Bell Potter Securities has paid a penalty of $358,000 to comply with an infringement notice given to it by ASIC’s Markets Disciplinary Panel (MDP).
The infringement notice relates to bids made in July 2015 by Bell Potter, acting on its own behalf, for the shares of DirectMoney Limited.
Bell Potter was the lead manager and underwriter to a public capital raising for DirectMoney in July 2015 as the firm undertook a backdoor listing on the ASX.
According to ASIC, after the first day of trading in DirectMoney shares (which did not meet expectations), Bell Potter’s senior management decided to invest $200,000 in DirectMoney.
An employee trader was instructed to carry out the trading but, according to the MDP, the trader was put in a position of conflict.
“The trader was under an instruction from senior management to fill the buy-order subject to the daily volume limit, but was being influenced by the Equity Capital Markets area and Hong Kong division of Bell Potter to support the share price of DirectMoney,” said ASIC.
“The MDP was satisfied that, even accepting that the initial decision to invest in DirectMoney may have been a genuine commercial decision, the manner of implementation of the decision by the employee trader, acting under the instructions or influence of the Equity Capital Markets division and the Hong Kong division, involved market manipulation,” said ASIC.
Bell Potter notified ASIC of the suspicious trading in May 2016, but the MDP considered that notification to have been “too late”.
“The MDP considered that Bell Potter had formed reasonable suspicions earlier in July 2015 when concerns were raised by their internal compliance area,” said ASIC.
