Asic takes action over spike in securities by NAB supplier

Source: Asic

ASIC has commenced proceedings in the Federal Court of Australia in Sydney against Whitebox Trading Pty Limited and its sole director and principal, Johannes Boshoff, following an investigation into the spike on 18 October 2012 in the prices of securities comprised in the S&P/ASX 200 Index (Index Securities).

ASIC alleges, among other market misconduct, that it was likely artificial prices for trading Index Securities would be created by order activities of Mr Boshoff and Whitebox on 18 October 2012, as well as on 4 earlier dates in 2012.

ASIC also alleges that false or misleading appearances as to market for Index Securities were created by orders that Mr Boshoff and Whitebox had placed on the ASX but did not intend to trade.

ASIC is seeking:

declarations that Mr Boshoff and Whitebox contravened provisions of the Corporations Act
orders that they pay penalties to the Commonwealth, and
that they be restrained from providing financial services for a defined period.

Whitebox had been contracted to provide index arbitrage trading software and services to National Australia Bank Limited and the relevant order activities were conducted by Whitebox's trading personnel, including Mr Boshoff, while providing those services.

On 23 December 2013, ASIC accepted an enforceable undertaking (EU) from NAB in relation to its responsibility for the alleged market misconduct of Whitebox's trading personnel.

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