The following is the text of a letter that I received from the General Manager, Financial System and Services Division, The Treasury, Canberra,on the 18th Mach, 2015, concerning representations made for a Parliamentary Enquiry, to investigate the trading of CuDeco (CDU) Limited and Other Companies on the ASX:
"Dear Mr. M.....,
Thank you for your letter of 29 December 2014 to the Assistant Treasurer concerning manipulation in our financial markets. The Assistant Treasurer has asked me to respond to you. I apologise for the delay.
If you are aware of activities which you believe to be market misconduct, I would urge you to refer your concerns to the Australian Securities and Investments Commission(ASIC). ASIC can be contacted via its Client Contact Centre on 1300 300 630. ASIC is an independent statutory authority responsible for the administration of the laws regulating financial services, products and markets. The Minister is specifically precluded from giving ASIC a direction about its policies or priorities in relation to a specific case. One of the reasons that ASIC was established as an independent body was to ensure that its decisions and actions are (and are seen to be) independent of the political process.
Any deliberate attempt to force a security's price to an artificial level is illegal, irrespective of the methods employed. ASIC continuously monitors market activity in real time for suspicious trading patterns that could indicate market misconduct. Where such patterns are observed or if matters are referred to them, ASIC has a broad range of powers of investigation at its disposal. If the activity is determined to constitute market abuse, ASIC is able tp pursue appropriate sanctions.
Reflecting the serious nature of such activity, in 2010 penalties for market manipulation offences were substantially increased for individuals, the penalty is now the greater of $495,000, or three times the profit made or loss avoided. For companies, the penalty is now the greater of $4,950,000, three times the profit made or loss avoided or 10 per cent of the corporation's annual turnover during the period the breach occurred. In addition, offenders may be imprisoned for up to 10 years.
Short selling can play an important role in ensuring that securities are appropriately priced and that our financial markets work efficiently and in the interests of investors and listed entities. Generally, investors enter into short selling transactions when they believe that a particular security is over-valued and likely to decline in price. In doing so, they provide information to the market about the correct price for that security and play a role in preventing asset price bubbles from developing.
Once again, thank you for taking the time to write, and I hope you will find the information useful."
Referred for the information of CDU shareholders concerned.
ASIC have not replied to my request for a re-appraisal of my earlier representations for an investigation into the trading of CDU securities on the ASX on the 18th August, 2010, and the Unsigned Document "F..... S..........." circulated at the time.
cheers,
Max
CDU Price at posting:
$1.41 Sentiment: Buy Disclosure: Held
