It has been a difficult week for JB Hi-Fi Limited (ASX: JBH) shareholders. Mostly due to losing its illustrious CEO, Mr Richard Murray, to Premier Investments Ltd (ASX: PMV), but also the decline in the JB Hi-Fi share price.
In the last week of trading, shares in the Australian retailer have fallen over 12%. Although, industry experts are pointing towards the suspicious 10% fall that occurred prior to Murray's departure announcement.
Something more insidious in the JB Hi-Fi share price?
Given the abnormal slip in an otherwise quiet week for the company, some eyebrows have been raised following the subsequent announcement. As such, industry expert, Paul Rickard, has called for the corporate watchdog to investigate claims of insider trading in JB Hi-Fi shares.
Rickard's perspective is the downward move in the retailer's share price was completely understandable. In Richard's words:
It is a huge coup for Solomon Lew (chairman of Premier Investments) because he has just hired Australia's best retail executive… Murray's exit is a huge loss for JB Hi-Fi.
The events leading up to this news are what have drawn calls for action. Mr Rickard laid out circumstantial evidence, mostly pertaining to the lack of news leading up to the big event while the share price collapsed.
Additionally, volume reportedly spiked to 1,085,000 shares across the 3 days prior to the news. This is compared to an average of 436,000 shares over the preceding 10 trading sessions.
Other cases of insider trading
The ASX is no stranger to cases of insider trading. It is likely there is plenty of insider trading that goes undetected. However, over the years there have been occurrences that have been uncovered.
We covered two such cases previously. These included a director of the company now called Weebit Nano Ltd (ASX: WBT) who was sentenced for illegally manipulating the company's share price. The other incident involved a former director of the company now known as Nova Minerals Ltd (ASX NVA).
Who stands to benefit?
In the case of JB Hi-Fi's share price, Rickard gives an estimation of 50 people could have had inside knowledge. This list extended from both JB and Premier Investments' directors down to investor relations teams and lawyers. In addition to those who had to work with sensitive information, other colleagues could have been privy to the move ahead of time.
Closing out, Rickard stated:
I am not pointing the finger at any Director, family member, work colleague or individual. But the recent trading in JB Hi-Fi shares stinks, and prima-facie, "insiders" were acting. Over to ASIC to investigate.
