DJ Carmichael has paid $300,000 in order to comply with an infringement notice penalty given to it by ASIC’s Markets Disciplinary Panel (MDP).
The MDP found that DJ Carmichael intended to create a “false or misleading appearance with respect to the price” of the listed investment company the LinQ Resources Fund in December 2010.
While the misconduct was localised to the part of the DJ Carmichael designated trading representative (DTR), the MDP noted that the involvement of a junior employee was as a subordinate under instruction from a senior employee of the firm.
The benefit to the DTR was commission to the value of $5,933.55, said the MDP.
“However the potential to derive benefit via goodwill was more significant. This was not viewed favourably by the MDP because it appeared that personal and commercial interests had been favoured over regulatory obligations. Additionally, the detriment to third parties was real and apparent,” said the MDP.
“The DJ Carmichael DTR’s disregard for the market integrity rules and the intentional instruction of junior staff to disregard the same and engage in the perpetuation of the misconduct, was not viewed favourably by the MDP.”
The MDP was also “particularly concerned” by DJ Carmichael’s lack of effective action after being alerted by an ASIC letter on 4 July 2011 about the stockbroker’s trading on the LinQ Resources Fund.
“While the MDP had regard to DJ Carmichael self-reporting the breach to ASIC, it also noted that it was ASIC who alerted DJ Carmichael to the misconduct, and made DJ Carmichael aware of the misconduct,” said the MDP.
DJ Carmichael took steps to prevent further breaches, including: an immediate investigation on becoming aware of ASIC’s concerns on 19 July 2011; a review of its operations considering commercial and compliance issues; introducing procedures including random audits of the compliance team; and ceasing to be a market participant of the ASX on 19 April 2011, instead submitting orders through a third-party service provider.
