media release (18-352MR)

State One Stockbroking to pay $500,000 in connection with failures to comply with market integrity rules

Published 21 November 2018

The Federal Court has ordered State One Stockbroking Limited (State One) to pay penalties totalling $350,000 after the company failed to comply with ASIC’s Market Integrity Rules (MIRs).

The Court found State One contravened the Corporations Act 2001 by failing to comply with two of the ASIC Market Integrity Rules (ASX Market) 2010.

The Court found that State One:

On March 1 and 2 2011, placed 19 bids on behalf of a client, in circumstances where it ought to have reasonably suspected that the client had the intention of creating false or misleading appearance with respect to the market for, or price of, a stock
failed, between 10 February and 9 May 2011, to maintain the necessary organisational and technical resources with respect to post-trade alert systems to ensure that it complied with the MIRs.

State One admitted to the contraventions in a Statement of Agreed Facts.

‘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,’ ASIC Commissioner Cathie Armour said.

State One has also agreed to pay $150,000 to ASIC for its legal and investigative costs in this matter as part of the agreed resolution.

Background

The Markets Disciplinary Panel (MDP) gave an infringement notice to State One on 31 March 2016 for failing to comply with the Market Integrity Rules. State One did not comply with the infringement notice.

Following State One’s failure to comply with the infringement notice ASIC commenced civil penalty proceedings against State One on 21 November 2016 (16-399MR). The hearing of the proceedings commenced on 17 September 2018. At the parties’ request the hearing was adjourned on 18 September 2018, following an agreement to resolve the proceedings.

In 2017, ASIC consolidated the market integrity rules to create a common set of rules for securities markets and a common set of rules for futures markets (17-392MR).