Australia's best finance investigative journalist, Adele Ferguson, has only provided half the story with her article on corona virus related stock market losses.

Many of you are familiar with Adele’s articles. Her stories for the Sydney Morning Herald, Age, Financial Review, Four Corners and 7.30 led to a Royal Commission into the Banking and Financial Services Sector.  

I am sure that many have written to her and told her about the kinds of dishonest ASX practices that are mentioned in this petition.  I know I have many times.

That's why last week when I read her article 'Critical test for market regulators as bots run wild and short sellers smell blood' I was a little surprised by what could be described as ‘a lack of balance’ in the article.

Adele talked about the huge fall in the ASX from Feb 21 to March 21 as a result of the Corona virus.  This included the decimated retirement savings from superannuation.

She interviewed Phil Carden a former Macquarie Executive to get his words on the subject. Then she highlighted the predictions of Goldman Sachs and ANZ.  To top it off she interviewed John Pearce the CEO of UniSuper a super fund that has for years been lending shares to short sellers.

The issue I have is that Macquarie Bank is a part of the problem, along with ANZ and the Super Funds themselves.

Adele failed to mention counter views that address the reality of what is happening. The key issue is the manipulation of share prices that is able to take place.  Instead Adele only interviewed the Big End of Town and accepted what they had to say.  When this sort of fare  is provided by Australia's best financial journalist, it confirms that there is. something deeply wrong with our financial system.

For a start Adele could have gone to Hot Copper, and used ‘advanced search’ to enter the term manipulation.  She would have found many hundreds of people complaining about the ‘bot manipulation’ that is frustrating all retail investors. It warrants a full investigation and that is something she can do very well.

It seems that Adele's only understanding of short selling comes from the lists on shortman.com.au where she has quoted which ASX companies are being shorted the most.  At the moment the short selling rules seem to be designed to ensure settlement can take place, not to ensure the integrity of each trade. When you do the analysis, a lot of the daily trades on the ASX are highly dubious.  

As it stands trades are whizzing back and forth with little accountability until the end of the day when the accounts are settled and reconciliations occur. Trades are netted and it is only the net buying or the net selling that has to be attended to at the close of trading.

Those who know how the current system is abused also know that introducing the blockchain for settlements would clean the market up. All the talk about taxes on high frequency trading and reinstating the uptick rule may help, but if you want to clean up the market, you need to ensure the integrity of each trade. That is where the blockchain has a lot to offer.

Every single transaction would be processed. Sellers would have to actually own shares at the time of a sale.  If it was a short sale, shares would have to be physically borrowed before they could be sold. Then as each sale is transacted, the shares would be immediately transferred to a new owner on the blockchain. Everything would be recorded on the blockchain in real time.

That's a light year leap from what takes place today. Each transaction would be an honourable transaction and there would be an immediate change of ownership. So much for T plus 2. Entities would have to genuinely own shares and have them in their account on the blockchain. If they were buying shares, they would have to have money in their bank account as well.

The market manipulators are very concerned over this. And for good reason. It is interesting that when ASX listed company iSignthis made a deal with the NSX (a competitor to the ASX) to look into using blockchain and create a viable alternative to the ASX. they got suspended.

The reason for the suspension is not convincing. Perhaps the ASX have sent their forensic accountants in and are throwing so much mud at the company, and the chairman, in the hope that something will stick. Would they have an interest in doing that?

If so, then the sooner we move to blockchain then the better. Maybe the ASX and the Big-End-of-Town won’t like it, but they have had things their own way for far too long. The current system is a disgrace. .

Adele, could write a really good expose if she were to thoroughly investigate what is taking place with trading on the share market. Potentially the problems to be exposed are much greater in scope than what the Royal Commission dealt with.

What iSignthis is hoping to achieve on the NSX is an honest system of trading. It would provide a real alternative to the ‘fudge factory’ that has existed for at least the last two decades.