ASIC finds adviser breached law
A Sydney based broker employed by Capital & Derivative Management Group (CDM) has been banned from providing financial services for five years by the regulator.
An investigation by the Australian Securities and Investments Commission (ASIC) found that between February 2007 and May 2007, Richard Wardlaw made a number of irregular trades on the Australian Securities Exchange (ASX) intended to mislead other investors.
According to ASIC, Wardlaw facilitated a number of transactions on the ASX on behalf of individual managed account (IMA) holders and other clients of CDM seeking execution only service, including the purchase of instalment warrants in Allco Finance Group, Downer EDI and Western Areas NL.
On six occasions, Wardlaw facilitated crossings in instalment warrants between CDM clients and companies associated with himself and his family. The crossings were done at inflated or depressed non-market prices and moved losses from IMA holders and CDM clients to accounts associated with Wardlaw and his family to hide losses and provide better performance figures for the IMA product.
ASIC found that the trades in warrants at non-market prices had the potential to mislead investors into believing the trading was undertaken at prices determined by forces of genuine supply and demand.
Wardlaw was found to have breached sections 1041C (false trading) and 1041H (misleading and deceptive conduct) of the Corporations Act.
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