Acts

Published on February 24th, 2013 | by Anne McNevin

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Market fraud or politics of the market?

Image: (by Lock The Gate Alliance) Demonstrators in Sydney outside ASIC hearing into Jonathan Moylan’s action, 24 Jan 2013.

On 7 January 2013, Jonathan Moylan caused a stir on the Australian stock market. Moylan created a fake press release from the ANZ Bank, claiming that due to environmental concerns, the bank was withdrawing finance from Whitehaven Coal’s $1.2 billion project to develop a new coal mine at Maules Creek in northeastern New South Wales. The broadsheet press ran with the story and within 25 minutes Whitehaven Coal’s share price had dropped by 31 cents, wiping $314 million off the value of the company. Trading was then stopped by the Australian Securities and Investment Commission (ASIC) and the share price gradually recovered. Those who sold shares in haste lost money. Moylan is currently under investigation by ASIC. Legal commentators speculate that he will likely face serious criminal charges under the Australian Corporations Act, with penalties of up to ten years in gaol [1].

Moylan headed an activist group called ‘Front Line Action on Coal.’ He argued that the hoax was motivated by concern for the impact of coal mining on climate change and by more specific concerns about the impact of the coal mine on the health of the local community and its vulnerability to compulsory acquisitions of land [2]. Public debate on Moylan’s hoax was polarised immediately.  Federal Greens leader, Christine Milne, praised the act as ‘part of a long and proud history of civil disobedience, potentially breaking the law to highlight something wrong’ [3]. Former Greens Leader, Bob Brown, compared the action to his own protests against the proposed damming of the Franklin and Gordon Rivers in Tasmania some 30 years ago, a protest – now widely regarded as worthy and inspired – for which both he and Milne were arrested and gaoled [4]. Positive commentary focused largely on the bigger environmental picture that gave Moylan’s hoax its legitimacy.

Negative commentary focused, by contrast, on the illegality of the hoax and the harm it had caused. Critics described it as ‘unethical,’ as an instance of ‘identity theft’ and ‘informational corruption’ that threatened the reliability of the digital knowledge on which we are all increasingly dependent [5]. Conservative politicians called for the harshest of sentences as a warning to others considering any similar actions [6]. The Chairman of Whitehaven Coal and former National party leader, Mark Vaile, called the hoax ‘un-Australian’ – tapping into a particular kind of national egalitarian ethos that has been called on in recent years to defend or to pillory a variety of policies and protests. In this case, Vaile argued that the shareholders harmed through the hoax were small-time, mum and dad investors who were unfairly bearing the brunt of Moylan’s misdirected actions [7]. This populist rhetoric of ‘shareholder democracy’ has been on the rise in recent years and is part of the legitimising tools for an economy increasingly driven by financial services (over 10% of GDP) [8].

Regardless of its immediate effect on the progress of the Whitehaven coal mine project, Moylan’s hoax is an act with important performative dimensions. First, it implicitly questions the limitations of standard jurisdictions and geographies that attempt to capture the extent of ‘affectedness’ for a coalmine such as this. In this case, as in other struggles related to climate change, affected communities are hard to define since the ‘stakeholders’ involved (to use the current governmental jargon) extend across national borders (as investors as much as potential victims of climate change) and implicate future generations. On account of the local and global impact of the coal mine on the environment, Moylan’s act, as much as the coal mine itself, becomes a flashpoint of social struggle over environmental justice and democratic process. Moylan’s act questions the legitimacy of governmental procedures authorising the coalmine when they are not accountable to the relevant community of ‘the affected’. In this way, the act challenges prevailing repertoires of democracy.

Secondly, Moylan’s act politicises the very notion of market confidence that his fraudulence is said to have undermined.  This dimension of his protest prompts both the harshest criticism and the gravest potential consequences. The ability to affect share prices so dramatically is likely to be the most significant factor in any measure of deterrence attached to criminal charges served on Moylan. The anticipated severity of the authorities’ investigation says something about the effectiveness of the act, not so much directly on the coalmine itself, but on the credibility and functionality of the stock market. It is here that this act opens up a profound and expansive platform for activism and critique, that is, the authority of the market itself. Though he may not be the first to subvert share trading in the way that he did, Moylan has undoubtedly exposed the fragility of a financial system whose ‘informational integrity’ (as opposed to ‘informational corruption’) often seems based much more on perception and control of communication than on any objective measure of the value of things, such as coal or clean air, in themselves.  In the wake of the GFC, Moylan’s act turns market ‘fraud/confidence’ back in on itself to claim it as a site of politics rather than an article of faith.

 

[1] Michael Adams, “Public Nuisance or Fraud? Whitehaven hoax puts market creditability at risk.”  The Conversation.  10 Jan, 2013. http://theconversation.edu.au/public-nuisance-or-fraud-whitehaven-hoax-puts-market-creditability-at-risk-11544

[2] Cited on Breakfast, ABC Radio National Broadcast, 9 Jan, 2013.

[3] Cited on Breakfast, ABC Radio National Broadcast, 10 Jan, 2013.

[4] Bob Brown, “It’s coalminers, not Moylan, who are costing us the earth.” The Age, 11 Jan 2013.

[5] Edward Spence, “Whitehaven hoax was an unethical act that was harmful to all” The Conversation, 11 Jan 2012.  http://theconversation.edu.au/search?q=moylan+whitehaven

[6] Cited in Sarah Joseph, “The Whitehaven hoax: ratbag act or legitimate protest?” The Conversation, 15 Jan, 2013.  http://theconversation.edu.au/the-whitehaven-hoax-ratbag-act-or-legitimate-protest-11604

[7] Cited on Breakfast, ABC Radio National Broadcast, 9 Jan, 2013.

[8] Michael Adams, “Public nuisance or Fraud?” (see [1] above).

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