Australian Day Trader Jailed for Market Manipulation of Shares

The Australian Securities and Investments Commission (ASIC) today announced that a court case against a day trader from South Australia has concluded with a jail sentence. Stefan Mark Boitcheff has been sentenced to one year and nine months in prison after pleading guilty to manipulating the prices of a single stock traded on the Australian Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term (ASX).

The trader used contracts for difference (CFDs) to simulate activity in the shares of Anteo Diagnostics Limited. He executed a series of trades on two occasions to move the price of the stock.

Direct Market Access CFDs

The strategy employed by Boitcheff is typical when a trader is using a relatively small margin with CFDs to move the price of a security thanks to the hedge which the provider of the CFD is putting on the physical market. After the strategy was executed, an artificial price for trading in ADO shares on the ASX was registered.

The trader used the strategy once more between the 8th of May 2013 and the 7th of January 2014, when he carried out 4 transactions in CFDs relating to ADO and in the shares of ADO. The deals resulted in a false or misleading appearance of active trading in the shares of the company.

ASIC Focused on CFD Traders

Commenting on the news, ASIC’s Commissioner, Cathie Armour said: “Any form of market manipulation undermines the integrity of our financial markets and creates an uneven playing field. It is important that markets operate fairly and that people who attempt to deliberately interfere in that process are brought to account.”

In recent years the Australian regulator has been actively monitoring the space for manipulators. Kristoffer John Watts was sentenced in the Brisbane District Court to two years imprisonment, after he pleaded guilty to three charges of market manipulation in June 2014.

In September 2015, Nigel Derek Heath was sentenced in the District Court New South Wales to two years and three months imprisonment. He pleaded guilty to two charges of market manipulation involving trading in shares and CFDs.