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Embarrassment for regulator with premature release of market sensitive information.

Editorial Staff

Here's an interesting situation. A competition regulator, by definition in possession of market sensitive information, has "inadvertently published on line" information relating to a proposed "merger."

Australian competition regulator, the ACCC, admitted in a media release at yesterday 15:35 Sydney time, that it had prematurely published information relating to the decision to oppose the proposed "merger" between TPG Telecom Limited (ASX: TPM) and Vodafone Hutchison Australia Pty Ltd (ASX:HTA). It was an later, after the market closed, that a full statement was issued.

The result of the early publication was a frantic sell-off: the news was unexpected by many. The response of the markets was immediate and brutal: TPG's shares fell more than 13% - which translates to about AUD1) and VHA watched its relatively small issue fall by more than 28%.

The place of publication was the "Mergers Register," and appeared "briefly." Briefly isn't brief enough and the statement about the inadvertent publication, headed "ACCC OPPOSES TPG VHA MERGER," then broadcast the news, albeit in brutal, truncated, form to the ACCC's mailing list so ensuring much wider dissemination than the original error but also preventing anyone taking advantage of information known to relatively few.

Even so, the publication of market sensitive information is a serious matter. The fact that there was rapid damage limitation is mitigation not a defence. If a company had made a similar error relating to market sensitive information in advance of official notifications, it would be harshly treated.

Who regulates the regulators? Is it ASX or ASIC? The actions of ACCC appear to be outwith the authority of both. ACCC itself? That's possible but unlikely. Images of someone trying to spank themselves come to mind. Then there's the point that, at that point, the confidential information was to be protected as data - but as data protection relates, primarily, to people not companies, that might not be usable, either.

Whoever it is, someone needs to look into it and punishment needs to be meted out as it would be if a company, or a director of a company, tweeted (for example) news ahead of a formal announcement.

Vodafone has already said it intends to take action over the conduct.

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