CONCERNS over the way ASIO handles its paperwork have been revealed by the spy agency’s watchdog.
Since 2008, the Inspector General of Intelligence Security has been investigating “deficiencies in record keeping” at the domestic espionage organisation.
The findings, in response to questions asked in a parliamentary committee by Liberal senator Russell Trood, are likely to worry Foreign Minister Kevin Rudd among others.
“The record-keeping deficiencies,” says the inspector Vivienne Thom, relate to “the disclosure of information to authorised foreign authorities”.
What ASIO is telling other nations is not clear, nor why paperwork is not being kept.
Senator Trood has asked Dr Thom if her office would continue to watch ASIO’s management of paperwork.
“Staff have and will continue to regularly review relevant ASIO records so that we might be satisfied that decision-making and record-keeping practices are proper and appropriate and accord with all internal policy requirements.”
The agency has declined repeatedly to comment on a security incident at its massive new headquarters building, which is being built near Parliament House.
A 19-year-old man was injured and stuck in a hole after breaching night security at the site earlier in March.
Cairo, Egypt (CNN) — It is an anguished mother’s appeal to a distant president, who has been using deadly force to crush an uprising.
“At least let someone talk to him, let someone see him,” the woman says, her voice cracking with emotion, her eyes filling with tears. “I want to see my son. I have no idea where he is!”
The last time Maha Radwan saw her son Muhammad was when he unexpectedly appeared on Syrian state television last Saturday, labeled a member of a “foreign group paid to destabilize Syria.”
The 32-year old Egyptian-American sat stiffly on a couch, answering questions in what appeared to be a televised interrogation. The Syrian anchorwoman introducing the report described it as a “confession.”
Radwan admitted he had exchanged e-mails with someone in Colombia who tried to hire him to take photos of events in Syria.
“How much were they paying you for these photos?” the interrogator asks.
“Approximately 100 Egyptian pounds (around $17),” Radwan answers in Arabic.
“Have you visited Israel at any time?” the interrogator asks at another point.A closer look at Bashar al-Assad
“I went to meet a friend in the West Bank,” Radwan responds, saying he traveled on his American passport.
Radwan’s mother says she was dumb-founded when she saw the video for the first time. It took time for the implications of the televised “confession” to sink in. Her son was now a prisoner of Syria’s much-feared security services, agencies with a well-documented history of torture and human rights abuses.
“The Syrian government did not charge him with anything yet officially,” Radwan’s mother says, “You know what? They left that to the media. They put that video together, and one of the channels picked it up and turned the whole thing into espionage.”
Syrian authorities have not allowed any contact between lawyers or Egyptian or American diplomats and their son — saying only that he is being “investigated.”
Muhammad Radwan was born and raised in Houston, Texas, the son of affluent Egyptian parents employed by the Saudi Arabian oil giant Aramco.
After graduating with an engineering degree from Texas AM University, Radwan worked for several years in Saudi Arabia, before taking a year off to back-pack across Latin America. On his Twitter account, Radwan describes himself as an “engineer to international vagabond to engr…cyclic.”
Last April, Radwan went back to work, this time working for an oil company in Syria. But in January 2011, Radwan rushed to Cairo to join the protests in Tahrir Square against Egyptian president Hosni Mubarak. Friends posted a photograph of him on a “Free Radwan” web-site, after he had been shot in the forehead with buck-shot during clashes with Egyptian security forces. Relatives say he wore a wool hat for days to hide the wound from his mother.
After the overthrow of Mubarak, Radwan gave an interview to the Voice of America along with several Egyptian revolutionaries. He described how protesters had organized themselves, in anticipation of a government crackdown.
“They actually went into certain neighborhoods, timed how long it would take for different neighborhoods to eventually congregate, at the point where they figured security forces would face them,” Radwan says, speaking in fluent, American-accented English.
Syrian state television has used parts of the VOA report, to accuse Radwan of trying to export Egypt’s revolution to Syria.
“They’re using him as a scapegoat to parade him on TV,” says Radwan’s cousin Nora Shalaby.
“It happened in Tunisia, then in Egypt, and in Libya, and its all the same in Bahrain and Yemen. Always blame it on ‘foreign elements.’ It’s a ridiculous accusation.”
According to his Twitter account, Radwan was following the growing protests in Syria, remarking at one point that the atmosphere reminded him of the revolutionary fervor in Egypt last January. His final tweet, posted on March 25, appears to have been hastily typed from Damascus’ landmark Umayyad Mosque, where anti-government protesters were demonstrating.
“Umayid mosque #syria just turned upside down, pro anti rwgome crash,” he wrote.
Radwan’s father traveled to Damascus last week, to lobby Syrian authorities for information on his son’s whereabouts. Meanwhile Maha Radwan is mobilizing supporters here in Cairo.
On Thursday, she stood quietly with more than fifty relatives and friends in front of the gates of the Syrian Embassy. Armed only with “Free Radwan” signs and flowers, the small crowd stood in silence, facing a photo on the embassy wall showing a smiling Syrian president Bashar al-Assad.
After more than an hour, the Syrian ambassador stepped out to address the crowd.
Yusuf Al-Ahmad said it would take time to process Radwan, because he was one of several suspects detained at Friday prayers.
“He also stressed that it was Radwan who confessed and that he was obviously not subjected to any means of torture to do so,” says Shalaby, Radwan’s cousin, casting doubt on everything the ambassador said.
Don’t be surprised if people connected with some of the hottest new tech companies find themselves hauled into court on insider trading charges.
Many in Silicon Valley apparently believe that insider trading rules don’t apply to buying or selling stakes in non-public companies like Twitter and Facebook.
Recently, in an article about a Facebook employee who allegedly bought shares in his the company in advance of an investment by Goldman Sachs (NYSE: gs), Sarah Lacy and Michael Arrington of TechCrunch wrote: “In a public company this would almost certainly violate a number of federal laws. However, say sources, the fact that Facebook is not (technically) a publicly traded company means those laws don’t apply.”
Henry Blodget of Business Insider recently voiced a similar thought in an article about the venture capitalist John Doeer.
“Legendary venture capitalist John Doerr is said to have once described his investment philosophy as ‘no conflict, no interest.’
In other words, when Doerr and venture capital firm Kleiner Perkins aren’t privileged enough to enjoy a potential conflict of interest with respect to a potential investment, they have no interest in making the investment.
In the public markets, some investors might describe this as having ‘an edge.’ Others might describe it as investing with the benefit of influence and information that other investors don’t have. Others might say, at least in some cases, that it might be investing with inside information-a.k.a., insider trading.
But in private markets there are no clear rules about insider trading.”
Based on discussions I’ve had with other folks in the tech start-up scene, this interpretation is very common.
“It’s very widespread,” Silicon Alley Insider reporter Nick Carlson told me.
Wrong
It’s also wrong. Insider trading rules aren’t limited to stocks traded on public stock markets-they apply to every kind of security interest or option to buy shares.
But armed with this mistaken interpretation, it seems likely that people in the tech sector are probably buying or selling stakes in companies while in possession of material non-public information.
Companies like SecondMarket put investors together with shareholders of non-public companies. This allows people – mostly early stage venture capital investors or employees who were compensated in shares – to monetize their stakes without waiting for an IPO or a buyout.
It’s easy to see how insider trading can develop in such illiquid and non-transparent markets. If, for instance, you are a Facebook employee who has been privy to internal discussions about a possible acquisition of the social-media start-up Foursquare, you might decide to invest in Foursquare ahead of the acquisition.
Or maybe you’re a venture capitalist who has chatted with Foursquare founder Dennis Crowley about a not yet publicly announced new feature that you think will really improve user experiences. Based on the chat, you buy up some shares on Second Market.
In either case, you’d be engaging in illegal insider trading that could land you in court facing the Securities and Exchange Commission or even criminal charges.
Insider trading is barred under Section 10(b) of the Exchange Act of 1934 and Rule 10b-5, a regulation that the SEC made to implement that provision of the Exchange Act. They bar anyone from using “any deceptive device” in connection with the purchase or sale of securities.
The SEC long ago persuaded the courts that using “material non-public information” to make trades was a form of fraud that was barred under the act-giving birth to the rule against insider trading.
While it’s true that most insider trading cases involve the purchase or sale of stocks that are traded on public exchanges, there’s nothing in the rule or the case law that limits enforcement to public stocks. Buying or selling any security-including privately held shares of non-public companies – while possessing material non-public information is potentially insider trading punishable under the law, regardless of where the sales take place.
The SEC is now on notice that the tech sector seems to have adopted the mistaken belief that buying stakes in private companies while possessing inside information is not illegal.
Facebook fired a senior employee who bought Facebook shares through secondary markets in violation of the company’s policy on insider trading, according to people with direct knowledge of the matter.
The episode could bring further scrutiny to markets that deal in shares of private companies like Facebook, Twitter, LinkedIn and Zynga. The Securities and Exchange Commission began an inquiry into these markets last year.
The employee, Michael Brown, worked in corporate development. In a statement e-mailed by his lawyer, Edward Swanson, Mr. Brown said: “I did buy Facebook stock on the secondary market in early September 2010, and I did so with the absolute best of intentions and only because I believe in Facebook.”
Mr. Brown’s ouster was first reported by TechCrunch.
TechCrunch initially wrote that Mr. Brown had bought the shares ahead of a $1.5 billion financing round led by Goldman Sachs in January.
In an apparent reference to that report, Mr. Brown said: “False and damaging information has been published about my actions.” He added that he had no knowledge of the Goldman Sachs deal “until it appeared in the press in January 2011.”
TechCrunch updated its story Friday morning, saying that Mr. Brown may have bought the shares in September.
Facebook fired Mr. Brown a few weeks ago, according to the people with knowledge of the firing, who agreed to speak on the condition of anonymity because they were not authorized to discuss it.
Stephen Diamond, a professor at Santa Clara University who teaches securities law, said that many of the legal restrictions on insider trading applied equally to private and public company shares.
“If the employee had material information which he did not share with the seller, he could be charged with violating the law,” Professor Diamond said.
The episode could also bring further scrutiny from the S.E.C. to exchanges like SecondMarket and SharesPost, he said.
“This could be evidence that the control procedures in these markets are not sufficient,” Professor Diamond said.
According to Mr. Brown’s LinkedIn profile, he had been employed at Facebook since April 2009. Before that he worked at Foundation Capital, a Silicon Valley venture investing firm.
“I am saddened by the course of events that led to my departure and the incorrect reporting of it,” Mr. Brown said. “I am now focused on moving on past this unfortunate series of events.”
Two Victorian men have been charged with multiple counts of insider trading while acting as brokers for Citigroup Wealth Advisors in Perth, while a third man has also been charged following an investigation by the Australian Securities and Investments Commission (ASIC).
Roberto Gerald Catena, Colin Edward George Hebbard and Flemming Hood Nielsen appeared in the Perth Magistrate’s Court for allegedly possessing inside information regarding a possible takeover of Vision Systems in July and August, 2006.
Catena has been charged with 20 counts of insider trading while employed as a broker with Citigroup for advising five of his clients, including Nielson, to purchase Vision Systems shares.
Hebbard has been charged with four counts of insider trading while employed as a broker with Citigroup for advising three clients to purchase Vision Systems shares.
Nielson has been charged with 13 counts of insider trading for receiving inside information while a client of Catena and using it to purchase shares of Vision Systems through Citigroup and CommSec.
All three men were not required to enter a plea, with the matter being adjourned until 27 April.
