In a circular released on Friday, ASIC’s Market Disciplinary Panel (MDP) revealed the details of an infringement notice that was issued to the financial services firm on 14 June 2013.
The panel issued the penalty to Credit Suisse for “not having in place adequate organisational and technical resources for its automated order processing system to account for corporate actions, which interfered with the efficiency and integrity of the market – and resulted in a market for a stock not being both fair and orderly”.
The fine relates to a Credit Suisse client’s order to sell 2,948,931 ordinary shares in Hastie Group Limited at a limit price of $0.315 on 7 November 2011.
The client did not take into account the fact that Hastie was trading on a deferred settlement basis due to a 10 to one share consolidation (‘reconstruction’) on 7 November 2011.
Due to a fault with Credit Suisse’s automated order processing (AOP) system, only a small part of the relevant order was executed – ultimately resulting in a 48 per cent decrease from the reconstruction-adjusted last trading price of $0.98.
“The impact of the resulting trade had the potential to damage public confidence in the market,” said the MDP.
The breaches were “negligent” on the part of Credit Suisse, and the financial services company failed to self-report the breaches to ASIC or inform both ASIC and the ASX in a “timely manner”, said the panel.
Credit Suisse has previously been sanctioned by the ASX Disciplinary Tribunal on six occasions since 2003.
The full infringement notice concerning Hastie Ltd is available here.
