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Routine surveillance from the Australian Securities and Investments Commission (ASIC) had identified repeated suspicious trading by an Openmarkets client.
The client had placed simultaneous bid-and-ask orders in the same security at the same price on 2,011 occasions. Openmarkets had reasonable grounds to suspect that these orders were likely to have the effect of creating an artificial trading price or a false or misleading appearance of active trading, ASIC said.
Openmarkets did not have appropriate supervisory procedures to ensure compliance with requirements, the regulator said, adding that the retail broker also had a shortage of staff with required skills to carry out effective trade surveillance.
The company has now entered into an enforceable undertaking in order to comply with an infringement notice issued by the Markets Disciplinary Panel (MDP), which determines whether notices should be given for alleged breaches of market integrity rules.
The enforceable undertaking requires Openmarkets to appoint an independent expert to assess, report on and identify remedial actions necessary for effective trade surveillance.
This outcome sends a clear message to market participants that breaches of market integrity rules will result in substantial penalties that should not be seen as a cost of doing business, the ASIC said after banning Openmarkets’ former Acting Head of Trading Virginia Owczarekfrom from providing any financial service for three years.
Since these matters were identified, Openmarkets said in a separate statement that it has overhauled its business, commissioned an independent review of its trade surveillance systems and appointed a new leadership team to deliver on this strategy.
($1 = 1.5029 Australian dollars)
