TheAustralian Securities and Investments Commission(ASIC) has banned a Sydney securities dealer for three years as part of its ongoing investigation into the now defunctHarts Australasia.
The former dealer, Hamish Philip McRae Watson, has been banned from acting as a representative of a dealer, an investment adviser, futures broker or futures adviser, as he did not perform his duties honestly or fairly.
ASIC’s investigation into Watson focused on both illegal trading in Harts shares and his involvement in the acquisition by Harts of Sydney fund manager Cardinal Financial Securities in 2000.
ASIC found that in 2000, Watson used two private companies — Blackshort and Watson Benefit Services — to create the appearance of active trading in Harts shares.
Creating a ‘wash sale’ or ‘matching order’, Watson was effectively both buyer and seller in the same transaction, meaning there was no genuine sale or purchase taking place.
Such tactics are usually designed to create the appearance of actual market activity to induce other people to purchase securities.
ASIC also found that Watson misrepresented to the directors of Cardinal Financial Securities that $5 million invested by Harts in a registered fund managed by Watson had been placed in secure blue chip shares.
Watson is entitled to apply to the Administrative Appeals Tribunal for review of ASIC’s banning order.
