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Tuesday 17 June 2014

14-131MR New South Wales man jailed for market manipulation

A New South Wales man has been sentenced to two years in jail for market manipulation.

Kristoffer John Watts, a day-trader living in Casuarina, pleaded guilty in April 2014 after being charged with three counts of market manipulation in January 2014.

Mr Watts created a false or misleading appearance in the market when trading in contracts for difference (CFDs) in Austpac Resources NL and Smarttrans Holdings Ltd between 22 September 2011 and 27 March 2012 (refer:14-016MR).

Mr Watts traded the CFDs through a Direct Market Access (DMA) account. Under this DMA model, the CFD issuer hedges its exposure to a client's trading position which results in an equivalent position being taken in the underlying security on the ASX.

Appearing in the Queensland District Court in Brisbane on 16 June 2014, Mr Watts was sentenced to two years in jail, with 21 months of the sentence suspended. Mr Watts will spend three months in jail. In her sentencing remarks, her Honour Judge McGinness said, ‘Those participating in the market have a right to be protected from this sort of market manipulation.’

ASIC Commissioner Cathie Armour said, ‘One of ASIC’s priorities is fair and efficient markets and where misconduct occurs ASIC will take appropriate action.’

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

Last updated: 17/06/2014 12:00