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Thursday 5 November 2020

20-270MR Former financial advisor convicted and fined $30,000 for dishonest conduct

Mark Damion Kawecki, of Frankston, Victoria, has been convicted and fined $30,000 in the Melbourne County Court for engaging in dishonest conduct related to attempts to artificially satisfy the minimum spread requirement for companies seeking to be admitted to the ASX.

As a result of his conviction, Mr Kawecki is disqualified from managing corporations until 4 November 2025.

Under the ASX Listing Rules, the minimum spread requirement specifies a company must hold a minimum number of unrelated shareholders before its shares can be quoted and traded on the ASX, in order to demonstrate sufficient investor interest and ensure adequate liquidity at the time of listing.

This is the first criminal prosecution for offending of this kind.

Mr Kawecki was charged with, and pleaded guilty to, two counts of dishonest conduct in relation to a financial product in contravention of sections 1041G and 1311(1) of the Corporations Act (20-053MR).

ASIC alleged that between 19 January 2015 and 23 December 2016, Mr Kawecki applied for shares in four companies that were undertaking initial public offerings or were in the process of relisting on the ASX, and that the applications for shares in these companies contained false information about the beneficial holder of those shares or false information about the applicant’s address. The Crown submitted that Mr Kawecki’s conduct was designed to artificially satisfy the minimum spread requirement in the ASX Listing Rules.

The Commonwealth Director of Public Prosecutions prosecuted the matter.

Background

In June 2018, ASIC banned Mr Kawecki from providing financial services for a period of seven years following an ASIC investigation into the conduct (18-185MR).

Mr Kawecki was charged with dishonest conduct on 17 July 2019 (19-209MR). On 04 March 2020, Mr Kawecki pleaded guilty to two counts of dishonest conduct in relation to a financial product (20-053MR).

ASIC reminds market participants of their obligations when acting on behalf of companies seeking admission to the official list of ASX Limited, pursuant to both the ASX Listing Rules and the Corporations Act 2001.

Last updated: 05/11/2020 02:33