Securities: ASIC bans Klusman for three years
Sydney stockbroker, William Frederick (Ric) Klusman, has been banned from providing financial services for three years after an ASIC investigation found that he procured secret profits for relatives when purchasing shares for Regional Express Holdings Limited (Rex) during the airline’s on-market share buy-back.
Klusman, of Lindfield East, New South Wales, was found by ASIC to have made a number of share transactions while employed by Aequs Securities Pty Limited (Aequs) (now known as Anziex Ltd) which had, or were likely to have, the effect of creating an artificial price for trading in a financial product on a financial market. Klusman was also found to have contravened section 1041H of the Corporations Act in making a misleading or deceptive statement about a financial product. At the time, Mr Klusman was employed by Aequs as an authorised representative.
In April 2008, Rex announced its intention to buy back shares on-market and instructed Klusman to purchase shares on its behalf. On a number of occasions between 1 December and 18 December 2008, Mr Klusman entered the market or caused bids and asks on the Australian Securities Exchange (ASX) that resulted in him buying parcels of Rex shares for his relatives and then on-selling those parcels to Rex at a higher price. In doing so, ASIC considered, Klusman had engaged in market manipulation and misleading and deceptive conduct.
ASIC also found that Klusman engaged in misleading and deceptive conduct on 17 September 2008, when he made a statement that he had heard a rumour that Macquarie Group Limited (Macquarie) was going to announce a rights issue. ASIC found that Klusman had no reasonable basis for making this statement.
ASIC’s investigation into Mr Klusman’s trading in Rex shares arose from a referral from the ASX.
Klusman has appealed ASIC’s decision to the Administrative Appeals Tribunal (AAT), which last Friday granted him a conditional stay that allows him to continue to provide financial services for his current employer until the determination of his appeal, subject to conditions covering the placing of his orders onto financial market trading platforms.
Klusman’s application for an order preventing publication of the banning decision by ASIC was not granted by the AAT.
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