Asic starts proceedings against State One

The Australian Securities and Investments Commission has launched civil proceedings against Perth-based State One Stockbroking, and in a separate matter has accepted undertakings from two liquidators employed by Melsom Robson.

Asic has alleged State One made bids on behalf of a client in 2011 in which it should have suspected that the client placed the orders with the intention of creating a misleading appearance of the market for (or price of) an undisclosed stock.

It has also alleged that, in 2011, State One failed to provide clear guidance to its employees responsible for reviewing post-trade alerts on what to do in the event of receiving those alerts.

State One received a $425,000 infringement notice from the Markets Disciplinary Panel in regards to the allegations in March, however the firm failed to comply with the notice.

Asic doesn’t have the power to enforce an infringement notice be paid, however if payment isn’t made then it has the power to initiate civil penalty proceedings.

In the Federal Court, the watchdog will be seeking declarations that State One failed to comply with market integrity rules.

“Since August 2010 the MDP has issued 51 infringement notices in relation to alleged contraventions of the market integrity rules of which 50 have been complied with, the remaining notice being that issued to State One,” Asic said in a statement.

Meanwhile, Asic has also accepted voluntary undertakings from George Lopez and Evan Verge, who are both liquidators employed by Melsom Robson as partners, for failing to comply with basic obligations.

“Asic’s ongoing industry-wide project to test compliance with registered liquidators’ obligations to lodge documents and publish notices required under the law continues to identify practitioners not complying with basic regulations,” it said.

“Mr Lopez and Mr Verge acknowledge the non-compliance and have taken the necessary steps to rectify it.”