Bell Potter fined over share manipulation

BELL Potter Securities has been fined $145,000 by the operator and owner of the Australian stock exchange for manipulating trading in biotech stock Genetic Technologies. Six buy orders emailed by a client to Bell Potter between September 29 and November 2, 2006 showed that its client had a clear intention to create a false or misleading appearance with respect to the market for, or the price of, Genetic Technologies, the ASX said.

The client's representative also appeared to have motive for providing price support due to other interests held by the related parties, the ASX said.

The broker was fined for contravening market rule 13.4.1 when its adviser entered 29 bids knowing that they were manipulative orders, the ASX said.

"The adviser was privy to and carried out execution of the orders, whilst aware of the order placers intention to provide price support," the ASX said.

Bell Potter was also fined $25,000 by the ASX for failing to maintain sufficiently detailed records showing the time for buy orders in Genetic Technologies and the name of the entity that placed the order, regarding five instructions.

The maximum penalty at the time of the matter was up to $250,000 and now stands at $1 million.

The decision follows proceedings brought by the Australian Securities and Investments Commission (ASIC) in July against Wollongong financial adviser Rocco Musumeci for the same matter.

Mr Musumeci was charged with three counts of market manipulation relating to Genetic Technologies and that matter will be heard in the Melbourne County Court on December 9.

ASIC has banned Mr Musumeci from providing financial services for four years.



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