Lawyer wanted: to sue the Australian government

I wonder if there are any young lawyers out there looking to make a name for themselves in a very big court case. I mean after all - what could be bigger than suing the Australian government for insider trading?

Allow me to explain, a little while ago Stephen Conroy, the federal Minister for Broadband, Communications and the Digital Economy announced that the government was going to break-up Telstra. There was a fair bit of controversy and the opposition had a bit of a go at the government for hurting the investment of 1.4 million people. However, after a brief uproar the issue subsided into relative silence.

What I want to know is why one detail was never given the attention it deserved - that of the Future Fund selling off one third or $2.4 billion worth of its shares in Telstra just three weeks before Conroy announced the break-up of the company. You’d think that the timing of this sell-off would be so blatantly suspicious that it would have the media screaming for the government’s blood. The facts speak for themselves:

1. The Future Fund sells off $2.4 billion worth of its shares in Telstra.

2. Three weeks later the Australian federal government announces the break-up of Telstra.

3. That very same day this announcement wipes billions from the total share value of the company.

The purpose of the Future Fund is to manage the superannuation of the public sector. The last thing the government wants to do is lose a sizeable chunk of this fund by its own actions and upset hundreds of thousands of public servants. Additionally, over half of the $4.7 billion worth of funds planned by the Rudd government for a broadband fibre network was to be paid by withdrawals from the Future Fund, an amount very similar to the value of the shares it just sold-off.

I don't know how the break-up will ultimately affect the future price of Telstra shares, but what I do know is that there is an awful lot of circumstantial evidence that the Australian government, or at least individuals in it have engaged in insider trading. The timing of the sell off and the motives of the politicians look very bad indeed, and with an election due next year, I wonder how it will affect the way the 1.4 million Telstra shareholders vote.