PLS Case Study, page-49

Hoots the letter doesnt point out what I have been saying.

The ASX is actually correct that in principle there is nothing wrong with Algorithmic or programmed trading.....

But the problem is that not all algos are created equal or legally for specific markets....therein lies the rub/argument and that should be taken to ASIC on a case by case basis. As we have pointed out.

Our securities laws are unique and what is legal for a global hedge fund to use in the US or HK may not be legal here. This is where ASIC can get a much needed prosecution win and recoup a large fine in this space.

As I have pointed our specific short algo has been operating illegally by not allowing his fake sell orders to be hit by his constant split second re-positioning beyond the market price. An upward cascade buy order has about about 1 in a 100,000 chance of being hit so placing "scary" fake sell orders at 56c when stock is trading 54c achieves its legal effect but when someone buys and hits 56c he makes sure his shares move to end of the queue or disppear completely. This when done repetively (once ok), twice and he is manipulating it down. Plain and simple. 5 years prison to have a think about things and lose his wife accordingly.

This letter would be good if it suggests ASIC should reform so market participants can phone in Algo irregularities or be able to contact a much needed ASIC's algo group where an intelligent ASIC officer can review trading and start the investigation.Trading is a specific area of monitoring skill....but given the number of algos operating, ASIC has fallen behind and needs to come up to speed...literally.

GG