State One Stockbroking fined $500,000 for Compliance Failures

The firm was ordered to pay penalties totalling $350,000 for not complying with ASIC’s Market Integrity Rules.

State One Stockbroking Limited, an Australian-based provider of client advisory broking services, has been fined a total of AU$500,000 for failing to comply with the Australian Securities and Investments Commission (ASIC) Market Integrity Rules (MIRs).

This Wednesday ASIC announced that State One Stockbroking has been ordered by the Federal Court to pay penalties totaling $350,000 as the company failed to comply with two of these rules.

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Specifically, the court found that between March 1 and March 2, 2011, the company placed 19 bids on behalf of a client. However, the circumstances of those bids should have given State One Stockbroking the reasonable suspicion that the client was trying to create a false or misleading appearance for a stock or its price.

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Furthermore, from February 10 until May 9, 2011, the firm did not have the necessary organizational and technical resources in place for its post-trade alert systems to ensure that it complied with the MIRs. According to the statement released by ASIC, State One Stockbroking admitted to the contraventions in a “Statement of Agreed Facts.”

State One Stockbroking ignored infringement notice

State One Stockbroking was initially given an infringement notice from the Markets Disciplinary Panel (MDP) on March 31, 2016, for failing to comply with the MIRs. However, the company did not comply with this notice, so ASIC commenced civil penalty proceedings against State One Stockbroking on November 21, 2016.

The following hearing was adjourned on September 18, 2018, after all, parties agreed to resolve the proceedings. As part of this agreement, State One Stockbroking will also pay $150,000 to ASIC to cover the regulators legal and investigative costs.

Cathie Armour the ASIC Commissioner
Cathie Armour
Source: Chief Executive Women

Commenting on the issue, ASIC Commissioner Cathie Armour said: “The Market Integrity Rules are vital to ensuring that Australia’s financial markets are fair and efficient. Market participants are reminded of the importance of their role as gatekeepers to our markets. If they fail to meet their obligations, ASIC will take action.”

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