now wort h
roughly the difference bet ween the strike $2.00 and t he
bid $2. 45 A profit amount over $2 million.
Money Transfer
Transaction Date: 4/09/1996
Simon Hannes
$200, 000
4th September 1996
Postal & Telecoms
Netherlands
Transport & Logistics
Australia
2nd October 1996
Dutch Company KPN announced its takeover bid,
for $2.45 per share.
This was generally regarded as rather high at the
time. Some commentators suggested the Dutch had
miscalculated the exchange rate or something, but
the TNT business in Europe was highly desirable for
them and the bid had the backing of the TNT board.
A call option is an option contract in which the holder (buyer) has the right
(but not the obligation) to buy a specified quantity of a security at a specified
price (strike price) within a fixed period of time (until its expiration).
For the writer (seller) of a call option, it represents an obligation to sell the
underlying security at the strike price if the option is exercised. The call
option writer is paid a premium for taking on the risk associated with the
obligation.
Call buying is the simplest way of trading call options. Novice traders often
start off trading options by buying calls, not only because of its simplicity
but also due to the large Return on Investment (ROI) generated from
successful trades.
Definition - Explanation
Derived from "The Options Guide - Options & Futures Trading Explained"
If you were to exercise your call option after the earnings report, you invoke
your right to buy 100 shares of XYZ stock at $40 each and can sell them
immediately in the open market for $50 a share. This gives you a profit of $10
per share. As each call option contract covers 100 shares, the total amount
you will receive from the exercise is $1000.
Since you had paid $200 to purchase the call option, your net profit for the
entire trade is $800. It is also interesting to note that in this scenario, the call
buying strategy's ROI of 400% is very much higher than the 25% ROI achieved
if you were to purchase the stock itself.
How do we get the figures
In this example the stock of XYZ company is trading at $40. A call option
contract with a strike price of $40 expiring in a month's time is being
priced at $2.
You strongly believe that XYZ stock will rise sharply in the coming weeks
after their earnings report. So you paid $200 to purchase a single $40 XYZ
call option covering 100 shares.
Suppose you were correct and the price of XYZ stock rallies to $50 after the
company reported strong earnings and raised its earnings guidance for
the next quarter. With this sharp rise in the underlying stock price, your call
buying strategy will net you a profit of $800.
A Simple Example of Call Options
Call Options - What are they?
Charges
Conviction
Simon Gautier Hannes
Born 1960
Executive Director
Macquarie Bank
Simon Gautier Hannes
Si mon HANNES
Ord Mi nnett
Perpetual Trustee Co Limited - Ord Minnett
Simon HANNES
Leveraged Equities Account
In Addition to the Insider Trading charges,
Hannes was charged in relation to split
cash transactions conducted in the name
of Hannes and Booth at multiple bank
branches to stay under the AUSTRAC
reporting threshold of $10,000
1 . Insider trading in the options purchase (as Booth) - under Corporations Act.
2. Structured cash withdrawals (in his own name) - under Financial Transactions Act.
2. Structured cash withdrawals (as Booth) - under Financial Transactions Act.
Hannes was convicted on 17th September 1999 for insider trading on $2 million of
TNT securities and structuring withdrawals to avoid the reporting requirements
under the Financial Transactions Act. Sentenced to 2 years & 2 months but in
December 2002 at a retrial the court affirmed the guilty verdict and increased the
sentence to 2 years & 6 months imprisonment.
The Macquarie Group is a diversified international provider of
banking, financial, advisory and investment services.
The company started as Hill Samuel Australia (HSA), a wholly-owned
subsidiary of Hill Samuel & Co. Limited, London, established in
Australia in 1969, it began operations in Sydney in January 1970. In
1985 HSA to become Macquarie Bank Limited (MBL). Macquarie has a
highly regarded reputation in the industry.
Simon Gautier HANNES - The $2 Million Inside Trader
Simon Hannes, the former merchant banker convicted over Australia's largest insider trading case
The Australian Securities & Investments Commission (ASIC)
is an independent Australian government body that acts as
Australia' s corporate regulator. ASIC's role is to enforce and
regulate company and financial services laws to protect
Australian consumers, investors and creditors.
It was formally known the Australian Securities Commission
(ASC) and administers and regulates the following legislation;
* Corporations Act 2001
* Australian Securities and Investments Commission Act 2001
* Insurance Contracts Act 1984
Australian Transaction Reports and Analysis Centre (AUSTRAC) is an
Australian government agency, established in 1989 under the Financial
Transaction Reports Act 1988 and continued in existence under the
Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
Certain classes of designated financial services must be reported to
AUSTRAC, in particular cash transactions (ie. notes and coins) of
$10,000 or more. AUSTRAC passes information on to other
government agencies to help them act against tax evasion, organised
crime, money laundering, and welfare fraud.
David Knott, Chairman
Australian Securities and Investments Commission (ASIC)
Hannes was "a person in a position of trust who cynically
embarked on a calculated plan to profit from insider trading."
"Important warning to others who may be tempted to convert
confidential inside information to personal profit."
Company Conference in
Mt Buller discussed project
Tennis with potential fee
of $5 to $10 million
for Macquarie
$9,000.00
Withdrawal
Transaction Date: 9/09/1996
CBA Liverpool & Castleleigh
Simon Hannes
$9000
9th September 1996
$9,000.00
Withdrawal
Transaction Date: 9/09/1996
CBA Park &Castleleigh
Simon Hannes
$9000
9th September 1996
$9,000.00
Withdrawal
Transaction Date: 9/09/1996
CBA Wynyard
Simon Hannes
$9000
9th September 1996
$9,000.00
Withdrawal
Transaction Date: 9/09/1996
CBA Town Hall
Simon Hannes
$9000
9th September 1996
$9,900.00
Withdrawal
Transaction Date: 9/09/1996
CBANeutral Bay
Simon Hannes
$9900
9th September 1996
AUSTRAC REPORT
Cash Transaction Threshold
Submitted by CBAStaff
06/09/1996
Hannes was convicted of offences
under Financial Transaction
Reports Act 1988.
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27th June 2009
23rd Mar ch 2012
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Ord Minnett is one of Australia's leading wealth management
groups, catering to Private Clients, Corporate and Institutional
clients, and their Advisers. Ord Minnett was established in 1872
and considered a national icon. It is one of the most highly
respected names in the industry.
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Ord Minnett and their staff had no knowledge of
the criminal activities of Simon Hannes.
Ord Minnett was not criminally involved or
complicit in the commission of the offences
committed by Hannes.
Macquarie Bank and their staff had no knowledge
of the criminal activities of Simon Hannes.
Macquarie Bank was not criminally involved or
complicit in the commission of the offences
committed by Hannes.