Asx Fines Bell Potter
The Age
Saturday September 6, 2008
BROKERAGE Bell Potter has been hit with one of the largest fines handed down by the Australian Securities Exchange, after a former adviser was alleged to have been involved in an attempt deliberately to inflate the share price of a small biotechnology company.
The ASX's Disciplinary Tribunal issued a $145,000 fine to the mid-sized brokerage, after finding former adviser Rocco Musumeci allegedly placed 29 bids for Genetic Technologies on behalf of a client in late 2006 aimed at deliberately manipulating the market.Brokerage ABN Amro Morgans has also been caught up in the affair. One of its former advisers was found to have placed 71 bids on Genetic Technologies aimed at misleading the market. In February ABN Amro was fined a record $175,000 following an ASX investigation.In its latest finding, the ASX Disciplinary Tribunal said it regarded the conduct of Bell Potter and Mr Musumeci as "a very serious contravention of market rules".It found Mr Musumeci was emailed with the buy orders from a representative of a client with the "demonstrated and clear intention to create a false or misleading appearance" with respect to Genetic."The representative of the client also appeared to have a motive for providing price support," the ASX found.As the incident was alleged to have taken place two years ago, Bell Potter has escaped a potentially harsher fine. In March the ASX increased its maximum penalty to $1 million from $250,000 previously.Mr Musumeci, who was based at Bell Potter's Wollongong office, appeared in the Melbourne County Court in July charged with three counts of market manipulation.After the alleged manipulation took place, the 27-year-old was dismissed from Bell Potter.In January, ASIC placed a four-year ban on Mr Musumeci from providing financial services, although that decision remains under appeal.Mr Musumeci is due to appear again in the Melbourne County Court on December 9.
© 2008 The Age