ISX's investigation into share price manipulation (via ASIC & ASX)

In relation to ISX – read this ISX ASX announcement from 1 October 2019
https://www.asx.com.au/asxpdf/20191001/pdf/4492jnjbm9j21n.pdf
- prior to and/or or after reading --- the excerpt below which was presented to a Senate Inquiry in 2013.

I did view the trading data on the day of ISX's 1 October 2019 ANN….SP traded higher for the first hour then sold down (had become a trading sell-down pattern by then).  I watched, recorded trades (volumes – bids/sells) also. ASIC and ASX can view all the trading data for 1 October 2019.  Also they can review/identify the trading data for prior weeks and retrospectively view the results to investigate any connections with brokers, traders and the release of media articles.


Excerpt from a research report which investigated share price manipulation issues in 2013.

1.3.5.2 FURTHER OBSERVATIONS 2: Auction Pricing
A small group of brokers consistently identified as leading participants across all auctions…., have been able to achieve complete control over auction outcomes. The control results from the use of trading algorithms designed to deliver strategic trading agendas rather than dispensing genuine orders for clients. The dominance by the group of brokers certainly identifies with market manipulation rather than genuine trading. Also evident in the behaviour of the group is a tendency to rotate roles as prominent broker from one auction to the next. At times they may be dominant buyers and at other times, they may be dominant sellers or they may even be prominent buyers and sellers within the same auction. Generally, the control over auctions relates back to transactions associated with institutional accounts. The stacking and/or the sudden withdrawal of bids that regularly occur in auctions also identify with attempts to create artificial prices and to control pricing outcomes, so must also be regarded in terms of market manipulation.

1.3.5.3 FURTHER OBSERVATIONS 3: Downticks
Brokers who are consistently dominant as the sellers of Downtick trades reveal trading agendas motivated by control over prices rather than genuine selling. The same group of brokers, who are prominent with Downtick sales, generally happen to be dominant as buyers of Downticks as well on other occasions, which further helps to facilitate downward movements in price.

A clear-cut indicator about broker involvement with setting artificial prices is the proportion of Downticks they have been responsible for on any given day compared to their market share of selling generally. A large proportion of daily Downtick sales achieved with only a small market share of all selling taking place rings warning bells. It means that pressure has been applied to the share price through large numbers of small trades that force lower prices but where the overall volume of such trades is comparatively minor. Broker algorithms are responsible for the trades. The trading appears even more dubious when the tiny parcels of shares used to force Downticks in price are the result of broker crossings emitted by algorithms which is often the case.

Logically, the proportion of Downtick trades caused by a broker selling into the market ought to be similar to their market share of selling generally, especially across long term data. However consistent trends by some brokers where large numbers of Downticks are usually matched by small amounts of selling suggest trading motivated to lower prices rather than to achieve the best returns for clients. It is a critical point as the High Court in a recent judgement has indicated that ‘genuine sellers desire to maximize the returns from sales’. Non-genuine selling is obviously manipulative as highlighted by copious numbers of examples from daily trading. (Refer ASIC Complaints 2013-1 through to 2013-4).

The same applies to where the involvement of brokers as buyers of Downtick trades is markedly different to their market shares as buyers generally. High levels of Downtick purchases compared to their overall buying market profiles, also suggest strong motivations to facilitate lower prices. Being able to buy at lower prices is generally a good outcome for a buyer but the anomalous levels of such purchases by particular brokers run at levels are far beyond good luck or skilful trading. The anomalies suggest collusion.

The reality is that it is trading algorithms that deliver downward pressure on prices through certain brokers forcing Downticks as sellers, and it is algorithms that also facilitate the downward movement by having other brokers accept the Downtick trades as purchasers. The situation is most definitely one of broker algorithms delivering trades from designated sellers to preferred buyers.

As it happens, the brokers responsible for Downticks as both sellers and buyers of Downtick trades, happen to be members of a small group who have emerged as prominent brokers in controlling pricing outcomes and who tend to rotate roles as prominent brokers from one day to the next. The rotation of roles strongly suggests collusion and cartel-like activity as all prominent brokers deal exclusively on behalf of institutions.

1.3.5.4 FURTHER OBSERVATIONS: Selling into Announcements:

Market sentiment can be controlled by ensuring that promising or even strong announcements result in minimal market impact. The brokers responsible for the selling down of announcements are readily identifiable as the brokers who have engaged in forcing Downticks as sellers on days where announcements are released. Such activity, when observed taking place by the same small group of brokers over long periods of time (i.e., 3.5 years), provides empirical evidence regarding attempts to create artificial pricing levels that reflect strategic trading agendas rather than company developments and company fundamentals.

News is meant to be a driver of markets, so that consistently counterintuitive responses by the market to good news are in effect a strong indicator of share price manipulation.


Reiterated here: in relation to ISX - may have more impact after reading the above - this announcement from 1 October 2019 - https://www.asx.com.au/asxpdf/20191001/pdf/4492jnjbm9j21n.pdf

Repeated also - I did view the trading data on that day 1 October 2019….SP higher for the first hour then sold down (had become a sell-down trading pattern by then).  I watched, recorded trades (volumes – bids/sells) also.  ASIC and ASX can view all the trading data for 1 October 2019. Also ASIC/ASX can review/identify the trading data for prior weeks and retrospectively view the results to investigate any connections with brokers, traders and the release of media articles.