Tribunal: The Hon. Justice D G Thomas, President, and Deputy President J Redfern
Mr Poidevin and Mr Rodr (the applicants) applied for review of a decision from the Australian Securities and Investments Commission (ASIC) to ban them from providing financial services for a period of five and four years respectively (the banning orders).
The core issue in both matters was whether the applicants had contravened a financial services law, which was the basis of ASIC’s decision to issue the banning orders. ASIC alleged that Mr Poidevin had engaged in unlawful market manipulation by creating or maintaining an artificial market share price for DirectMoney Ltd (DirectMoney) and had instructed Mr Rodr to make daily transactions through the Australian Securities Exchange to achieve this outcome. ASIC alleged that Mr Rodr made 90 transactions over the course of nine days and that just under half of those transactions had the sole or dominant purpose of creating or maintaining an artificial market price for DirectMoney shares. ASIC made allegations in respect of six trading days during the period. ASIC further alleged that, due to his past conduct, Mr Rodr will likely contravene a financial services law in the future.
In determining whether the applicants had engaged in market manipulation, the Tribunal noted that each of the transactions alleged to have been impugned by an improper purpose had to be individually examined against the objective evidence and surrounding background and factual circumstances. Such evidence included telephone conversations between the applicants before and after some of the impugned transactions, telephone conversations between Mr Rodr and another manager, transcripts, witness statements and oral evidence, evidence of the transactions as well as evidence from expert witnesses called during the hearing.
Based upon all of the evidence before it, the Tribunal concluded that Mr Poidevin gave instructions to Mr Rodr to maintain the share price of DirectMoney (and therefore engage in market manipulation) and that transactions made on the first and last day of the nine-day period were manipulative. As a result, the power to issue the banning orders in respect of both applicants was enlivened. The Tribunal further found that Mr Rodr’s demonstrated conduct in market manipulation, subsequent denial of market manipulation and a lack of contrition were likely to result in Mr Rodr further contravening a financial services law in the future.
Read the full decision.
Note about confidentiality orders:
The Tribunal published the decision on 20 December 2019 with an interim confidentiality order restricting publication of the decision to the parties to allow them to review the decision and make any submissions about publication. The proceedings were listed for directions on 19 February 2020.
On 17 February 2020, the applicants notified the Tribunal they were withdrawing their applications for review with immediate effect and that, in these circumstances, the decision published to the parties should remain confidential. This was opposed by ASIC.
After hearing the submissions of the parties at a contested hearing, the Tribunal concluded that it had the power to revoke the confidentiality order and that it was in the public interest to do so. An interlocutory decision was published on 9 April 2020.
The applicants requested a stay of the revocation of the confidentiality order pending consideration of an appeal. The applicants did not appeal the interlocutory decision.