Austock Securities has paid a $30,000 penalty for breaching the market integrity rule, according to the Australian Securities and Investments Commission (ASIC).
ASIC’s Markets Disciplinary Panel fined the stockbroker after it entered an order to sell a number of shares in Newcrest Mining, while actually intending to sell shares of Engenco Limited.
As a result, the price of Newcrest Mining fell by 5.5 per cent, which further resulted in 98 market transactions totalling more than $4.1 million.
Austock was in breach of the Corporations Act by contravening ASIC’s market integrity rule 5.9.1, which provides that a "market participant must not do anything which results in a market or product not being fair and orderly."
Although the designated trading representative (DTR) involved in this matter was an experienced DTR who had no prior record with the regulator, he failed to perform this action.
"An important aspect to the role of the DTR is to review and prevent the entry of orders into the trading platform that could result in a market that is not fair or orderly – this is a critical measure maintaining the integrity of the market," ASIC stated.
Austock cooperated with ASIC throughout the investigation and decided not to contest the matter, which ASIC said would save time and money.
The regulator believes this was an isolated incident.
