A 31-year-old South Australian man has pleaded guilty in the District Court of South Australia to market manipulation charges under sections 1041A(c) and 1041B(1)(a) of the Corporations Act following an ASIC investigation into his trading in contracts for difference (CFDs) and shares.
Stefan Mark Boitcheff, a day trader living in Virginia, South Australia, pleaded guilty to the following two charges:
- between 3 January 2013 and 28 October 2013, carrying out 117 transactions in CFDs relating to Anteo Diagnostics Limited (ADO) shares which had the effect of creating an artificial price for trading in ADO shares on the ASX; and
- between 8 May 2013 and 7 January 2014, carrying out 4 transactions in CFDs relating to ADO and in the shares of ADO, that had the effect of creating a false or misleading appearance of active trading in ADO shares on the ASX.
The matter was in Court on 25 August 2017 and will return to the District Court in Adelaide on Monday, 16 October 2017 to hear sentencing submissions.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.
Background
The market manipulation offences under sections 1041A and 1041B of the Corporations Acteach carry a maximum penalty of imprisonment for 10 years, or a fine of $765,000, or both.
A CFD is an agreement between an investor and a CFD issuer which allows a trader to speculate on future price movements in a financial product, such as shares. The value of a CFD roughly corresponds to the value of the underlying financial product, in this case, shares on the ASX.
The CFD trading accounts used by Mr Boitcheff operated on a direct market access model, under which the CFD issuer hedged its exposure to a client’s trading position by causing a direct and equivalent position to be taken in the underlying security on the ASX. This hedging mechanism can result in CFD trades having an immediate impact on the underlying shares being traded on the ASX. The CFD issuer's clients are able to see the CFD positions translate to an actual buy or sell order in the underlying shares on the ASX.
Editor's note 1:
On 16 October 2017, the matter was adjourned to 20 November 2017.
Editor's note 2:
On Monday 20 November 2017, in the District Court of South Australia in Adelaide, Mr Boitcheff's plea hearing was adjourned to 5 March 2018.
Editor's note 3:
At the plea hearing on 5 March 2018, the first charge against Mr Boitcheff (under s1041A of the Corporations Act) was amended to:
- Between 3 January 2013 and 16 July 2013, carrying out 112 transactions in CFDs relating to Anteo Diagnostics Limited (ADO) shares, which had the effect of creating an artificial price for trading in ADO shares on the ASX.
The second charge remains unchanged.
The matter has been adjourned to 4 April 2018 for sentence.