Guru Bob,
I have noticed this happening lately also, particularly with HFA, which I held.
My understanding is that brokers will put a massive sell order, say at .66c for 500,000 shares. They 'bot' buy their own shares back in small increments, eating away at the 500,000 shares. When traders get frustrated at the price and volumes going nowhere, they then add their stock to the sell order sitting at .66c and this allows the broker to accumulate more at the price of .66c.
When the 500,000 (plus whatever traders throw in) starts to disappear, the broker puts some more up for sale at that price, so it doesn't allow the SP to go up or down, allowing them to accumulate huge amounts. This process keeps on repeating.
You ask why doesn't the ASX (I'm pretty sure it would be ASIC's role) clamp down on this? I am with you 100% on this. Manipulation of stock is definately not allowed, as we know - but in saying that, in a case such as this, where it goes on heaps, I don't think that ASIC could definately prove that the broker is manipulating the price. Whilst it is fairly obvious to us that they are, technically, all that they are doing is is buying and selling shares using a computer ('bot' system), which is not against trading rules. So I imagine that it would be fairly tough for them to clamp down on this practice.
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