From the safety of my holiday deck chair, I’m watching the unfolding tale of the Whitehaven Coal hoax with growing amazement.
On January 7, 24-year old environmental activist Jonathan Moylan issued a hoax press release which announced that the ANZ Bank had pulled $1.2 billion in loan funding to Whitehaven’s controversial Maules Creek coal project in the Gunnedah basin of NSW. Posing as an ANZ flak, Moylan wrote on bank letterhead that the reasons were the volatility in the coal market, cost blowouts and its corporate social responsibility policy.
In nearly 30 years of journalism I have never heard of a bank making such a statement, let alone discussing the affairs of clients in this way. It just doesn’t happen.
Remarkably, several media outlets dutifully reported the press release as news. Mayhem ensued. More than 2.8 m Whitehaven shares were traded in just 23 minutes causing an 8.8 per cent collapse in the share price. Within half an hour, the hoax was revealed and the share price recovered most of its losses. The net cost to investors was about $450 000 in market cap.
Now we have the Australian Stock Exchange and various political types baying for the blood of Moylan who apparently lives in the forest where the mine is set to be built. His PC and phone have been imaged by the ASX. There is talk of all manner of criminal and civil charges against him. He is being cast as a saboteur, a public menace, a threat to the capitalist order. Anyone who doesn’t demand his immediate hanging is condemned as irresponsible.
A few pertinent comments are needed here. He didn’t send his press release to the ASX, stockbrokers or shareholders. He sent it to journalists who should have known better. These reporters didn’t think to call the company, the bank or the ASX. They just printed it. No checking, no calls, no nothing.
They got punked by a kid up a tree in the forest. It’s a sad commentary on the state of financial journalism. It shows how much the PR industry has taken over the role of the journalist. It was on the bank’s letterhead, so it was regarded as fact. To blame the hoaxer is simply ludicrous.
Moylan has exposed the fragility of the system and should be commended for it. It begs the question: how much other PR twaddle makes it into print to mislead and dupe investors to part with their money? Plenty is the answer and usually it’s much more subtle than Moylan’s efforts. That no-one questioned the veracity of the information is astounding to me. It was so clearly implausible. Yet we don’t hold the media to account, only the hoaxer. As far as I can see, he’s guilty of crimes against personal hygiene and nothing more.
Adam Shand 
completely agree Adam. hoaxes and protests are an important part of a robust democracy. shutting them down scares me more than their impact.
Chat on email, however; is his conduct not deceptive?
The fact that the hoax worked just makes everyone look foolish, including himself. He probably and naively didn’t think the embarrassing idea could gain any traction. Journo status has been degraded and
diluted by untrained daily bloggers/commentators such as myself. Blame the digital revolution! C.
It’s not just financial journalism that’s guilty of this sort of laziness and ineptitude. This story is indicative of what’s happening in journalism across the board. The blame for this debacle should be squarely laid at the feet of lazy, irresponsible journalists (who are certainly not helping in raising the prestige of their benighted profession).
Yes Lefty he was but if every funster who tried to deceive the media got porridge the jails would overflowing. It’s incumbent that we in the media smell the rat. However some journos spend too much time with rodents and now can’t recognise ’em.
Certainly agree with that Mel. Part of the problem is the huge job cuts and a lot of green new recruits coming in. But for heaven’s sake ONE phone call would done for this. Instead it just gets posted, unbelievable. Technology has made journalism so much easier and infinitely more powerful, but the human element is still critical and subject to built-in flaws.
Amusing that the SMH actually ran a yarn today asserting that the reported trading losses weren’t so big! You are spot on Adam. We are awash with PR and no one seems to talk to the horse’s mouth. (Preferring the other orifice.)
Doesn’t surprise me. I spent hours on the phone last week to various government departments cancelling my newly deceased sister in laws pension, medicare, electoral roll and telephone. Not one asked for proof in the way of the death certificate. All they required was my name and contact number. To date, none have even called back to see if they were correct.