Australian Securities Commission v Nomura International PLC [1998] FCA 1570

Australian Securities Commission v Nomura International PLC [1998] FCA 1570

Nomura contravened s 998(1) and s 998(3) of the Corporations Law by engaging in trading strategies that resulted in wash trades (sales to itself with no change of beneficial ownership) and by orchestrating bids and offers to create a false and misleading appearance of trading and depress prices of illiquid...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
10 December 1998
Procedural Posture
Civil / Judgment Following Trial
Outcome
Declarations made that Nomura has contravened the relevant provisions; ASIC to bring in short minutes of order; further relief to be determined after submissions.
Legal Topics
['market Manipulation' 'wash Trades' 'misleading and Deceptive Conduct' 'index Arbitrage' 'futures Contracts' 'stock Exchange Regulation']
['securities Regulation' 'trade Practices'] ['market Manipulation' 'wash Trades' 'misleading and Deceptive Conduct' 'index Arbitrage' 'futures Contracts' 'stock Exchange Regulation']

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Procedural Posture

Civil / Judgment Following Trial

Legal Issues

  1. 1 ['Whether Nomura contravened s 998(1) and s 998(3) of the Corporations Law by engaging in wash trades and market manipulation' 'Whether Nomura contravened s 1260(1)(b) of the Corporations Law by creating a false or misleading appearance with respect to the market for, or the price for, dealings in futures contracts' 'Whether conduct contravened s 995(2) of the Corporations Law and s 52(1) of the Trade Practices Act by being misleading or deceptive or likely to mislead or deceive']

Ratio Decidendi

Nomura contravened s 998(1) and s 998(3) of the Corporations Law by engaging in trading strategies that resulted in wash trades (sales to itself with no change of beneficial ownership) and by orchestrating bids and offers to create a false and misleading appearance of trading and depress prices of illiquid securities at the close. Nomura's intent to lower closing prices for its gain, including through the likelihood and actuality of self-trades, was established. Its conduct was also found to contravene s 1260(1)(b) by intending to affect the settlement price for SPI futures contracts, and contravened s 995(2) and s 52(1) by being misleading or deceptive or likely to mislead or deceive.

Court Disposition

Declarations made that Nomura has contravened the relevant provisions; ASIC to bring in short minutes of order; further relief to be determined after submissions.

Orders

  • ['Applicant to bring in short minutes of order within seven days, in accordance with reasons for judgment.' 'Matter stood over for directions to 18 December 1998 at 9.30 am.']