Societe Generale Securities Australia has been fined $ 3.88 million by the Market Disciplinary Committee (MDP) following an investigation by the Australian Securities and Exchange Commission (ASIC).
The penalty comes from Soocgen’s failure to prevent suspicious orders in the market for future electricity and wheat fulfillment.
The company has violated market integrity rules, allowing two of its customers to place 33 suspicious orders from May 2023 to February 2024.
This is the fifth ASIC enforcement action in 15 months on the alleged manipulation of electricity and future wheat contracts on the ASX 24 market.
The manipulation of the daily price of electricity settlement and future wheat fulfillment has the potential to affect the cost of financing suppliers and in the order of electricity and wheat prices for consumers.
Each order showed an intention of “marking the closure”, which means they were placed within the last two minutes before the purchase near to affect the daily settlement price for the customer’s benefit.
The orders were placed during a volatile period in the world energy and wheat markets caused by issues of benefits, including Russia-Ukrainian conflict, creating mature conditions for ruthless commercial activity aimed at exploiting and exploiting markets.
The MDP found that Socgen should suspect that all 33 orders were submitted to create false or misleading appearance on the market.
In its decision, the MDP noted that market participants, such as Socgen, must know and be responsible for the orders received by their customers, including orders made through immediate access to the market.
The MDP found that Socgen was reckless, failing to prevent further suspicious orders following recurrent ASIC warnings.
The MDP was also concerned that conditions showed a lack of efficacy of Socgen’s compliance and surveillance functions to detect and treat market manipulation behavior. This included the lack of training, skills and management supervision to adequately monitor the future ASX 24 Electricity and Wheat.
Soocgen is a subsidiary of Societe Generale SA (SGSA), which was classified as the 19th largest bank in the world at the end of December 2023.
In recent years, ASIC has taken action against energy and basic market manipulation. In May 2024, the MDP imposed a fine on JP Morgan Securities Australia Limited $ 775,000 for Gatekeeper market failures in relation to suspicious orders from its client in the market for future ASX24 wheat contracts.
The breach of the market for energy derivatives and basic products was a priority of imposing ASIC in 2023.