The Australian Securities and Investments Commission (ASIC) has imposed a fine of AUD 4.5 million (about USD 3 million) on Openmarkets Australia Limited, which is a retail brokerage firm. The regulator imposed this record-breaking penalty due to various market integrity rule breaches.
Openmarkets Gets Unprecedented Fine from ASIC
The financial market regulator in Australia imposed the fine after an Openmarket’s client conducted suspicious trades . The fine could have been steeper, however, Openmarkets’ willingness to enter into an enforceable undertaking and not dispute the charges led to a reduction.
The Openmarkets client submitted bid and ask orders for the same security at the same prices 2,011 times simultaneously. ASIC stated that Openmarkets should have a system to detect such orders that could potentially manipulate trading prices or give a false impression of active trading.
Interestingly, this same client was previously implicated in suspect trading activities in 2017, leading to an infringement notice for Openmarkets.
According to ASIC, Openmarkets did not maintain satisfactory supervisory measures to ensure adherence to market integrity rules regarding suspicious trading. The regulator further observed, Openmarkets lacked adequate staff possessing the necessary skills, knowledge, and experience to perform effective trade surveillance.
The regulator underscored Openmarkets’ chronic non-compliances and deemed its surveillance systems as extremely inadequate.
The enforceable undertaking now mandates the broker to appoint an independent expert to evaluate and report on trade surveillance, client onboarding, and client money management deficiencies.
Sanctions Imposed on Former Executive
In addition to the company’s financial penalty, ASIC banned Virginia Owczarek, Openmarkets’ former Acting Head of Trading and designated trading representative (DTR), from offering any financial services for a span of three years.
ASIC concluded that “Ms. Owczarek is unsuitable to provide financial services or act as an officer in the financial services industry.” Among other things, ASIC found that “Ms. Owczarek accepted a $2,000 payment from a client for stock advice and engaged in unprofessional exchanges with a client concerning SMARTs alerts.”
