The Australian Federal Police and the Australian Securities & Investments Commission have frozen the men’s assets, which include Kamay’s purchase of a $2.4 million three-bedroom loft apartment in the inner-Melbourne suburb of Albert Park that was designed by twins Alisa and Lysandra Fraser as part of the reality television show The Block. Court documents reveal that the AFP also used covert internet inquiries through Facebook to reveal that the two men were “friends”. Kamay, who now faces seven criminal charges, allegedly offered his ABS friend a bribe of more than $50,000 to disclose the inside information. On Friday, Kamay was released on bail to his family home in the Melbourne suburb of Eaglemont with sureties of $200,000 and $300,000. The 24-year-old Hill was simultaneously arrested in Canberra on Friday and is being transported to face five criminal charges in the Melbourne Magistrate’s Court on Monday. He is alleged to have provided the confidential information to Kamay, including housing and building approval figures, to ‘‘predict fluctuations in the Australian dollar’’ before it was released by the ABS strictly at 11.30am on the relevant days. Fairfax can now reveal that Pepperstone Financial, the ABS, Kamay’s alternative broker Axicorp and Kamay’s employer the National Australia Bank were all brought into the inner-sanctum of the AFP sting to help build a case. NAB and the ABS monitored the two men in their offices for months using survelliance cameras and phone taps. “About 11.06am on 2 April 2014, Hill was observed leaving his desk at the ABS in Canberra, with a phone and a piece of paper ... about 11.07am, Kamay was observed leaving his NAB workplace in Melbourne,” court documents reveal.

On April 27, perhaps sensing the authorities were closing in, Kamay drove in his BMW roadster to pick Hill up in Box Hill and attend the Optus Connect store where he purchased two pre-paid mobile phones. By this time Hill and Kamay were “deliberately making small trades in the wrong direction when they already knew the outcome” in an effort to throw police off their trail. In one of their last recorded exchanges on May 2 this year, Hill called Kamay to tell him “yeah i got a bit for you, all three” to which Kamay replied “Let’s go”. NAB have moved to distance itself from the scandal, emphasising that the Kamay’s trades were made in his personal capacity and that “no NAB money, no NAB customer money or NAB systems” were used. NAB chief executive Cameron Clyne sent an internal message to all staff on Friday urging them to report any illegal behaviour. “I want to be clear: the activity alleged by authorities is unlawful and completely unacceptable,” Mr Clyne wrote. But it was nine months earlier when Pepperstone Financial’s chief executive Owen Kerr twigged to the trades and began investigating Kamay’s LinkedIn profile. “Kamay was taking quite decent size positions which were larger than his account size could sustain if they went the wrong way, so they were really an all-or-nothing bet and not something someone would normally rationally make,” Mr Kerr says. “He would trade just before the announcements. The earliest they would get in was half an hour but mostly three to five minutes or sometimes even 30 seconds.” Mr Kerr immediately rang ASIC to deliver the case on a platter but was told the allegations were outside their jurisdiction. “They said contact the AFP. I think we may have rung the wrong part of ASIC; I think we contacted our licensing authority when we probably should have contacted market abuses or something,” Mr Kerr says.

Mr Kerr’s first reaction was to shut down the account but the AFP moved quickly to request the account continue “as usual” so they could continue to monitor Kamay’s trades. “When Kamay traded we would have to contact the AFP to get authority to proceed and Kamay would call us and be quite nervous about what was going on because it wouldn’t appear in his bank account straight away,” Mr Kerr says. “We just told him it was in processing, we didn’t give anything away,” Mr Kerr said. The NAB employee Kamay went on to make around 50 more online trades worth around $1.5 million with Pepperstone. He made more than $5 million in online trades through his alternative broker Axicorp which was also conscripted as part of the sting. “The guys at the top made sure no one else in the company knew,” head of sales at Axicorp Phil Horner says. “From an outsider's point of view I think a lot of people think they were pretty dumb about it. It’s not much of a mother’s day present,” Mr Horner said. Pepperstone’s Mr Kerr warned that the two men’s trades were taken by major investment banks in New York including Deutsche Bank, UBS, BNP Paribas and Goldman Sachs, which were now likely to seek restitution.

With Nassim Khadem