ASIC fines JP Morgan Securities Australia over gatekeeper failure
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The news: JP Morgan Securities Australia has paid a $775,000 penalty over its failure to block suspicious client orders linked to Eastern Australia wheat futures.
The numbers: The Australian Securities and Investments Commission's (ASIC's) markets disciplinary panel found 36 orders placed by a client between 11 January 2022 and 3 March 2022 had the intention of creating a false or misleading appearance.
The context: Farmers use orders on the futures market to manage wheat price fluctuations, which then trickle down to checkout prices for consumers.
JP Morgan Securities Australia cooperated with ASIC’s investigation and did not contest that it had breached a market integrity rule, the regulator said in a statement.
Manipulation in energy and commodities derivatives markets was an ASIC enforcement priority for 2023.
What they said: "Market participants are the gatekeepers to Australia’s markets, and they need to uphold the highest standards. They have a central role in detecting, preventing and disrupting suspicious trading activity, particularly in periods of volatility as was the case here," ASIC deputy chair Sarah Court said in a media release.
"The markets disciplinary panel's decision emphasises that market participants cannot solely rely on automated trade monitoring systems to detect potential misconduct and must take immediate action once alerted to misconduct by ASIC."
The source: ASIC media release
