Ord Minnett pays $888k penalty

Private wealth management group Ord Minnett has been fined more than $800,000 after the corporate watchdog alleged it conducted shares trading knowing the trades were pre-arranged.

The Australian Securities and Investments Commission’s market disciplinary panel issued Ord Minnett an infringement notice relating to an incident in September 2021.

ASIC claimed Ord Minnett created a misleading impression that the trades were executed as an ordinary crossing when they were pre-arranged, and that it gave preferential treatment to the selling client to participate in the buy-back.

The company, which has a Perth office on St Georges Terrace, has paid a penalty of $888,000.

ASIC claimed Ord Minnett received instructions to start a buy-back on behalf of AWN Holdings and sell shares at $1 each in September 2021.

According to ASIC, Ord Minnett executed crossings between the selling client and AWN under the buy-back for a total of 2,073,561 AWN shares at 99.5 cents.

"This was the maximum price that AWN was allowed to buy its shares under the buy-back on this day and represented 52.4 per cent of the total shares to be purchased under the buy-back," the statement said.

"The [panel] considered that the crossings were pre-arranged, not done with indifference as to the identity of the buyer and seller and did not comply with ASX crossing rules."

ASIC said the disciplinary panel considered that the crossings were facilitated by Ord Minnett by not charging brokerage, with the selling client receiving the same outcome as if its shares were sold at $1 each.

"The [panel] had reasonable grounds to consider that Ord Minnett breached the market integrity rules as the crossings resulted in the market for AWN shares not being fair and orderly," ASIC said in its statement.

ASIC also found that on the same day it received the instructions, Ord Minnett bought AWN shares under the buy-back at prices above the limit allowed under the ASX listing rules.

"The [panel] had reasonable grounds to consider that this was a breach of the market integrity rules as it was contrary to the client’s instructions and the ASX listing rules," the statement said.

"While the [panel] considered that the contravention was a genuine error and inadvertent, Ord Minnett did not have adequate internal controls to prevent or detect the contravention and on being alerted to the contravention, did not take remedial steps in response.'

ASIC said compliance with the infringement notice was not an admission of guilt or liability.