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ASIC Censures CFD Trader Via Magistrates Court for Market Manipulation

by Andrew Saks McLeod
  • ASIC has today announced that it intends to pursue criminal proceedings against a New South Wales-based CFD trader for market abuse, with a maximum penalty of $495,000 or 10 years imprisonment.
ASIC Censures CFD Trader Via Magistrates Court for Market Manipulation
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Australia's financial markets regulator ASIC has more than demonstrated its mettle recently, resulting in its standing as a highly regarded authority internationally.

asic-logo

Today, the regulatory authority has announced that it has pressed criminal charges against New South Wales-based Contracts For Difference (CFD) trader for what ASIC considers to be market manipulation, which resulted in a court case being scheduled at Brisbane Magistrates' Court for January 24 this year.

The charges were brought against Kristoffer John Watts, a day-trader living in Casuarina, regarding his trading in CFDs with Austpac Resources NL and Smarttrans Holdings Ltd between 22nd of September, 2011 and 27th of March, 2012.

ASIC alleges that between September 22, 2011 and March 27, 2012, Mr. Watts entered into CFD positions in relation to Austpac Resources NL that caused 302 trades of APG shares on the ASX, which had the effect of creating a false or misleading appearance with respect to the price for trading in APG shares.

Over the 6 months, ASIC determined that Mr. Watts traded through a direct market access account. Under this model, the CFD issuer hedges its exposure to a client’s trading position by causing an equivalent position to be taken in the underlying security on the ASX.

According to ASIC's investigation, between September 22, 2011 and October 21, 2011, Mr. Watts entered into CFD positions in relation to Smarttrans Holdings Ltd that caused 82 trades of SMA shares on the ASX, which had the effect of creating a false or misleading appearance with respect to the price for trading in SMA shares.

On January 13, 2012, Mr Watts entered into CFD positions for APG that caused one trade of APG shares on the ASX, which had the effect of creating a false or misleading appearance of active trading in APG shares on the ASX.

During his initial court appearance on January 24, Mr. Watts was required to surrender his passport and accept conditional bail until the next hearing which will be at a date which has not yet been set.

In congruence with section 1 of the Corporations Act 2001, if found guilty, Mr. Watts could be subject to a maximum penalty of $495,000, 10 years imprisonment, or both.

Australia's financial markets regulator ASIC has more than demonstrated its mettle recently, resulting in its standing as a highly regarded authority internationally.

asic-logo

Today, the regulatory authority has announced that it has pressed criminal charges against New South Wales-based Contracts For Difference (CFD) trader for what ASIC considers to be market manipulation, which resulted in a court case being scheduled at Brisbane Magistrates' Court for January 24 this year.

The charges were brought against Kristoffer John Watts, a day-trader living in Casuarina, regarding his trading in CFDs with Austpac Resources NL and Smarttrans Holdings Ltd between 22nd of September, 2011 and 27th of March, 2012.

ASIC alleges that between September 22, 2011 and March 27, 2012, Mr. Watts entered into CFD positions in relation to Austpac Resources NL that caused 302 trades of APG shares on the ASX, which had the effect of creating a false or misleading appearance with respect to the price for trading in APG shares.

Over the 6 months, ASIC determined that Mr. Watts traded through a direct market access account. Under this model, the CFD issuer hedges its exposure to a client’s trading position by causing an equivalent position to be taken in the underlying security on the ASX.

According to ASIC's investigation, between September 22, 2011 and October 21, 2011, Mr. Watts entered into CFD positions in relation to Smarttrans Holdings Ltd that caused 82 trades of SMA shares on the ASX, which had the effect of creating a false or misleading appearance with respect to the price for trading in SMA shares.

On January 13, 2012, Mr Watts entered into CFD positions for APG that caused one trade of APG shares on the ASX, which had the effect of creating a false or misleading appearance of active trading in APG shares on the ASX.

During his initial court appearance on January 24, Mr. Watts was required to surrender his passport and accept conditional bail until the next hearing which will be at a date which has not yet been set.

In congruence with section 1 of the Corporations Act 2001, if found guilty, Mr. Watts could be subject to a maximum penalty of $495,000, 10 years imprisonment, or both.

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