As reported in the May 29, 2009 issue of the Sydney Morning Herald, Australian businessman David Waterhouse has accused Merrill Lynch (and its subsidiary Berndale Securities) of engaging in the largest case of insider trading in Australia history.
These allegations arise from a legal dispute between Berndale and How Trading, an account Mr. Waterhouse used to trade options. Berndale sued How Trading for $9.2 million and How Trading has counterclaimed for $4 million. According to the Morning Herald, the securities firm allegedly used the How Trading accounts to short-sell $55 million in Australian stocks just days before “awful” news was going to be reported by Merrill Lynch’s head office in New York in January 2008.