The Australian Securities and Investments Commission (ASIC) has issued a AUS$775,000 penalty to JP Morgan Securities Australia (JPMSAL) following suspicious client orders being placed on the futures market.
Just a few months after the bank was fined US$450 million for providing incomplete data to trade surveillance platforms in the US, an investigation from the Markets Disciplinary Panel (MDP) concluded that JPMSAL should have questioned 36 orders placed by a client between 11 January and 3 March 2022.
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The MDP stated that both individually and as a series the borders suggested that the client intended to manipulate the market by marking the close, creating a false or misleading appearance of the market for, or the price of, Eastern Australia Wheat futures January 2023 (WMF3) contracts
Failing to flag these orders as suspicious was “careless”, the MDP said, adding that JPMSAL’s activity once alerted to the situation by ASIC should have been more expeditious.
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Sarah Court, ASIC deputy chair, said: “Market participants are the gatekeepers to Australia’s markets, and they need to uphold the highest standards. They have a central role in detecting, preventing and disrupting suspicious trading activity, particularly in periods of volatility as was the case here.
“The MDP’s decision emphasises that market participants cannot solely rely on automated trade monitoring systems to detect potential misconduct and must take immediate action once alerted to misconduct by ASIC.”
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