E*Trade cops irregular-trading fine
E*Trade Australia Securities has been fined $101,000 plus GST by the stock exchange for breaches of business rules. Under the heading of “manipulative trading”, the ASX said that in February 2001 the firm executed seven buying orders in E*Trade shares from the same client on seven separate days over an 11-day period.
The exchange said there were circumstances that should have made E*Trade suspect that the orders were placed with the intention of creating a misleading market appearance, including the facts that the orders were small, received close to the 4pm closing time and they caused the closing price of E*Trade to increase. The client was a significant shareholder in E*Trade.
The ASX's National Adjudicatory Tribunal stated that it “believes that the facts associated with the breach … to be an extremely serious matter, which warrants substantial penalty”. E*Trade did not contest the charge.