On September 20th, Interactive Brokers Australia Pty Ltd, a local subsidiary of Interactive Brokers, was fined A $832500 (approximately $538000) by the Australian Securities and Investments Commission (ASIC). The reason for the fine is that Yingtou Securities failed to identify and effectively respond to suspicious trading activities conducted by one of its clients.
The Market Discipline Panel (MDP) of ASIC believes that Yingtou Securities has been negligent in identifying suspicious trading activities. Specifically, Yingtou Securities allows an experienced trader to place an order with the intention of raising the closing price of Orthocell Ltd (OCC), a company listed on the Australian Stock Exchange. During the period from February 10 to October 13, 2021, the client's trading activities triggered 44 "late trading" alerts issued by Yingtou Securities' own monitoring system.
Although ASIC contacted Yingtou Securities on October 14, 2021 regarding suspicious activities of its clients, Yingtou Securities did not submit a suspicious activity report to ASIC until November 5, 2021. The ASIC Market Discipline Team believes that the reason for this delay is that Yingtou Securities lacks employees with sufficient skills and experience to properly evaluate monitoring system alerts. ASIC also pointed out that Yingtou Securities did not provide sufficient supervision to its employees to ensure their due diligence.
In addition, the MDP disciplinary team also believes that Yingtou Securities is reckless in allowing further suspicious transactions despite ASIC's concerns. MDP pointed out that Yingtou Securities failed to maintain the necessary organizational and technical resources to comply with the law.
Earlier this year, ASIC issued two suspension orders to Yingtou Securities Australia, temporarily prohibiting its issuance of Stock Yield Enhancement Program (SYEP) derivatives to retail investors. It is understood that these two bans were issued after ASIC discovered defects between the Target Market Determination Document (TMD) of SYEP derivatives and the Product Disclosure Statement (PDS) of Yingtou Securities.
