The following complaint was made by a shareholder to ASIC in 2014 with regards to the manipulation of the share price of the company Viralytics. The complain itself, the response from ASIC and a further response from the ASX is given below. This is the typical complaint I have seen to ASIC regarding share price manipulation and it is the typical response. I have seen many of these from frustrated shareholders. I am posting it today as an example so that people know that ASIC and the ASX have received hundreds of these since algorithms began being used to manipulate prices. Indeed it has all been designed for ASIC to ignore problems and for the ASX to defer everything to ASIC.
Tell us what happened. Describe the events in the order they happened. Include dates.
This is the open of VLA , one share being sold at
.25 cents outbidding the sell bidder by more than 10 %
and this happens every day on this stock , us commoners
have to pay brokerage greater than the value of trade
Please explain why this is allowed to Happen. I have been
watching this stock for two months now and , believe
that this stock is being manipulated by someone using
an algorithmic programme . Every morning one share
outbids the other sellers by 10 % or more , it feels as
though that this seller is determined to keep the price
down , where by his mates are picking up shares at aprox
27 to 28 mark , when they influence the sellers to come
out . This stock was oversubscribed at rights issue only a
couple of months ago 28 cents . There is no other logic for
this programme to sell one share at a time . And find it
disgusting that this is allowed to go on . May 2014.
VIRALYTICS LIMITED (ACN 010 657 351) (ASX:VLA) ("VLA")
Thank you for your correspondence of 19 June 2014 in which you reported your concerns about possible manipulation of VLA's share price through algorithmic trading.
ASIC values the information we receive from the public, and reports of misconduct such as yours assist us in working to build confidence in the integrity of the capital markets.
ASIC conducts an assessment of every report of misconduct we receive. The issues you have raised will receive careful consideration, and we have recorded them on our internal intelligence database.
In selecting matters for regulatory action, we consider a range of factors, including whether the misconduct report suggests any breaches of the law we administer, whether we have sufficient grounds to suspect that a breach has occurred, and whether regulatory intervention would benefit the broader community beyond the affected individuals.
Please find enclosed Information Sheet 152 Public comment which sets out the limited circumstances when we will comment publicly on our activities. These limitations are intended to protect the confidentiality of information reported to ASIC and the integrity of ASIC's investigation and enforcement activities. For matters involving our market supervision, we are aware that any public comment may affect trading in the market, and we are committed to a fair, orderly, and transparent market.
Accordingly, ASIC does not comment on operational matters, or our assessment of information in relation to markets matters, and we are unable to provide further details about what, if any, action we may or may not take in relation to the concerns you have raised. We hope you can appreciate the reasons why we do not make such comment.
23 June 2014
If you require any information on our role as a market supervisor, or enforcement action taken by ASIC, please visit ASIC's website at www.asic.gov.au
Please note that ASIC will only contact you again about your report of misconduct if we require further information or evidence to assist in our inquiries.
Yours sincerely
Augoz
Thank you for your email dated 17th of June 2014 regarding alleged market manipulation in VLA.
ASX very much appreciates people who take the time and trouble to bring to its attention potential cases where a broker
in an ASX market or clearing and settlement facility may not be complying with its responsibilities as a broker. It is an
important source of intelligence that helps us to perform our role of monitoring and enforcing compliance with our
Operating Rules.
In this case, however, we regret to advise that ASX is not able to take any action in relation to the matter you have
raised. That matter is regulated by the Market Integrity Rules rather than by ASX’s Operating Rules. These Rules are
administered by the Australian Securities and Investments Commission (“ASIC”) and, if you wish to pursue this matter
further, you will need to do so with ASIC rather than ASX. ASX has no power to investigate or take action in relation to
breaches of the Market Integrity Rules.
If you would like more information about the types of matters that fall within ASX’s jurisdiction and those that fall within
ASIC’s jurisdiction, you can find it on our website at:
http://www.asx.com.au/documents/about/corporations-act-vs-operating-rules-matters.pdf
You can access the ASIC complaint service at:
http://www.asic.gov.au/asic/asic.nsf/byheadline/Complaining+about+companies+or+people?openDocument
Yours sincerely,
Daniel Giovannini,
ASX Participants Compliance Advisor