6.5 CuDeco Registry Anomalies 5

1
CUDECO SHAREHOLDER RESEARCH

CHAPTER 6: REGISTRY ANOMALIES

6.5 THE IMPACT OF INSTITUTIONAL TRADING ON THE
CUDECO REGISTER

DISCLAIMER: All Information presented as shareholder research has been sourced from
broker trading records and Cudeco registry records. While the author considers the data
to be accurate and the summaries presented as also being an accurate reflection of
trading, no guarantees are given as to the reliability of data or any conclusions put
forward. Shareholders and investors are encouraged to do their own Due Diligence and to
make up their own minds in regard to any trends present in the trading data.
2

REFERENCE LINKS TO PREVIOUS RESEARCH PAPERS

Chapter 1: Introduction
1.1 Why Blog?
1.2 The Current Situation
1.3 Blog Content
Chapter 2: An Overview of Trends Associated With 15 Months of Trading
2.1 Introduction
2.2 Trading Trends Over a 15 Month Period
Chapter 3: Trading Trends Leading up to Aug 18, 2010
3.1 Trading Leading Up to the Aug 18 Resource Upgrade
3.2 An Analysis of Price Under-Performance During Jan-Feb 2010
3.3 Market Manipulation Issues, 7.5 Months of Auction Investigations and Down Tick Analysis
3.4 A Review of June/July 2006 JORC Issues
3.5 Market Reactions to Significant Announcements 2010
3.6 The 2010 Resource Estimate and Issues Related to JORC Code Compliance
Chapter 4: Trading that Occurred Following the Aug 18, 2010 Resource Upgrade
4.1 Historic Trends and Aug 18, 2010 Trading Data
Chapter 5: Trading Updates
5.1 Short Position Update - Nov 1, 2011
5.2 Registry Update as at Nov 3, 2011
5.3 Market Update Nov 14
5.4 Summary of Issues Plus Trading Anomalies During November 2011 and in a Broader Context
Chapter 6: Registry Anomalies
6.1 An Overview of Monthly Registry Anomalies Spanning 2 Years of Trading
6.2 Increased Registry Activity Versus ASX Buying and Selling
6.3 Trading Featuring Substantially Increased Registry Activity Over ASX Activity - Part 2
6.4 Trading Featuring Substantially Increased ASX Activity Over Registry Activity.

3

EXECUTIVE SUMMARY
Issues that have emerged in 2.5 years of trading in CuDeco Limited concerning the impact that institutional
shareholders have had in the market and on the register are summarized below. Further concerns will be
brought to notice in forthcoming blogs.

a. Cartel Concerns:
The trading of sophisticated institutional investors over a two and a half year period has the hallmarks of a
cartel controlling all aspects of trading. The monopoly over trading has resulted in trading statistics such as:
5 Institutional shareholders accounting for :
o 70% of all registry movements over 2.5 years, and;
o 85% of all registry activity over the first 6 months of 2012.
2 institutional shareholders in their own right accounting for:
o 50% of all registry activity over 2.5 years and;
o 70% of all registry activity over the first 6 months of 2012.
Institutional dealings are characterized by high levels of churn with shares being passed back and forth
between each other resulting in extraordinary registry share flows such as:

The symmetry of share flows and the ease by which large volumes of selling and buying have been
accommodated by the market are difficult to reconcile with genuine trading and suggest that the market
has been dominated by fund managers pursuing suspicious investment objectives.
Note: Registry activity includes trades that have occurred on the ASX and subsequently settled, but it also
includes trades that have occurred away from the ASX such as through Dark Pools.

b. Transparency Concerns:
The system of trading and settlements, while purportedly fair and transparent has resulted in only 27.6% of
the buying and selling by brokers over 2.5 years being able to be reconciled on the register against the
shareholders they have acted for. Trades that do reconcile are generally associated with retail investors.
.

c. Increasing levels of institutional ownership coinciding with aberrant trading trends:
Accompanying the dominance over trading by institutions, concerning irregularities between broker
activity and registry activity and a flat and unresponsive share price, there has been an increase in
ownership by the 5 institutional investors of 51.4 million shares. Combined institutional ownership has
increased from 19% of the register in January 2010 to 38% of the register at the end of June 2012.

2.5 Years of Broker Trading in terms of the Register
Opaque Dealings
Transparent
72.4 %
27.6 %
Representing around 408.9 million
buys & sells in the market

The lack of transparency is because most trades are
executed in the market by brokers and then
forwarded to other agents for settlement and
mainly in favour of institutions. The links between
client and broker are completely obscured in the
process.
Many of the trades also represent wash trades that
dont even make it to the register.
Institutional Entity OFF ON NET
Citicorp Nominees 124,057,631 123,164,692 -892,939
National Nominees 99,615,532 99,639,309 23,777

4

d. Aberrant trading trends:
Research has investigated whether registry anomalies (i.e.; large fluctuations between the volumes of
buying & selling and the volumes of share flows that have occurred on the register) are a pointer to
unorthodox and possibly manipulative trading behaviours. Trading over the 2.5 years reviewed has
demonstrated consistently high levels of anomalism that has fluctuated between periods of Wash Trades
and periods of Dark Trades about which virtually nothing is known.

In the table below, variances between registry share flows and ASX volumes have been compared to both ASX
volumes and to registry volumes. Periods where Wash Trades and Dark Trades have dominated are shaded. It
also needs to be kept in mind that variances for normal trading would be expected to be close to zero.

Dark Trades regarding CuDeco are running at levels that are multiples of the levels already creating
concerns for the ASX and for the market regulator.

(The ratios in the table indicate the number of registry share flows that have corresponded to a trade of
100 shares on the ASX. Normally, a trade of 100 shares should correspond to registry flows of 100 shares).

e. Control over pricing movements:
A relatively small group of affiliated brokers have been responsible for most of the falls in price that have
occurred and they have used parcels of shares considerably smaller in size than the average sized parcel
across all trading. Research data suggests that the mechanism for price falls is programmed into algorithms
which seem to recognize gaps between BIDs and ASKs when they appear and then take prices lower with
either a cross trade or with a trade that goes through at a lower ASK price. Strangely, the mechanism for
control over price falls has resulted in only 5% of all downward movements in price occurring at the buyers
BID price. Implicit in the control over prices is the ability for algorithms to somehow recognize the quotes
of affiliated brokers and to ensure that a trading partner is able to receive each Down Tick.
f. Dominant trading
The institutional influence over trading is spread far and wide but it also manifests through particular
brokers having more prominent roles, through groups of brokers having prominent roles and through retail
brokers camouflaging large volumes of institutional orders amongst those of retail clients. Most of the
control emerges through trading algorithms tuned to generate particular trading volumes and somehow
designed to interact with the brokers who are all servicing institutional buying and selling instructions.
In particular, the trading data associated with broker UBS Securities raises several concerns. With a market
share of only 5.5% of all trading volumes, it has consistently been the largest net seller of shares in over 2.5
years of trading. UBS has also been responsible for a mammoth 27% of all settlement activity which
demonstrates the wide ranging involvement it has with the trading of other brokers, and it has conducted
the largest number of crossings (XT trades) and the largest number of transactions both by very wide
margins. UBSs role in downward price movements is indicated for example by a market share of 24% of all
Down Ticks that have occurred during the 1
st
half of 2012..

Total Dark Trades: 116.9 mill sells, 119.5 mill buys Total Wash Trades: 87.1 mill sells, 89.1 mill buys

General:
Trading data suggests that anomalous trends are the result of institutional fund managers colluding with
their trading and spreading their influence across a wide network of brokers. Assisting them in their
endeavours have been HFT algorithmic trading programs (in controlling price movements and auction
results), manipulative short selling, illegal Wash Trades, Dark Pool share exchanges and a grossly non-
transparent trading and settlement environment. In so doing they take on the apparance of a cartel that is
monopolizing all aspects of trading and severely compromising the markets role in fair price discovery.

Pre JORC JORC Post JORC
Comparison
Jan to May
2010
Jun & Jul
2010
Aug 2010
Sept
2010
Oct & Nov
2010
Dec 2010 to
Dec 2011
Jan to Jun
2012
To Registry Volumes 29% 45% 119% 41% 45% 35% 51%
To ASX Volumes 22% 81% 54% 70% 31% 48% 103%
Ratio 100:78 100:181 100:46 100:170 100:69 100:154 100:203

Extremely anomalous
5

CHARTS SHOWING AN INCREASING INSTITUTIONAL PRESENCE ON THE REGISTER AND A DOMINANCE OVER TRADING

Top 20 - Institutions
Top 20 - Other Holders
Balance of Register
Registry Breakdown 2006

1,2, & 3
Citicorp
National
HSBC
Non Institutions
ANZ
JP Morgan
DOMINANCE OVER TRADING BY CuDECOs INSTITUTIONAL SHAREHOLDERS

Combined Institutional
Holdings as at Jan 1, 2010
20,445,838 shares
(14.8% Ownership)

Holdings as at Jun 30, 2012
71,698,305 shares
(38.3% Ownership)
Jan 2010 Jun 2012
Placements + 39.2 M
Trading + 12.2 M
Accumulation
INCREASING LEVELS OF INSTITITIONAL OWNERSHIP OVER THE REGISTER

Institutions
Citicorp
National
HSBC
1,2, & 3
JP Morgan
30 Months Trading
2012 - 6 Months Trading

Top 20 Institutions
New Apex Asia
Balance of Register
Total Registry Movements
OFF ON
438,800,819 439,011,283

OFF ON
67,874,628 68,022,177

Registry Activity Summary
30 Months 6 Months (2012)
1. Retail 21.8% 9.7%
2. Corporate 7.0% 2.1%
3. CuDeco 1.6% 2.8%
4. Institutions 69.6% 85.3%

KEY
6

CONTENTS

Section 1 ........... Pg. 7
AN OVERVIEW OF THE WORLDS FINANCIAL SYSTEM

Section 2 Pg.10
THE OWNERSHIP OF THE ASX, AUSTRALIAN FINANCIAL MEDIA AND PUBLIC SHARE FORUMS

Section 3 ............. Pg. 16
THE INCREASING INSTITUTIONAL PRESENCE ON THE CUDECO SHARE REGISTER

Section 4 ........ Pg. 21
A SUMMARY OF 30 MONTHS OF BROKER ACTIVITY

Section 5 ........ Pg. 43
INSTITUTIONAL REGISTRY ACTIVITY FROM JANUARY 2010 to JUNE 2012

Appendices .... Pg. 60

Appendix 1: TOP 20 SHAREHOLDER LISTS FROM 2006 to 2011 Pg. 61
Appendix 2: BROKER TRADING SUMMARY: JAN 2010 TO JUNE 2012 Pg. 63
Appendix 3: BROKER and REGISTRY SUMMARIES JAN 2010 TO JUNE 2012 Pg. 65
Appendix 4: INSTITUTIONAL REGISTRY SUMMARIES: JAN 2010 TO JUNE 2012 Pg. 67
Appendix 5: ASX PARTICIPANT CODES Pg. 69
Appendix 6: LEADING RETAIL BROKERS - MONTHLY TRADING STATISTICS Pg. 72

7

Section 1

BACKGROUND INFORMATION:
An Overview of the Worlds Financial System

8

6.5.1.1 A PERSPECTIVE ON THE STRUCTURE OF WORLD FINANCE
Observing how the world financial system is structured helps to put into perspective the trading taking
place in the markets and in particular, the trading associated with CuDeco.
After the Global Financial Crisis in 2008 a science based organization that publishes the web ezine New
Scientist Online conducted extensive research into the structure of world finances. Information about the
organization may be summarized as:
New Scientist magazine was launched in 1956 for all those men and women who are interested in scientific
discovery, and in its industrial, commercial and social consequences. It explores and interprets the results of
human endeavour set in the context of society and culture. New Scientist explains why a development is
significant as well as putting social and cultural context around it, delivering more insight than any other
current affairs or science source.
The research was prompted by the precarious state of affairs in regard to global finances triggered by the
collapse of Lehman Brothers. The collapse was related to an extreme over exposure to sub-prime
mortgages by Lehman which had immediate ramifications across the worlds financial system. The research
by the New Scientist organization demonstrated the strong relationships between the worlds most
powerful economic entities through joint ownership of assets, strategic alliances and joint dealings across a
range of financial products. Importantly it showed how problems can quickly manifest globally when a
major financial catastrophe occurs because of the chain of connectedness between these powerful
entities.
The full article is available on the internet <link>, however the main findings are summarized below.
6.5.1.2 TITLE of ARTICLE: The Capitalist Network That Runs The World:
An analysis of the relationships between 43,000 transnational corporations has identified a
relatively small group of companies, mainly banks, with disproportionate power over the global
economy.
The reality based study combined the mathematics long used to model natural systems with
comprehensive corporate data to map ownership among the world's transnational corporations
(TNCs).
Previous studies have found that a few TNCs own large chunks of the world's economy, but they
included only a limited number of companies and omitted indirect ownerships, so could not say
how this affected the global economy - whether it made it more or less stable, for instance.
The study was based on a database listing 37 million companies and investors worldwide, where
43,060 TNCs and the share ownerships linking them were assessed. A model was constructed to
map the structure of economic power by establishing which companies controlled others through
shareholding networks and where each company's operating revenues were directed to.
A core of 1318 companies with interlocking ownerships each had ties to two or more other
companies, and on average they were connected to 20. What's more, although they represented 20
per cent of global operating revenues, the 1318 appeared to collectively own through their shares
the majority of the world's large blue chip and manufacturing firms - the "real" economy -
representing a further 60 per cent of global revenues.
Cross holdings associated with most of the 1318 companies tracked back to a "super-entity" of 147
even more tightly knit companies - all of their ownership was held by other members of the super-
entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per
cent of the companies were able to control 40 per cent of the entire network"
9

The top 50 of the 147 super connected companies are summarized below. The highlighted entities
have connections to the trading taking place with CuDeco according to the following:
o They may be represented as a nominee entity sitting in an institutional account (green font)
that is listed as a CDU shareholder, or;
o They may be a broker affiliate of the leading world company that is heavily involved in the
trading of Cudeco shares (red font).
1. Barclays plc

18. Goldman Sachs Group Inc

36. Standard Life plc
2. Capital Group Companies Inc

19. T Rowe Price Group Inc

37. CNCE
3. FMR Corporation

20. Legg Mason Inc

38. Nomura Holdings Inc
4. AXA

21. Morgan Stanley

39. The Depository Trust Company
5. State Street Corporation

22. Mitsubishi UFJ Financial Grp

40. Massachusetts Mutual Life Insurance
6. JP Morgan Chase & Co

23. Northern Trust Corporation

41. ING Groep NV
7. Legal & General Group plc

24. Socit Gnrale

42. Brandes Investment Partners LP
8. Vanguard Group Inc

25. Bank of America Corporation

43. Unicredito Italiano SPA
9. UBS AG

26. Lloyds TSB Group plc

44. Deposit Insurance Corp of Japan
10. Merrill Lynch & Co Inc

27. Invesco plc

45. Vereniging Aegon
11. Wellington Management Co

28. Allianz SE 29. TIAA

46. BNP Paribas (refer Nominees)
12. Deutsche Bank AG

30. Old Mutual Public Limited Co

47. Affiliated Managers Group Inc
13. Franklin Resources Inc

31. Aviva plc

48. Resona Holdings Inc
14. Credit Suisse Group

32. Schroders plc

49. Capital Group International Inc
15. Walton Enterprises LLC

33. Dodge & Cox

50. China Petrochemical Group Company
16. Bank of New York Mellon Corp

34. Lehman Brothers Holdings Inc*

17. Natixis

35. Sun Life Financial Inc

6.5.1.3 COMMENTS
It is of interest that the Vanguard Group is rated as the No 8 world rated company and is also part of the
M&G Group of Companies. M&G are a major CuDeco shareholder. The connectedness of institutional
trading regarding CuDeco takes on a whole new look when viewed from the findings of the New Scientist
Group.
Vanguards large investment as part of the group that has captured a major stake in the company and that
continues to seek increased exposure through placements and through on-market buying looks to be a
particularly significant development.
Serious questions are raised by the simultaneous occurrence of:
The active involvement of companies that are leaders in terms of global economics in CuDeco
trading;
The involvement of brokers who also figure prominently in a global context in trading CuDeco
shares;
The anomalous trends evident in long term trading data for CuDeco; and
The negative press coverage regarding Rocklands and CuDeco in contrast to the company reporting
strong progress on all fronts as it fast tracks development.

CuDecos institutional shareholders in representing sophisticated investors help to explain the ready
accessibility to Dark Pools to conveniently re-arrange portfolios whenever required and for whatever
reason as well as the strong levels of co-ordination, co-operation and facilitation that appears to have
taken place in support of each others trading agendas.

The situation resonates more closely with the corporate targeting of CuDeco rather than genuine buying
and genuine selling between investors acting ethically, fairly and transparently at all times.
10

Section 2

FURTHER BACKGROUND INFORMATION
The Ownership of the ASX, Australian Financial Media and
Public Share Forums

11

6.5.2.1 THE ASX: Top 20 Shareholders 2012
The Top 20 shareholders of the ASX as at August 1, 2012 are listed in the table (as taken from the 2012
Annual Report). Attention has been drawn to the entities who have also been actively involved with
trading CuDeco shares ( ) and to those who have been involved with Cudeco but in a minor way. ( )
In a sense the involvements are not surprising as CuDeco is listed as an ASX200 company and there is
interconnectedness between major financial entities throughout the financial system.

6.5.2.2 CUDECO: Top 20 Shareholders
For comparison purposes the Top 20 CuDeco shareholders as per the 2012 Annual are also listed.

JP Morgan trades as
two distinct entities:
J P Morgan Nominees
and
JP Morgan Nominees
Leading trading
entities
12

6.5.2.3.1 MEDIA OWNERSHIP IN AUSTRALIA
Media ownership in Australia is distributed between commercial, national public broadcasters and not-for-
profit community broadcasters. Australian media ownership has been described as one of the most
concentrated in the world. For example, 11 of the 12 capital city daily papers are owned by either Rupert
Murdoch's News Corporation (accounting for around 70% of daily newspaper circulations) or by John
Fairfax Holdings.
The duopoly over media control shows up in the leading newspapers by circulation which according to
Wikipedia are as follows:

The leading newspapers owned by Fairfax are, The Sydney Morning Herald, The Age, The Australian
Financial Review (AFR) and The Herald.
News Limited control the rest led by The Herald Sun, The Daily Telegraph, The Courier Mail, The Advertiser,
The Australian and the Gold Coast Bulletin.

6.5.2.3.2 OWNERSHIP OF NEWS LIMITED
Until the formation of the News Corporation Ltd. in 1979, News Limited was the principal holding company
for the business interests of Rupert Murdoch and his family. Since then, News Limited has been wholly
owned by News Corp. In 2004, News Corp Limited announced its intention to reincorporate to the United
States. On 3 November News Corp Limited ceased trading on the Australian Stock Exchange; and on 8
November, News Corporation began trading on the New York Stock Exchange.
TOP 20 HOLDERS Shares
Cede & Co 530,801,809
Chess Depositary Nominees 265,787,594
Private Holders - 18 in number 1,329,825
Totals 797,919,228

Newspaper City State/Territory Circulation Owner
Cede & Co.
Nominee name for The Depository Trust Company, a large
clearing house that holds shares in its name for banks,
brokers and institutions in order to expedite the sale and
transfer of stock.

The control exercised by Murdoch in areas associated with his financial interests including politics, national
policy (e.g. the war in Iraq), climate change, the environment and commerce are well enunciated in an article
by Robert Manne of the SMH, a Fairfax publication. The point is that all media has the ability to influence
public opinion in all areas including the financial markets.
As mentioned previously, CuDeco has generally received limited favourable press coverage which has been
inconsistent with reported progress made by the company.
13

6.5.2.3.3 THE OWNERSHIP OF FAIRFAX: (Reference: the 2012 Annual Report)
The Top 20 shareholders of Fairfax are listed below again with the entities who are prominent in trading
Cudeco highlighted ( ) and those that have also been involved but to a lesser extent also highlighted ( ).

6.5.2.3.4 MEDIA COVERAGE of CuDECO
It is fair to say that all daily newspapers with the exception of the Gold Coast Bulletin have been particularly
harsh in their coverage of CuDeco preferring to focus on perceived management shortfalls and the
disappointment surrounding the companys JORC compliant resource. There has been no critical analysis of
the issues surrounding the unreliability of JORC estimates when it comes to resources exhibiting strong
nugget effects, and no coverage of the importance of bulk mining trials in being able to more accurately
estimate likely mining grades for such resources. Nor has there been any research done on why the company
has ordered equipment for a processing plant designed to mine ore at grades markedly higher than JORC
estimates or why its EIS submissions to the QLD Government and submissions to the Townsville port
authority stipulate production levels greatly in excess of what could be achieved from JORC estimates given
the volume of ore throughput planned. There has been no commentary about the company consistently
being able to achieve premium placement deals when raising finance or the success of its share Buy Back
programs that have been implemented to take advantage of an undervalued share price.
Nor has there been any coverage of note concerning the many achievements made by the company in
advancing its discovery at Rocklands towards what will be a significant new mining enterprise for QLD.

Newsworthy achievements that for the most part have been ignored by media include:
The granting of a 30 year mining license by the QLD Government dispelling any notion of a marginal
mining operation at Rocklands;
Major investors being prepared to pay premiums to gain exposure to Rocklands;
The plans for mining being based on mining trials not the JORC based 1.7% Cu equivalent grade,
with grades in the first years expected to be considerably higher than JORC estimates;
The fact that an open cut mine at Rocklands will have a low strip ratio with mineralization accessible
from the surface and looks like being commissioned substantially debt free;
The securing of rail and port infrastructure and the outright ownership of its mining fleet;
New copper discoveries that will add to the high grade component of the resource;
A separate rare earth, precious metals discovery at Wilgar likely to form a second mining operation
to its flagship measured and indicated deposit known as Las Minerale;
The recent go ahead by the QLD Government to develop its highly promising uranium prospects first
brought to prominence by the high grade uranium found by CRA back in the 60s.

14

6.5.2.3.5 INSTITUTIONAL TRADING:
The ownership structure of Fairfax, the ASX and indeed CuDeco show the similar levels of institutional
control that encompass all major public companies including those who are members of the ASX200 index.
However it is with the nominees listed in the institutional omnibus accounts where the true ownership is
found. The unifying of holdings through institutional guardianship often with a mandate for institutional
fund managers to use shares under management for income generation delivers enormous financial
resources to institutions that can be used to great effect in the market.
The extensive involvement of institutions in both short selling and stock lending is a case in point
particularly when equivalent securities are used to satisfy loan obligations. In such instances, and the
practice looks to be widespread, shorting can take place on-market with immediate price discovery
resulting in lower prices, yet exposed position can be managed indefinitely off-market due to the extensive
resources and wide ranging flexibility available to institutional fund managers.
Individual institutions are powerful trading entities in their own right, but when they trade in unison as
appears to be the case with CuDeco with constant exchanges of shares back and forth both on-market and
off-market, and when they provide ready access to each others holdings via stock lending to facilitate
short sales (albeit for a fee paid for by funds under management), collusion represents an extremely
formidable force that is capable of completely monopolizing the market in a stock. There is also the
question of why institutions even need to access each others holdings when they usually have shares in
their own right that they can sell in the market and then re-purchase if they consider a stock over-valued.
Furthermore the trading activities of institutions as revealed in the case of CuDeco are likely to be spread
across the ASX with serious ramifications for the integrity of the entire system. Also of concern is that
super funds which represent the wellspring of cash flowing into the system may be subsidizing the trading
objectives of fund managers regardless of whether profits or losses materialize for clients. The trend over
2.5 years with CuDeco has been for churn based trading in a zero sum game environment, so that
institutions are presumably taking turns at profiting from each other. It is an odd situation but it is
supported by trading data. Institutional management fees of course are likely to be independent of any
profits or losses generated.
The trading data that follows draws attention to what may be motivating institutions with their trading.
Possible motivations might include:
Trading for genuine profits with profits delivered by retail investors and each other;
Trading to earn commissions irrespective of the trades being profitable or not;
Trading to bleed profits from each through stock lending & shorting, where costs are paid for by
the funds being managed;
Trading in pursuit of agendas such as the purposeful suppression of share prices.
The lower prices resulting from share price suppression may enable sophisticated investors to acquire large
volumes of shares through placements from the company that may not otherwise be available directly
from the market.
Whatever has prompted the unusual trading behaviours adopted by institutions, the one constant over a
period of two and a half years, is the significant increase in institutional ownership over the company.
Certainly a dysfunctional share price and public confusion surrounding Rocklands hasnt stopped
sophisticated investors from increasing their stakes in the company both on and off-market.

It is also worth noting that substantial losses in portfolio values often accompany stock lending activity
despite the fees earned through the lending of stock it suggests other motives in facilitating short selling.

15

6.5.2.4.1 PUBLIC FORUMS:
Share discussions on public forums came into vogue with the advent of share trading through the internet
in the mid to late 90s. While promoting the free exchange of information between members they have
also proved hazardous because of the misinformation also spread by vested interests, and the difficulty in
controlling the accuracy of what is volunteered.

TheBull.com.au, a media company run and owned by long-standing finance journalists with no ties to any
financial services company or Association summed up the activities of public forums in an informative
article titled:

THE MYSTERIOUS WORLD OF STOCK FORUMS
Death threats, politics, allegations of insider trading...it's all happening on stock forums.

6.5.2.4.2 There are several share forums of somewhat obscure ownership including:
HOT COPPER;
TOP STOCKS;
AUSSIE STOCK FORUMS, and;
SHARESCENE.

The HotCopper website is operated by Report Card Pty Ltd (ACN 092 598 859) although according to an
article by Age journalist Mark Hawthorne published in Jan 2009, ownership of Hot Copper was linked to
broker Adam Rankine-Wilson (now deceased).
Interestingly, Rankine-Wilson happened to be associated with Azure Capital the firm who has been
assisting CuDeco with fund raising since early 2009.
LINK: http://www.theage.com.au/business/canadian-rules-make-coal-a-cheap-export-asset-20090115-
7i0r.html?page=2

1. Invest by listening to stock tips on forums, newspapers and magazines is a sure way to financial ruins.
Everything you read has to be taken with a pinch of salt.
2. Build up your investment analytical skills - in both fundamental and technical analysis FIRST.
3. Use forums intelligently. Ask questions. There is no such thing as stupid question. Only the stupid chooses to
be stupid by NOT asking questions.
4. Some free things (like free tips) actually cost a lot in the end. You need to spend money to get educated first
- through books or courses.
As a member of a forum, you can play a part in increasing the level of accountability of stock forums by posing
the following questions:
- Does your investor forum accept script (shares in a company) in payment for stock promotion or advertising?
- Do any of the owners of your forum run or work for a stock brokerage or financial advisory firm?
- What is your policy on people registering more than one account and what technology and processes do you
have in place to prevent this means of manipulating the share market?
Excerpt 2: Re: Tips for subscribers to public
forums
..the pitfalls with investor forums are that beginners frequently fall into the trap of blindly following
stock tips, often to their financial demise, that moderation of content is sometimes compromised for
the sake of maximising advertising dollars and that moderators abuse their role to further their own
interests, such as censoring posts that do not concur with their own investment view.
Excerpt 1
16

Section 3

THE INCREASING INSTITUTIONAL PRESENCE ON THE
CUDECO SHARE REGISTER

17

6.5.3.1 INTRODUCTION
There have generally been widely disparate views between public perceptions of the company following its
initial discovery at Rocklands back in late 2005 early 2006 and the actions of sophisticated investors in the
market. The stock has been surrounded by controversy and conjecture following intervention by the ASX in
June 2006 in forcing a downgrade of the companys initial inferred resource (Refer Research Paper 3.4)
which was magnified many times over because of further JORC based issues surrounding a resource
upgrade in August 2010 (Refer Research Paper 3.6). Trading has seen the markets most influential brokers
pay a lot of attention to the stock for over 6 years despite the public confusion, and in recent years
sophisticated investors have secured substantial levels of increased ownership over the company.
It is fair to say that while there may have been some assumptions in the companys June 2006 Inferred
JORC statement that were subsequently proven incorrect by follow up exploration, (e.g.; assumptions
about continuity of grades in extrapolating the resource along strike and at depth, and assumptions about
specific gravity values assumed for the bulk of the resource). However the companys estimates regarding
the amount of copper at Rocklands were remarkably accurate. Subsequent events have proven that the
company was much closer to the mark with its knowledge about the resource than the ASXs advisers who
were instrumental in forcing a resource downgrade, yet enormous damage was inflicted on the company
and its shareholders by what now looks to be an embarrassing and unnecessary intervention.
It would appear that sophisticated investors were not side tracked by the ASXs intervention back in 2006
and nor were they side tracked by the confusion surrounding a subsequent resource statement announced
to the market in Aug 2010. Clearly the difficulty in being able to accurately estimate resources for unique
ore bodies such as Rocklands that are subject to pronounced nugget effects led to investors being
misinformed and confused. The result was a resource with grade estimates that are likely to be exceeded
by actual mining as suggested by extensive bulk mining trials that have been undertaken. It is an ironic
situation as the intention of the ASX JORC code is meant to more reliably inform investors about mineral
resources yet it would appear that the exact opposite has occurred.
The revelations provided by trading behaviours in the market and the increasing institutional ownership
over the company possibly describe the merits of the Rockland resource far more reliably than a
potentially flawed compulsory JORC code ever could. Trading data very much suggests that sophisticated
investors have seized upon the resource confusion and a likely undervaluation of the Rocklands resource
resulting from JORC compliance, and have used the situation to their advantage.
The trading behaviours adopted by sophisticated investors have been largely responsible for:
Destabilizing the market at critical times;
Controlling price movements over a very long period of time;
Elevating the confusion surrounding the stock particularly when the share price has been prevented
from responding to good news in the way that is expected from significant market developments;
Maintaining an undervalued share price possibly to facilitate opportunistic placements and by
default, increased ownership over the company.
Trading outcomes such as the above have had the effect of magnifying uncertainty and has led to retail
investors being confused and in some cases panicked out of their holdings.
18

6.5.3.2 INSTITUTIONAL OWNERSHIP OCTOBER 2012
The Top 20 shareholders listed below account for 69.1% of the company as at Oct 5, 2012. The figure
compares to 41.6% for the corresponding 2009 Annual statement. Research has documented trading from
the beginning of Jan 2010 coinciding with the ownerhip by sophisticated investors increasing by 27.5%.
A listing of Top 20 shareholders from 2006 to 2011 is included as Appendix 1.

6.5.3.3 SUMMARY OF CHANGES TO INSTITUTIONAL OWNERSHIP
ENTITY 2006 2007 2008 2009 2010 2011 2012
J P MORGAN NOMINEES - - 881,979 2,600,213 12,823,760 20,394,849 46,236,976
HSBC NOMINEES - 2,279,511 15,007,333 12,296,019 10,085,348 33,954,078 18,735,416
NATIONAL NOMINEES 2,128,006 6,976,307 5,095,290 6,583,617 5,551,118 4,461,922 8,613,417
CITICORP NOMINEES - 2,171,867 806,984 999,955 1,415,222 1,034,258 1,188,572
ANZ NOMINEES 1,527,287 3,824,805 2,541,596 3,799,373 - - -
WESTPAC NOMINEES 1,024,216 - - - - - -
Totals 4,679,509 15,252,490 24,333,182 26,279,177 29,875,448 59,845,107 74,774,381

6.5.3.4 REGISTRY STATISTICS
YEAR
Top 20
Shares Held
% of
Register
Institutions
Only
% of
Register
Total Issued
Shares
2006
28,900,533 39.6%
4,679,509 6.4% 73,042,012
2007
37,077,353 39.0%
15,252,490 16.1% 94,975,161
2008
52,880,570 44.4%
24,333,182 20.4% 119,229,279
2009
57,533,441 41.6%
26,279,177 19.0% 138,195,237
2010
59,459,223 40.9%
29,875,448 20.5% 145,412,627
2011
89,808,306 56.2%
59,845,107 37.4% 159,858,145
2012
130,221,057 47.7%
74,774,381 39.7% 188,398,520

2012

An increase in institutional ownership from 6.4% in 2006 to 39.7% in 2012 says a lot about what is playing
out in the market camouflaged by layers of confusion spread by brokers, financial media and public forums.

19

6.5.3.5.1 CHARTS
The increasing levels of corporate control over the register is borne out by the following charts.

The situation is certainly counterintuitive to what could be expected from a company with a supposedly
inferior low grade resource. The more reliably informed sectors of the market have positioned themselves
while many retail investors have sold out. The company has certainly vindicated itself following difficulties
in getting a complex resource to comply with JORC reporting requirements and at the same time having
the JORC estimates match the likely realities of mining. Yet shareholders have been unfairly subjected to
very considerable losses of wealth and loss of opportunity over a 6 year period through problems with
being able to convey their in-house assessments to the market about a unique resource, which are likely to
be much more accurate to those officially sanctioned by the ASX.
6.5.3.5.2

Top 20 - Institutions
Balance of Register

Top 20 Institutions
New Apex Asia
Balance of Register

Increasing Institutional Ownership
As a per cent of the Register

Increasing Institutional Ownership
By Number of Shares
20

6.5.3.6 INSTITUTIONAL INVOLVEMENT FROM 2006 to 2012

The high volumes of churn based trading associated with institutions generally and with Citicorp Nominees
and National Nominees in particular, provide the backdrop for major institutional accumulation off-market.
The accumulation has principally been in the form of placements but there have also been some on-market
acquisitions through substantial levels of buying by the M&G Group.
The fact that the corporate presence in the market has been overwhelming, but with only one active
participant accumulating shares, is extremely unusual and also suggests a unified/co-ordinated approach
to trading. Sophisticated investors would all have access to the same information, yet there has been no
attempt to either maximize profits or to add to stock levels in the face of obvious interest in the stock. The
principal activity of institutions has been to churn their holdings back and forth between themselves.
While the motivation and intent of institutions with their trading is fairly clear in supporting increased
corporate ownership over the company, there is a more important question concerning their monopoly
over the market. The question arises because increased corporate ownership over the company has come
at the expense of all other investors, particularly retailers. The question is one of unfair management of
the market while achieving their corporate agendas with their techniques used for managing the market
giving rise to highly anomalous long term data trends. Or to put it succinctly, the concern relates to share
price manipulation even if the tactics used are given the green light by market regulators.

2006 2007 2008 2009 2010 2011 2012
Prolific Trading entities
Citicorp & National Nominees
Despite major confusion
regarding the Rocklands resource
in Aug 2010 it was the catalyst for
major corporate involvement in
the company through late 2010
and 2011
(Oct)
The increased registry presence of institutions has coincided with anomalous data trends and
dubious trading behaviours
Shares Held
21

Section 4

A SUMMARY OF 30 MONTHS OF BROKER ACTIVITY IN
RELATION TO CuDECO

22

6.5.4.1 BROKER TRADING SUMMARY: Period Jan 2010 through to June 2012
A summary of 30 months of trading is provided in the following table. Broker codes are available as
Appendix 5. The Totals column under the Trading Details section is the sum of buying and selling
transactions and provides a measure from which to compare broker activity. Net is an indication of net
buying or net selling from all the trading and Margin refers to the difference between average selling
prices and average buying prices.
The % Market Share section enables broker performance to be monitiored whether it by volume of
trades, number of transactions or the volume of settlements undertaken.
SALES PURCHASES TRADING DETAILS % MARKET SHARE
Broker
Sell Sell Buy Buy
Trades
Totals Net Margin
By Total
Volume
By Number
of Trades
BY
Settlements Volumes Trades Volumes
ABNA 19,680 123 22,748 137 42,428 3,068 $0.32 0.0% 0.0% -
AGNT 19,800 16 0 0 19,800 -19,800 - 0.0% 0.0% -
AIEX 24,796,565 16,213 21,738,508 15,563 46,535,073 -3,058,057 -$0.07 5.7% 3.2% 9.1%
AUST 599,721 464 158,540 86 758,261 -441,181 0.881 0.1% 0.1% -
BAIL 647,064 504 250,373 204 897,437 -396,691 -$0.15 0.1% 0.1% 0.2%
BBY 13,682,619 15,477 28,222,106 26,366 41,904,725 14,539,487 -0.017 5.1% 4.2% 0.8%
BELL 10,027,918 6,437 7,676,658 5,087 17,704,576 -2,351,260 $0.16 2.2% 1.2% 3.4%
BRID 208,316 172 186,902 158 395,218 -21,414 0.018 0.0% 0.0% -
BRLL 629,626 489 676,890 346 1,306,516 47,264 $0.17 0.2% 0.1% 0.1%
BTIG 376,565 243 76,565 149 453,130 -300,000 -0.252 0.1% 0.0% -
BYS 74,028 53 76,590 69 150,618 2,562 $0.40 0.0% 0.0% -
CAM 421,750 210 356,655 194 778,405 -65,095 -0.358 0.1% 0.0% -
CARM 170,419 181 189,169 159 359,588 18,750 -$0.67 0.0% 0.0% -
CCZ 15,000 22 5,000 5 20,000 -10,000 1.529 0.0% 0.0% -
CITI 29,539,055 44,139 29,578,486 45,978 59,117,541 39,431 $0.01 7.2% 9.1% 2.4%
CLSA 362,993 920 157,931 224 520,924 -205,062 -0.403 0.1% 0.1% -
CMCS 2,343,583 1,711 2,115,135 1,712 4,458,718 -228,448 -$0.01 0.5% 0.3% 0.6%
COMM 76,624,662 48,152 75,215,000 48,164 151,839,662 -1,409,662 0.009 18.6% 9.8% 11.9%
CSUI 10,246,191 24,229 10,861,565 26,113 21,107,756 615,374 $0.02 2.6% 5.1% 2.0%
D2MX 3,785,228 1,614 4,010,207 1,222 7,795,435 224,979 -0.054 1.0% 0.3% -
DAIW 273,004 415 347,032 433 620,036 74,028 $0.46 0.1% 0.1% -
DMG 34,190,490 59,738 31,410,111 56,832 65,600,601 -2,780,379 -0.08 8.0% 11.8% 5.2%
ETRD 26,758,640 16,823 23,951,632 16,564 50,710,272 -2,807,008 $0.04 6.2% 3.4% 5.9%
EURO 82,314 95 122,613 80 204,927 40,299 0.194 0.0% 0.0% -
EVAN 271,717 141 10,175 5 281,892 -261,542 $0.64 0.0% 0.0% -
FOST 1,508,690 663 1,803,806 833 3,312,496 295,116 0.108 0.4% 0.2% -
FTDT 6,028 28 14,453 41 20,481 8,425 $0.03 0.0% 0.0% -
FWH 79,344 70 52,270 43 131,614 -27,074 -0.944 0.0% 0.0% -
GETCO 215,151 1,297 215,230 1,260 430,381 79 $0.00 0.1% 0.3% -
GS 12,143,860 13,911 12,393,121 15,059 24,536,981 249,261 -0.006 3.0% 2.9% -
HART 3,171,051 1,376 2,016,787 1,411 5,187,838 -1,154,264 -$1.04 0.6% 0.3% 0.1%
HUB24 8,154,262 2,968 8,085,633 2,830 16,239,895 -68,629 0.013 2.0% 0.6% 0.9%
IABL 0 0 616 2 616 616 - 0.0% 0.0% -
IMCP 1,498,323 5,245 1,460,734 4,218 2,959,057 -37,589 -0.009 0.4% 1.0% -
INCA 161,028 154 63,117 76 224,145 -97,911 -$0.23 0.0% 0.0% -
INST 5,405,076 8,880 5,221,925 9,350 10,627,001 -183,151 -0.485 1.3% 1.8% -
INTS 270,191 142 891,653 133 1,161,844 621,462 $1.54 0.1% 0.0% -
ITG 116,077 571 419,919 1,204 535,996 303,842 0.653 0.1% 0.2% -
JDV 507,233 404 524,841 483 1,032,074 17,608 -$0.01 0.1% 0.1% 0.0%
JPM 3,578,482 4,147 4,079,534 3,256 7,658,016 501,052 -0.261 0.9% 0.8% 2.4%
KOKO 61,018 317 42,209 262 103,227 -18,809 -$0.51 0.0% 0.1% -
LDAL 113,271 251 47,960 36 161,231 -65,311 -0.894 0.0% 0.0% -
LODG 713,239 812 120,453 158 833,692 -592,786 -$0.75 0.1% 0.1% -
MACP 6,468,903 4,276 5,523,062 3,839 11,991,965 -945,841 0.095 1.5% 0.8% 1.7%
MACQ 15,655,957 34,330 15,284,159 31,915 30,940,116 -371,798 -$0.09 3.8% 6.7% 5.3%
MERL 9,654,118 14,709 9,201,293 14,730 18,855,411 -452,825 -0.069 2.3% 3.0% 3.0%
23

SALES PURCHASES TRADING DETAILS % MARKET SHARE
Broker
Sell Sell Buy Buy
Trades
Totals Net Margin
By Total
Volume
By Number
of Trades
BY
Settlements Volumes Trades Volumes
MFGSA 40,385 22 0 0 40,385 -40,385 - 0.0% 0.0% -
MINC 1,496,937 1,709 1,570,387 1,695 3,067,324 73,450 0.026 0.4% 0.3% -
MOELIS 385,884 219 0 0 385,884 -385,884 - 0.0% 0.0% -
MORR 3,426,554 865 3,426,554 845 6,853,108 0 0.006 0.8% 0.2% -
MSDW 8,681,210 28,336 20,476,144 41,603 29,157,354 11,794,934 $0.07 3.6% 7.1% -
NAL 343,672 746 390,685 1,187 734,357 47,013 -0.025 0.1% 0.2% -
NATO 6,748 14 19,761 18 26,509 13,013 $0.92 0.0% 0.0% -
OPTV 113,431 459 122,035 251 235,466 8,604 -0.096 0.0% 0.1% -
ORDS 3,002,309 2,684 1,970,038 1,410 4,972,347 -1,032,271 $0.54 0.6% 0.4% -
PERSH 1,004,670 821 493,094 135 1,497,764 -511,576 -0.217 0.2% 0.1% 2.4%
PRES 3,310 4 8,270 3 11,580 4,960 $1.58 0.0% 0.0% -
PSL 8,407,362 7,142 5,999,627 2,765 14,406,989 -2,407,735 0.1 1.8% 1.0% 1.3%
RBC 216,741 126 35,641 6 252,382 -181,100 -$0.57 0.0% 0.0% -
RBS 1,423,961 2,833 1,489,695 2,912 2,913,656 65,734 0.013 0.4% 0.6% 1.2%
RBSM 3,124,511 2,848 1,561,750 1,257 4,686,261 -1,562,761 $0.10 0.6% 0.4% 0.8%
REYN 65,950 74 124,416 73 190,366 58,466 0.706 0.0% 0.0% -
SBAR 12,519,913 8,739 12,195,335 6,825 24,715,248 -324,578 $0.21 3.0% 1.6% 2.0%
SCE 215,887 66 224,387 51 440,274 8,500 0.153 0.1% 0.0% -
SHAD 752,130 532 311,713 280 1,063,843 -440,417 $0.15 0.1% 0.1% -
SHAW 1,038,682 1,000 859,852 698 1,898,534 -178,830 0.046 0.2% 0.2% 0.3%
SOSL 16,814,844 12,223 16,903,003 11,818 33,717,847 88,159 -$0.03 4.1% 2.4% 1.0%
STBG 489,938 431 860,915 562 1,350,853 370,977 0.386 0.2% 0.1% 0.0%
SUSQ 7,420,378 6,043 7,434,726 6,669 14,855,104 14,348 $0.03 1.8% 1.3% -
TAYL 923,100 401 947,650 561 1,870,750 24,550 -0.131 0.2% 0.1% -
TIMB 479,886 510 452,584 474 932,470 -27,302 -$0.02 0.1% 0.1% -
TPPM 5,460,667 3,740 5,187,700 3,565 10,648,367 -272,967 -0.024 1.3% 0.7% 0.7%
UBS 24,255,420 76,170 20,098,239 69,322 44,353,659 -4,157,181 $0.02 5.4% 14.8% 26.9%
WBC 199,802 258 285,913 358 485,715 86,111 0.006 0.1% 0.1% -
WILS 939,798 755 572,850 418 1,512,648 -366,948 $0.18 0.2% 0.1% -

TOTALS 408,902,330 492,902 408,902,330 492,750 817,804,660 0 - 99.9% 99.8% 91.6%

6.5.4.2.1 LEADING BROKERS:
Broker data by itself doesnt convey what is occurring with trading because institutions spread their
immense influence across a wide cross section of brokers The result is to smooth out their impact on the
market but at the same time they are able to effectively dominate all trading activity.
Sales Purchases Trading Details % Market Share
Broker Sell Volume Trades Buy Volume Trades Totals Net Margin
By Total
Volume
By Number
of Trades
BY
Settlements
COMM 76,624,662 48,152 75,215,000 48,164 151,839,662 -1,409,662 $0.01 18.6% 9.8% 11.9%
DMG 34,190,490 59,738 31,410,111 56,832 65,600,601 -2,780,379 -$0.08 8.0% 11.8% 5.2%
CITI 29,539,055 44,139 29,578,486 45,978 59,117,541 39,431 $0.01 7.2% 9.1% 2.4%
ETRD 26,758,640 16,823 23,951,632 16,564 50,710,272 -2,807,008 $0.04 6.2% 3.4% 5.9%
AIEX 24,796,565 16,213 21,738,508 15,563 46,535,073 -3,058,057 -$0.07 5.7% 3.2% 9.1%
UBS 24,255,420 76,170 20,098,239 69,322 44,353,659 -4,157,181 $0.02 5.4% 14.8% 26.9%
BBY 13,682,619 15,477 28,222,106 26,366 41,904,725 14,539,487 -$0.02 5.1% 4.2% 0.8%
SOSL 16,814,844 12,223 16,903,003 11,818 33,717,847 88,159 -$0.03 4.1% 2.4% 1.0%
MACQ 15,655,957 34,330 15,284,159 31,915 30,940,116 -371,798 -$0.09 3.8% 6.7% 5.3%
MSDW 8,681,210 28,336 20,476,144 41,603 29,157,354 11,794,934 $0.07 3.6% 7.1% -
GS 12,143,860 13,911 12,393,121 15,059 24,536,981 249,261 -$0.01 3.0% 2.9% -
SBAR 12,519,913 8,739 12,195,335 6,825 24,715,248 -324,578 $0.21 3.0% 1.6% 0.02
CSUI 10,246,191 24,229 10,861,565 26,113 21,107,756 615,374 $0.02 2.6% 5.1% 2.0%
MERL 9,654,118 14,709 9,201,293 14,730 18,855,411 -452,825 -$0.07 2.3% 3.0% 3.0%
BELL 10,027,918 6,437 7,676,658 5,087 17,704,576 -2,351,260 $0.16 2.2% 1.2% 3.4%

24

The reality with trading is that the majority of buying and selling by all leading brokers is for institutions
including a substantial portion of the activity within the retail brokers, COMM, ETRD and AIEX. Trading in
CuDeco is dominated by broker Commonwealth Securities followed by Deutsche Bank and Citigroup Global
Markets but registry data suggests that they are all servicing much the same institutional interests.
6.5.4.2.2 LEADING BROKERS BY NET BUYING & NET SELLING
The long term trends regarding net buying and net selling by brokers are somewhat peculiar with just two
brokers responsible for practically all of the net accumulation that occurred and a handful of brokers
dominating the net selling.
NET BUYING
BROKER SELLS BUYS NET SELLS % MARKET SHARE
BBY 13,682,619 28,222,106 14,539,487 5.1%
MSDW 8,681,210 20,476,144 11,794,934 3.6%
INTS 270,191 891,653 621,462 0.1%
CSUI 10,246,191 10,861,565 615,374 2.6%
JPM 3,578,482 4,079,534 501,052 0.9%
STBG 489,938 860,915 370,977 0.2%
ITG 116,077 419,919 303,842 0.1%
FOST 1,508,690 1,803,806 295,116 0.4%
GS 12,143,860 12,393,121 249,261 3.0%
D2MX 3,785,228 4,010,207 224,979 1.0%
SOSL 16,814,844 16,903,003 88,159 4.1%
WBC 199,802 285,913 86,111 0.1%

The dominant net buying by BBY Ltd is largely attributable to the company itself with Buy Back programs to
take advantage of an undervalued share price. The shares purchased through the Buy Back also had the
effect of countering increasing levels of short selling that tended to increase in intensity as significant
operational break throughs were achieved by the company. The trend is evident on the chart spanning 2.5
years where there was generally downward pressure on the share price in all periods other than when
M&G were accumulating stock. The large volumes of selling by M&G is assumed to be institutionally based.

2010

M&G
Buying
M&G
Placement
M&G
Buying
Resource
Upgrade
2010
2011
2012
30%

2010
10%

2010
20%

2010
SHORT SELLING (Monthly Short Sales as a percentage of Monthly Total Sales)
Price
Slump
None of the buying and selling of these
bokers can be linked to the register as all
brokers use 3
rd
party agents to settle
their transactions. However it is
assumed that most of their activity is
servicing institutional orders as the
numbers are needed to account for the
large volumes of back and forth
institutional transfers that have
occurred.

6.5.4.2.3
THE CDU SHARE PRICE VERSUS MONTHLY SHORT SELLING

25

The companys Buy Back and Employee Share Purchase Scheme purchases accounted for around 14 million
shares in total which happened to coincide with all of BBYs accumulation. It leaves a further almost 14
million BBY sales and close to 14 million purchases attributable to institutional dealings.
The other significant accumulation was associated with buying by Morgan Stanley (MSDW). MSDW was
responsible for the bulk of purchases by M&G leaving a further 8 million buys and sells churned back and
forth through the market. The churned stock is also likely to represent institutional activity.
Disclosures concerning the Buy Back purchases and the substantial holding of the M&G Group add a
degree of transparency to the accumulation of shares by BBY and MSDW, however there is zero
transparency concerning the additional activities of the two brokers which when combined exceeds 22
million sales and purchases conducted for unknown clients but assumed to be institutions.
While the net buying is readily accounted for, it also suggests extremely unusual market dynamics. The vast
majority of trading is represented by trading churn by institutional investors with shares generally retained
and/or holdings added to.
It is highly unlikely that just one sophisticated investor has recognized the merits of Rocklands and has set
about gaining a major stake in the company with all other knowledgeable parties simply not interested. It
doesnt make sense, especially when new discoveries with the potential to become major long life mining
enterprises are a rarity. Also, major mining companies are all facing difficulties increasing their resource
inventories and growing their businesses in regard to copper.
Significantly, M&Gs decision to gain exposure to Rocklands was based primarily on Due Diligence on the
information released on Aug 18, 2010 which contradicts the severe market reaction that occurred and adds
deep suspicion about what really took place. Especially since the M&G buying took the price back up to a
high of $4.72 on Dec 12, 2010 just as their on-market buying campaign came to a halt.
6.5.4.2.4 NET SELLING
BROKER SELLS BUYS NET SELLS % MARKET SHARE
UBS 24,255,420 20,098,239 -4,157,181 5.40%
AIEX 24,796,565 21,738,508 -3,058,057 5.70%
ETRD 26,758,640 23,951,632 -2,807,008 6.20%
DMG 34,190,490 31,410,111 -2,780,379 8.00%
PSL 8,407,362 5,999,627 -2,407,735 1.80%
BELL 10,027,918 7,676,658 -2,351,260 2.20%
RBSM 3,124,511 1,561,750 -1,562,761 0.60%
COMM 76,624,662 75,215,000 -1,409,662 18.60%
HART 3,171,051 2,016,787 -1,154,264 0.60%
ORDS 3,002,309 1,970,038 -1,032,271 0.60%
MACP 6,468,903 5,523,062 -945,841 0.80%
LODG 713,239 120,453 -592,786 0.10%

The net selling is more evenly distributed than the net buying with UBS Securities leading the way by a
wide margin followed by retail brokers in AIEX & ETRD and then Deutsche Bank (DMG). It is interesting to
compare the net selling of brokers as per ASX data to the net registry movements associated with the same
brokers which is usually retail based. The discrepancies shown highlighted in the following table point to
where institutional trading by brokers has also occurred and which has been settled by other agents not
the brokers themselves.
The selling is a
mixture of retail and
corporate sales
however the register
shows that over 20
million shares have
been removed from
retail hands over the
2.5 year period.
26

BROKER
ASX
SELLS
ASX
BUYS
NET
SELLS
Net Registry
Movements
UBS 24,255,420 20,098,239 -4,157,181
-48,365
AIEX 24,796,565 21,738,508 -3,058,057
-2,915,034
ETRD 26,758,640 23,951,632 -2,807,008
-2,169,025
DMG 34,190,490 31,410,111 -2,780,379
0
PSL 8,407,362 5,999,627 -2,407,735
-614,999
BELL 10,027,918 7,676,658 -2,351,260
-1,187,144
RBSM 3,124,511 1,561,750 -1,562,761
-346,174
COMM 76,624,662 75,215,000 -1,409,662
-1,144,187
HART 3,171,051 2,016,787 -1,154,264
-638,694
ORDS 3,002,309 1,970,038 -1,032,271
-155,503
MACP 6,468,903 5,523,062 -945,841
-1,037,049
LODG 713,239 120,453 -592,786 ?

The very large volumes of buying and selling generally represent the washing of shares back and forth
between institutional holdings and that is particulalry evident with the most prominent broker
Commonwealth Securities. Only 40% of its turnover appears to be related to retail client activity which
suggests that large volumes of trades are likely to have been done for institutions.
6.5.4.3.1 LEADING BROKERS BY NUMBER OF TRADES:
The leading broker by the number of transactions put through the market and by a very wide margin was
UBS Securities. Given that very little is known about the effect of trading algorithms the prominence by
UBS represents an excellent starting point to assess what impact algorithms have on the market and the
fairness of trading to other participants - especially when trading programs are tuned to the programs used
by affiliated brokers and especially if brokers are able to run multiple algorithms.
Certainly the system is shrouded in unknowns other than that the programs are manipulative. It is why the
major players need equal access to the ASX computers, irrespective of the unfairness imposed on all other
particpants who dont have privileged access. (Refer Alan Kohler article)

Market Share
BROKER SELL TRADES BUY TRADES
TOTAL
TRADES
BY TRADES BY VOLUME
UBS 76,170 69,322 145,492 14.8% 5.4%
DMG 59,738 56,832 116,570 11.8% 8.0%
COMM 48,152 48,164 96,316 9.8% 18.6%
CITI 44,139 45,978 90,117 9.1% 7.2%
MSDW 28,336 41,603 69,939 7.1% 3.6%
MACQ 34,330 31,915 66,245 6.7% 3.8%
CSUI 24,229 26,113 50,342 5.1% 2.6%
BBY 15,477 26,366 41,843 4.2% 5.1%
ETRD 16,823 16,564 33,387 3.4% 6.2%
AIEX 16,213 15,563 31,776 3.2% 5.7%
MERL 14,709 14,730 29,439 3.0% 2.3%
GS 13,911 15,059 28,970 2.9% 3.0%
SOSL 12,223 11,818 24,041 2.4% 4.1%
INST 8,880 9,350 18,230 1.8% 1.3%
SBAR 8,739 6,825 15,564 1.6% 3.0%
SUSQ 6,043 6,669 12,712 1.3% 1.8%
BELL 6,437 5,087 11,524 1.2% 2.2%

Very small orders are the preserve of sophisticated investors who can afford the upfront licensing fees to
sanction their use. However the ability to place small orders not only helps in forcing retail investors to pay
LODG has no registry presence as
its trades are settled by agents
Variances between what has
occurred on the register and the
net trading of brokers is a pointer
to the extent of trading done for
non retail clients that is settled
elsewhere
27

more or receive less in order to gain an order fill but it can facilitate control over pricing levels with very
substantial price fluctuations achieved for little overall cost.
Adding to the success of algorithms trading back and forth with each other by brokers who are in control of
the market, has been a dumb downed market with no significant buying interest from outsiders. That has
certainly been the case with CuDeco. Misinformation has enveloped the company because of JORC related
issues stemming from the ASXs intervention back in June 2006 and again in 2010 with a resource
statement that was surrounded by confusion and disappointment.

6.5.4.4.1 ORDER SIZES USED BY THE PROMINENT BROKERS
A summary of the average order size used by the leading brokers for buying and selling is provided in the
following tables. The first table rates prominent brokers by the size of their selling orders, and the second
lists them by the size of their buying orders. In general, the brokers with the smallest order sizes are
associated almost exclusively with trading on behalf of institution. It focusses even greater attention on
what trading algorithms are achieving in swapping shares back and forth between sophisticated interests
that are likely to be informally affiliated and pursuing common trading objectives.
Broker Sells Trades
Avg.
Sell
Buys Trades
Avg.
Buy
Broker Sells Trades
Avg.
Sell
Buys Trades
Avg.
Buy
MSDW 8,681,210 28,336 306 20,476,144 41,603 492

UBS 24,255,420 76,170 318 20,098,239 69,322 290
UBS 24,255,420 76,170 318 20,098,239 69,322 290

CSUI 10,246,191 24,229 423 10,861,565 26,113 416
CSUI 10,246,191 24,229 423 10,861,565 26,113 416

MACQ 15,655,957 34,330 456 15,284,159 31,915 479
MACQ 15,655,957 34,330 456 15,284,159 31,915 479

MSDW 8,681,210 28,336 306 20,476,144 41,603 492
DMG 34,190,490 59,738 572 31,410,111 56,832 553

DMG 34,190,490 59,738 572 31,410,111 56,832 553
INST 5,405,076 8,880 609 5,221,925 9,350 558

INST 5,405,076 8,880 609 5,221,925 9,350 558
MERL 9,654,118 14,709 656 9,201,293 14,730 625

MERL 9,654,118 14,709 656 9,201,293 14,730 625
CITI 29,539,055 44,139 669 29,578,486 45,978 643

CITI 29,539,055 44,139 669 29,578,486 45,978 643
JPM 3,578,482 4,147 863 4,079,534 3,256 1,253

GS 12,143,860 13,911 873 12,393,121 15,059 823
GS 12,143,860 13,911 873 12,393,121 15,059 823

MINC 1,496,937 1,709 876 1,570,387 1,695 926
BBY 13,682,619 15,477 884 28,222,106 26,366 1,070

BBY 13,682,619 15,477 884 28,222,106 26,366 1,070
RBSM 3,124,511 2,848 1,097 1,561,750 1,257 1,242

SUSQ 7,420,378 6,043 1,228 7,434,726 6,669 1,115
ORDS 3,002,309 2,684 1,119 1,970,038 1,410 1,397

CMCS 2,343,583 1,711 1,370 2,115,135 1,712 1,235
PSL 8,407,362 7,142 1,177 5,999,627 2,765 2,170

JPM 3,578,482 4,147 863 4,079,534 3,256 1,253
SUSQ 7,420,378 6,043 1,228 7,434,726 6,669 1,115

AIEX 24,796,565 16,213 1,529 21,738,508 15,563 1,397
CMCS 2,343,583 1,711 1,370 2,115,135 1,712 1,235

ORDS 3,002,309 2,684 1,119 1,970,038 1,410 1,397
SOSL 16,814,844 12,223 1,376 16,903,003 11,818 1,430

HART 3,171,051 1,376 2,305 2,016,787 1,411 1,429
SBAR 12,519,913 8,739 1,433 12,195,335 6,825 1,787

SOSL 16,814,844 12,223 1,376 16,903,003 11,818 1,430
TPPM 5,460,667 3,740 1,460 5,187,700 3,565 1,455

MACP 6,468,903 4,276 1,513 5,523,062 3,839 1,439
MACP 6,468,903 4,276 1,513 5,523,062 3,839 1,439

ETRD 26,758,640 16,823 1,591 23,951,632 16,564 1,446
AIEX 24,796,565 16,213 1,529 21,738,508 15,563 1,397

TPPM 5,460,667 3,740 1,460 5,187,700 3,565 1,455
BELL 10,027,918 6,437 1,558 7,676,658 5,087 1,509

BELL 10,027,918 6,437 1,558 7,676,658 5,087 1,509
ETRD 26,758,640 16,823 1,591 23,951,632 16,564 1,446

COMM 76,624,662 48,152 1,591 75,215,000 48,164 1,562
COMM 76,624,662 48,152 1,591 75,215,000 48,164 1,562

SBAR 12,519,913 8,739 1,433 12,195,335 6,825 1,787
FOST 1,508,690 663 2,276 1,803,806 833 2,165

FOST 1,508,690 663 2,276 1,803,806 833 2,165
HART 3,171,051 1,376 2,305 2,016,787 1,411 1,429

PSL 8,407,362 7,142 1,177 5,999,627 2,765 2,170
D2MX 3,785,228 1,614 2,345 4,010,207 1,222 3,282

HUB24 8,154,262 2,968 2,747 8,085,633 2,830 2,857
HUB24 8,154,262 2,968 2,747 8,085,633 2,830 2,857

D2MX 3,785,228 1,614 2,345 4,010,207 1,222 3,282
MORR 3,426,554 865 3,961 3,426,554 845 4,055

MORR 3,426,554 865 3,961 3,426,554 845 4,055

28

6.5.4.5.1 CROSS TRADES
Cross trades have been a significant feature of trading where the trend appears to have been not for
parcels of shares to be legitimately crossed up by brokers having both the selling client and the buying
client, but rather, trading algorithms have issued them automatically as per inbuilt programming
instructions. As such the trades appear to be more strategic and possibly manipulative rather than shares
being genuinely exchanged.
Crossings equate to 12.2% of all shares traded over the 2.5 year period, so represent a significant feature of
trading.
A summary of the various types of cross trades that have occurred reveals that the main crossing types
utilized have been XT (a standard form of crossing) and SXXT (portfolio crossings).
Type Volume Share %

Type Number Share %
XT 33,132,469 66.4%

XT 44,507 85.7%
SXXT 14,303,894 28.7%

SXXT 2,286 4.4%
CPXT 763,170 1.5%

CPXT 2,068 4.0%
NXXT 508,597 1.0%

NXXT 1,065 2.1%
LTXT 254,220 0.5%

LTXT 9 0.0%
ETXT 253,165 0.5%

ETXT 108 0.2%
CX 214,429 0.4%

CX 1,715 3.3%
L1XT 195,000 0.4%

L1XT 1 0.0%
L3XT 122,099 0.2%

L3XT 5 0.0%
L4XT 99,222 0.2%

L4XT 2 0.0%
L5XT 45,143 0.1%

L5XT 14 0.0%
CXXT 14,293 0.0%

CXXT 54 0.1%
NX 3,562 0.0%

NX 69 0.1%
IBXT 1,400 0.0%

IBXT 5 0.0%
Total 49,910,663

Total 51,908

Broker involvements with XT crossings are set out in the table with brokers COMM, DMG and UBS clear
leaders in terms of volume. However UBS appears to have swamped trading with immense numbers of
cross trades which look to be designed to influence trading to the advantage of its clients rather than
representing genuine exchanges of shares. Whatever purposes are being served for UBS clients the result
has been to dumb down trading with small orders making it very difficult for retail investors to compete.
6.5.4.5.2 XT Trades
Broker Volume Share % Number Share % Average
COMM 16,881,606 51.0% 5,786 13.0% 2,918
DMG 3,260,162 9.8% 8,348 18.8% 391
UBS 2,446,253 7.4% 14,852 33.4% 165
ETRD 1,992,885 6.0% 653 1.5% 3,052
CITI 1,493,826 4.5% 4,419 9.9% 338
AIEX 1,424,941 4.3% 447 1.0% 3,188
MACQ 920,668 2.8% 3,864 8.7% 238
SBAR 772,725 2.3% 78 0.2% 9,907
BBY 764,896 2.3% 564 1.3% 1,356
SOSL 719,476 2.2% 429 1.0% 1,677
MSDW 571,151 1.7% 2,716 6.1% 210
HUB24 314,928 1.0% 39 0.1% 8,075

BELL 219,362 0.7% 45 0.1% 4,875
CSUI 214,092 0.6% 1,072 2.4% 200
RBSM 209,995 0.6% 4 0.0% 52,499
PSL 182,458 0.6% 49 0.1% 3,724
MERL 167,648 0.5% 425 1.0% 394
GS 145,597 0.4% 314 0.7% 464
TPPM 95,140 0.3% 36 0.1% 2,643

The situation is similar for DMG with
an average crossing trade of 391
shares compared to 572 for all their
sells and 553 for all their buys.
The average crossing size by UBS of
165 shares compares to their average
transaction size across all trading of
318 shares for sales and 290 for
purchases. The statistic questions the
genuiness of crossings particulalry
when very small parcels are crossed
resulting in a change in price .
29

6.5.4.5.3 PORTFOLIO CROSSINGS (SXXT)
Given the suspicions regarding trading as highlighted by the anomalous data uncovered by research, the
nature of portfolio crossings requires scrutiny. In particular, do the transactions represent bona fide
exchanges of shares between genuine buyers and genuine sellers or are they just another mechanism for
getting shares back into their rightful ownership after sales to trading partners on the ASX? The reason(s)
behind the sales in the first place is what provokes suspicion as institutions have been actively increasing
their holdings, not disposing of them.
Brokers have facilitated the following portfolio crossings.
Broker Volume % Share Count
CITI 2,955,,521 21% 397
GS 2,627,359 18% 373
DMG 2,350,122 16% 430
GSP 1,743,343 12% 298
MACQ 1,411,054 10% 225
CSUI 1,020,482 7% 186
JPM 741,649 5% 149
MERL 540,481 4% 101
MSDW 461,621 3% 77
UBSW 344,691 2% 32
CLSA1 49,037 0% 2
RBS 46,805 0% 11
COMM 11,729 0% 5
Totals 14,303,894

2,286

6.5.4.6.1 DOWN TICK TRENDS
Research into Down Ticks has uncovered some interesting anomalies regarding downward price
movements. The majority of price changes over 2.5 years of trading appear to have been managed by a
select band of brokers trading relatively small parcels shares back and forth between themselves as well as
in their own right via cross trades.
Attention has already been drawn to the fact that where a fall in price has occurred, Down Ticks have
occurred at the sellers asking price or have been achieved by a cross trade around 95% of the time.
It is a perplexing phenomenon but it is confirmed by long term data. Logically it would be expected that
over long periods of time falls in price would occur at the buyers Bid price 50% of the time (more or less),
and at the sellers ASK price the remaining 50% of the time.
A bias of 95% favouring the sellers ASK and broker cross trades is extraordinarily anomalous and means
that only 5% of downward price movements have resulted in the buyers BID price being hit.
What appears to have taken place to cause such anomalism is that Down Ticks are programmed to occur
whenever there is a gap between the BID and the ASK quotes and where trades have been occurring at the
sellers price. A seller reducing their ASK slightly but still positioned above the BID is then immediately
accepted by a buyer willing to pay over the BID. The transaction results in a trade at the new ASK price but
the trade represents a fall in price. Alternatively, a cross trade may occur at a reduced price from where
the stock was last trading but with the price chosen still above the quoted BID price. The process looks to
be managed by broker affiliates using algorithms that automatically execute when a trading gap occurs.
30

Broker cross trades may be one of a number of varieties such as XT trades where the broker assigns the
price, portfolio crossings where the broker assigns the price, CPXT trades, where the mid-point of a trading
GAP is used for the transaction price and so on. All can result in either higher or lower prices than the
previous pricing level but in the case of Down Ticks lower prices have been purposefully chosen by brokers
or at least by their trading algorithms.
In previous research the trend was for high levels of Down Ticks at the ASK price which when combined
with broker crossings meant that 95% of price falls were broker directed so that the transaction price was
above the highest BID quote in the system. A recent trend through 2012 has seen substantially more cross
trades and less trades at the asking price but when combined the result still equated to around 96%. It
means that most transactions (i.e.; all but 4%) have occurred at pricing levels above the buyers BID price.
The highly unusual situation appears to have resulted from brokers colluding with each other, albeit
through the design of the trading algorithms that they run. In general, trading data suggests that the seller
reducing the ASK price and the buyer who accepts the new ASK price are generally working together. In
addition only small parcels of shares have been used to force most changes in price.
The trends regarding unusual price formation for the 1
st
6months of 2012 are detailed in the next section.

6.5.4.6.2 DOWN TICK DATA - 2012: January to June
In trading over the first 6 months of 2012, the number of Down Ticks in price totalled 7,614. However, of all
the falls in price that have taken place, only 4% have occurred at the buyers BID price it is an astonishing
outcome! It means that reductions in price have been characterized by reduced asking prices as explained
above or through broker crossings. It suggests tight control over price movements by those responsible for
the Down Ticks (DTs). The data is summarized below.
DTs @ the ASK 6,138 81%
Broker Crossings 1,141 15%
DTs @ the BID 335 4%
Totals 7614 100%
To assess what is taking place in the market it is of interest to identify the brokers who have been
responsible for the majority of Down Ticks, both as sellers that have led to price falls, and as buyers who
have facilitated the trades.

BROKER NUMBER % ALL DTS CUMULATIVE

BROKER NUMBER % ALL DTS CUMULATIVE
UBSW 1826 24.0% 24.0% CITI 1237 16.3% 16.3%
MACQ 1013 13.3% 37.3% UBSW 1032 13.6% 29.8%
CITI 560 7.4% 44.7% CSUI 932 12.2% 42.1%
DMG 552 7.3% 51.9% BBY 756 9.9% 52.0%
COMM 528 6.9% 58.8% MACQ 609 8.0% 60.0%
MSDW 489 6.4% 65.3% MSDW 552 7.3% 67.2%
CSUI 438 5.8% 71.0% DMG 524 6.9% 74.1%
GS 349 4.6% 75.6% COMM 400 5.3% 79.4%
INST 334 4.4% 80.0% GS 327 4.3% 83.7%
JPM 292 3.8% 83.8% INST 238 3.1% 86.8%
MERL 263 3.5% 87.3% GETCO 211 2.8% 89.6%

ASKS or Cross Trades 96%
BIDS 4%

SELLERS RESPONSIBLE FOR DOWN TICKS BUYERS IN SUPPORT OF DOWN TICKS
Importantly, all brokers with the exception of Commonwealth Securities (COMM) primarily represent
institutions, and even then a large part of COMMs trading has traditionally been associated with non-retail
clients. Institutions are therefore seen to have had an enormous impact on controlling pricing levels with the
trading of shares back and forth between themselves generally, and with a monopoly over Down Ticks.
These brokers
represent 87% of all
sellers of Down Ticks
These brokers
represent 89% of all
buyers of Down Ticks
31

The influence by brokers in terms of price management of the CDU share price is better undertood when
an analysis is made of the parcel sizes of trades resulting in changed pricing levels.
In all trading over the 6 month period Jan to Jun 2012, the average parcel size of 77,994 separate
transactions was 433 shares. It compares to a parcel size of 448 for the 7,614 transactions that resulted in a
fall in price. However 70% of the Down Tick transactions had parcel sizes under 250 shares.
The involvement of brokers in forcing Down Ticks through transactions involving small numbers of shares is
as follows
PARCELS of 1 to 10 SHARES IN SIZE:
There were 1,582 Down Tick transactions involving parcels of between 1 and 10 shares in size. Remarkably,
such transactions represent a very considerable 20.8 % of all Down Ticks in price over the 6 month period.
In the table, the column % Share refers to the number of DTs by each broker compared to all DT
transactions below 11 shares in size.

Broker Number % Share

UBSW 676 42.7%

CITI 264 16.7%
MACQ 297 18.8%

MACQ 210 13.3%
DMG 142 9.0%

MSDW 176 11.1%
INST 110 7.0%

BBY 146 9.2%
MSDW 88 5.6%

CSUI 142 9.0%
CITI 60 3.8%

DMG 139 8.8%
GS 53 3.4%

UBSW 136 8.6%
JPM 32 2.0%

GS 59 3.7%
MERL 30 1.9% SOSL 50 3.2%
Totals 94.1% Totals 83.6%

There were 2,596 Down Tick trades involving share parcels of between 11 and 100 in size which represents
a further 34.1% of all trades over a six month period that resulted in a fall in price.


UBSW 700 27.0%

CITI 388 14.9%
MACQ 368 14.2%

UBSW 369 14.2%
JPM 202 7.8%

CSUI 299 11.5%
DMG 201 7.7%

MACQ 280 10.8%
GS 177 6.8%

BBY 258 9.9%
CITI 176 6.8%

MSDW 203 7.8%
INST 159 6.1%

DMG 188 7.2%
MSDW 134 5.2%

GS 89 3.4%
MERL 123 4.7% COMM 86 3.3%


The leading 4
account for
16.1% of all DTs
over the entire 6
month period.
The leading 4
account for
10.4% of all DTs
over the entire 6
month period.

SELLERS of Down Ticks BUYERS of Down Ticks
The leading 4
account for
19.3% of all DTs
The leading 4
account for
17.5% of all DTs

UBSW 243 20.5%

CITI 215 18.1%
MACQ 132 11.1%

UBSW 211 17.8%
CITI 121 10.2%

CSUI 191 16.1%
CSUI 114 9.6%

BBY 103 8.7%
COMM 108 9.1%

DMG 89 7.5%
MSDW 82 6.9%

GETCO 64 5.4%
MERL 74 6.2%

COMM 59 5.0%
DMG 66 5.6%

MSDW 56 4.7%
GS 44 3.7% MACQ 49 4.1%

The leading 4
account for
8.0% of all DTs
The leading 4
account for
9.5% of all DTs
32

There were 1,188 Down Tick trades involving parcels of between 101 and 250 shares in size which
represent a further 15.6% of all trades that resulted in a fall in price.
6.5.4.6.3 SUMMARY OF DOWN TICK (DT) TRADES
It is particularly telling that Down Tick transactions have occurred with parcel sizes much smaller than the
average parcel size of all shares traded, and that reductions in price have stemmed from a certain group of
brokers providing most of the selling and buying.

PARCEL SIZE TRANSACTIONS
% OF ALL DTs
CUMULATIVE
10 and under 1,582 21% 21%
11 to 100 2,596 34% 55%
101 to 250 1,188 16% 70%
Above 250 2,248 30% 100%
Totals 7,614 100%

The activity of the leading brokers regarding Down Ticks is summarized further by including the number of
crossings that have been undertaken in forcing Down Ticks in price.
6.5.4.7.1 LEADING BROKERS:
The 4 largest selling brokers asociated with Down Tick trades were UBS, MACQ, CITI and DMG. The tables
below show who the major buyers were in the selling transactions conducted by these brokers. Broker
cross trades have been highlighted by shading.
UBS DT Sells - 1,824

MACQ DT Sells - 1013

CITI DT Sells - 560

DMG DT Sells - 562
Broker Count
% of UBS
Sells
Broker Count
% of UBS
Sells
Broker Count
% of CITI
Sells
Broker Count
% of DMG
Sells
UBSW 475 26.0%

MACQ 250 24.7%

CITI 102 18.2%

DMG 154 27.9%
CITI 248 13.6%

CITI 171 16.9%

UBSW 72 12.9%

CITI 76 13.8%
BBY 198 10.9%

UBSW 94 9.3%

CSUI 55 9.8%

UBSW 54 9.8%
CSUI 159 8.7%

CSUI 84 8.3%

MACQ 48 8.6%

CSUI 45 8.2%
MSDW 108 5.9%

DMG 72 7.1%

MSDW 45 8.0%

COMM 34 6.2%
COMM 82 4.5%

BBY 69 6.8%

COMM 43 7.7%

BBY 33 6.0%
MACQ 80 4.4%

MSDW 43 4.2%

BBY 40 7.1%

MSDW 33 6.0%
GS 70 3.8%

COMM 42 4.1%

DMG 37 6.6%

MACQ 28 5.1%
INST 68 3.7%

GS 41 4.0%

GS 24 4.3%

GS 22 4.0%
DMG 66 3.6%

AIEX 35 3.5%

AIEX 22 3.9%

SUSQ 15 2.7%
SOSL 59 3.2%

SOSL 29 2.9%

SOSL 21 3.8%

AIEX 11 2.0%
ETRD 53 2.9%

INST 27 2.7%

MERL 14 2.5%

MERL 9 1.6%
GETCO 48 2.6%

BELL 11 1.1%

INST 12 2.1%

INST 8 1.4%
AIEX 30 1.6%

ETRD 11 1.1%

TPPM 6 1.1%

GETCO 7 1.3%
ITG 25 1.4%

TPPM 11 1.1%

PERSH 5 0.9%

BELL 5 0.9%
In each case the dominant buyer of DT trades was the broker themselves through the use of cross trades.
Such transactions involving small parcels of shares and where the broker is both seller and buyer in leading
to a reduction in price represents extremely suspicious trading behaviour. The situation compounds an
already unacceptable situation of brokers working collusively, through the use of trading algorithms, to
control pricing outcomes between themselves.
The following table draws attention to broker crossings involving parcels of shares under 100 in size.

Excessive use of broker crossings involving small
numbers of shares and at levels not commensurate
with their overall market activity also presents as
highly suspicious trading behaviour.

All DT Crossings Under 100 %
UBS 475 257 54%
MSDW 66 48 73%
MACQ 250 220 88%
CSUI 299 33 11%
JPM 24 23 96%
GS 46 15 33%
DMG 154 95 62%
CITI 102 33 32%

Half of all DTs were
achieved with trades of
under 100 shares and
70% occurred with
parcels under 250
shares
33

In 6 months trading there were around 77,994 transactions of which approx. 7,614 were trades that led to
lower prices. Yet 70% of such trades have influenced prices downward with little effort in terms of shares
traded with parcels mostly well under 250 shares in size. Such levels of control by a select few and with
one broker clearly dominating price setting does little to justify official claims of fair trading. Particularly as
changes in price are key events in share trading and set the bench mark for subsequent trading activity so
that overt control over pricing outcomes can seriously distort price discovery.
What the research data does is to put on display the results of algorithms continuously punching out
seemingly innocuous trades in dribs and drabs but where every now and then an opportunity presents to
conveniently take the share price lower at little cost to a clients holding. Contrived trades between
brokers or manipulative crossings by brokers at crucial times that result in lower prices may be revealing a
sinister level of control over the market that takes place daily yet is virtually impossible to monitor on a
daily basis. Only analysis of long term data and the auditing of brokers accounts along with their clients has
any chance of discovering what exactly is taking place.
6.5.4.8.1 COMMENT:
Irregularities in CuDeco trading provide an opportunity to investigate a number of concerning issues and to
assess their impact on the wider market. The issues include:
The impact of the privileged use of trading algorithms about which next to nothing was known
when their licensing was approved;
The use of HFT trading in terms of monopolizing the trading in a particular stock which is an aspect
of trading completely overlooked by the current debate ;
The excessive use and bland acceptance of Wash Trades;
The excessive use of Dark Pools for exchanges of shares, the reasons for which are obscure;
Manipulative abuses of the system of short selling including irregular reporting and the
management of exposed positions off-market ;
The inadequacies of a system that facilitates collusion, unfair dealings and cartel like levels of
control over the market by sophisticated investors, and;
The shortfalls of a system that promotes itself as transparent when the reality is that the majority of
dealings are opaque and extremely difficult to reconcile.
CuDeco research at least provides a level of transparency about the trading taking place where the extent
of problems is clearly evident. It is apparent that the system has been interminably compromised by the
introduction of trading innovations brought about through new technology, imaginative trading schemes
and exotic new financial products - but without any comprehension of what negative impacts might
accompany them and what measures might be needed to guarantee the integrity of the market.
NOTE: While the focus has been on Down Ticks as price suppression has been a common theme with the
trading of CuDeco, the same levels of control appear to exist on the upside as well. With upward
movements in price, there looks to be a strong bias toward broker crossings and trades that favour the BID
price in causing increases in price (i.e.; Up Ticks). The same group of brokers tend to dominate upward
movements as well as downward movements with the real issue being, who are they acting for and what
are their clients attempting to achieve? Again Up Tick trends with transactions occurring at the asking
price only taking place 5% of the time are far removed from what would be expected in a normal/fair
market.
34

6.5.4.9.1 BROKER AFFILIATIONS
Recent developments shed some important insights into broker relationships and the likelihood that
brokers assist each other with their trading objectives.
On Sept 12 this year various financial media outlets reported a decision by Citigroup (CITI) to sell its share
of broker Morgan Stanley Smith Barney (SBAR) to Morgan Stanley (MSDW). The reporting confirms the
association between CITI, MSDW and SBAR with CITI and MSDW having joint ownership of SBAR. The
inference is that their institutional trading regarding CuDeco is likely to be strongly aligned because of the
interconnections between all 3. Extracts of the media reports are as follows:
Morgan Stanley, Citigroup settle brokerage dispute
Sept 11, 2012 Ratings agency Fitch considers Morgan Stanley's purchase of an additional 14% of Morgan Stanley
Smith Barney (MSSB) from Citigroup Inc. (Citi) to be a positive development for Morgan Stanley and a more modest
net positive for Citi. The move raises Morgan Stanley's ownership of the joint venture to 65%.
Also
Morgan Stanley to Take Over Smith Barney, With Citigroups Blessing
Sept 13, 2012 - The joint venture, Morgan Stanley Smith Barney, was born in 2009, forged from Citigroups Smith
Barney unit and Morgan Stanleys counterpart, as a way to benefit both companies. For Citigroup, which had long
identified the brokerage as a nonessential asset to be sold off to free up capital, the deal will speed up its own
rehabilitation plan. The two companies outlined steps that would allow Morgan Stanley to buy the 49 percent of the
business that it did not already own within three years. That will begin with the purchase of a 14 percent stake that will
close by the end of September. Morgan Stanley will buy an additional 15 percent by next June.
The media announcements reveal that even before the deal that has been struck CITI controlled 49% of
SBAR and MSDW owned 51% demonstrating the ownership connections between the three brokers.
Given that CITI and MSDW do not show retail activity on the register and can be assumed to service
institutional interests, and given that a good portion of SBARs activity is also institutionally based, it would
be reasonable to look at a situation where the 3 brokers could be effectively regarded as one trading
group.
Such a scenario would provide an extremely powerful presence in the trading of CuDeco shares on behalf
of institutions and would help to explain in part the co-operation with trading that is evident in the data
with large volumes readily swapped back and forth with minimal changes to effective ownership.
It also follows that brokers dont have to be formally affiliated to take part in collusive trading strategies
and could be doing so simply by complying with the instructions that are issued to them by institutional
fund managers even without the knowledge that other brokers are engaged similarly and by the same
interests.

35

6.5.4.10.1 INSTITUTIONAL TRADING THROUGH RETAIL BROKERS
Brokers such as COMM, ETRD and AIEX have large numbers of retail clients, but also facilitate large
volumes of buying and selling for corporate and/or institutional interests. The result is that the activity of
corporate entities is camouflaged amongst retail investors and is further hidden from view when the
corporate transactions are forwarded to ASTC participants for processing. On the other hand, retail
transactions put through the market by these brokers are processed by the broker themselves. Also, a lot
of the transactions are likely to be Wash Trades as they dont appear to make it to the register, further
disguising whatever trading agendas are being served by the anonymous buying and selling taking place
within the retail brokers.
The extent of corporate involvement amongst the leading retail brokers has been quantified for all trading
between January 2010 and June 2012 and is summarized in Appendix 6. The results are quite revealing even
though monthly reconciliations of broker activity with registry activity involve slight distortions to data. That
is because of T+3 settlements where a month of registry activity doesnt exactly coincide with a month of
ASX data. Nevertheless longer term comparisons convey a clear picture of what is occurring as summarized
in the following half yearly tables. Over an extended time frame, T+3 influences at the beginning and end of
the periods covered become insignificant because of the large volumes of data involved.
Institutional buying and selling is clearly a dominant feature of retail broker activity and accounts for in
excess of 50% of their activity during critical trading periods. The surplus calculation in the tables below
provide an indication of the extent of non-retail activity by comparing totals for surplus Buying & Selling
Estimates to totals for all ASX Buying & Selling.
6.5.4.10.2.1 RETAIL BROKER HALF YEARLY SUMMARIES FOR 2010: ASX Activity versus Client Registry Movements
ASX ACTIVITY REGISTER ACTIVITY SURPLUS TRADES SURPLUS
PERIOD BROKER SELLS BUYS OFF ON SELLS BUYS %
Jan to
June
2010
COMM 11,004,404 12,351,017 5,061,382 6,699,516 5,943,022 5,651,501 49.6%
ETRD 4,167,986 4,389,017 2,511,336 2,705,179 1,656,650 1,683,838 39.0%
AIEX 3,680,528 3,968,571 3,050,339 2,201,502 630,189 1,767,069 31.3%

Surplus Transactions
8,229,861 9,102,408

PERIOD BROKER SELLS BUYS OFF ON SELLS BUYS SURPLUS %
July to
Dec 2010
COMM 50,798,505 50,316,028 15,921,128 15,118,944 34,877,377 35,197,084 69.3%
ETRD 16,007,060 15,541,064 6,665,039 6,427,064 9,342,021 9,114,000 58.5%
AIEX 15,354,983 13,273,040 7,536,381 6,353,941 7,818,602 6,919,099 51.5%

52,038,000 51,230,183

The outstanding feature of trading by retail brokers from July to Dec 2010 was the 50+ million trades additional
to the retail orders that show on the register. The volatile period included the August resource upgrade, the
turbulent months that followed and culminated in M&G accumulating shares in Nov and Dec 2010.

Overall trading from July to Dec 2010 was also associated with 73+ million Wash Trades that have been
completely invisible to the market, many of which are likely to have originated within the ranks of retail
brokers. The trades are invisible because of the obfuscation that occurs with settlements and the fact that
many of the trades have been netted out and havent made it to the register. The trades did however manage
to influence prices and market sentiment.

The volumes involved and the invisibility of the trades is likely to represent an enormous manipulative
presence in the market that can only properly be evaluated via official audits of broker and client accounts
36

6.5.4.10.2.2 RETAIL BROKER HALF YEARLY SUMMARIES: 2011 & 2012

ASX ACTIVITY REGISTER ACTIVITY SURPLUS TRADES SURPLUS
PERIOD BROKER SELLS BUYS OFF ON SELLS BUYS %
Jan to
Jun 2011
COMM
6,227,654 7,200,986 3,616,136 4,305,501 2,611,518 2,895,485
41.0%
ETRD
3,292,782 2,146,721 2,625,757 1,743,542 667,025 403,179
19.7%
AIEX
2,409,801 2,540,977 1,643,027 2,142,950 766,774 398,027
23.5%

4,045,317 3,696,691

July to
Dec 2011
COMM 5,040,078 3,321,863 3,965,539 2,232,347 1,083,554 1,087,856 26.0%
ETRD 2,181,079 1,115,957 1,703,408 917,285 478,439 326,304 24.4%
AIEX 2,131,931 1,171,467 1,518,353 701,526 614,074 469,941 32.8%

2,176,067 1,884,101

Jan to Jun
2012
COMM 3,554,021 2,025,106 2,414,351 1,361,129 1,139,670 663,977 32.33%
ETRD 1,109,733 758,873 1,045,998 629,013 63,735 129,860 10.30%
AIEX 1,219,322 784,453 1,155,156 755,781 64,166 28,672 4.63%

1,267,571 822,509

The data suggests that the retail brokers are likely to have played a pivotal role in conducting large volumes
of trades anonymously for institutions and/or sophisticated investors during critical trading periods. It also
indicates that any institutional presence amongst retail brokers diminished immediately after M&G acquired
a significant stake at the end of 2010. The reduction in activity is particularly noticeable amongst
Commonwealth Securities who has been the most prominent broker in CDU trading.
The levels of surplus COMM trades were consistently above 45% in the months leading up to the Aug 18
resource announcement, then leapt to 80% during August. They continued at high levels (around 60%) in the
months Sept, Oct, Nov 2010 and then dropped back markedly once M&G had completed its on-market
buying campaign in early Dec 2010.

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2010 2011
M&G Buying
completed
Pre Aug 18
Level of Non-Retail Trades by Commonwealth Securities
Surplus Trades
Highly anomalous
37

6.5.4.10.3.1 NOVEMBER and AUGUST 2010 COMPARISONS
The trading data for the 3 leading retail brokers for November and August 2010 is summarized below.
NOV 2010 ASX ACTIVITY REGISTER ACTIVITY SURPLUS TRADES SURPLUS
BROKER SELLS BUYS OFF ON SELLS BUYS %
Leading
Retail
Brokers
COMM 9,262,322 8,721,779 3,572,703 3,082,741 5,689,619 5,639,038 63.0%
ETRD 3,863,538 3,191,153 1,599,557 971,233 2,263,981 2,219,920 63.6%
AIEX 2,905,025 2,481,544 1,712,457 940,863 1,192,568 1,540,681 50.7%

Surplus Transactions 9,146,168 9,399,639

AUG 2010 ASX ACTIVITY REGISTER ACTIVITY SURPLUS TRADES SURPLUS
BROKER SELLS BUYS OFF ON SELLS BUYS %
Leading
Retail
Brokers
COMM 26,084,613 27,680,628 5,259,096 5,454,178 20,825,517 22,226,450 80.10%
ETRD 6,709,009 7,276,407 1,935,527 2,006,295 4,773,482 5,270,112 71.80%
AIEX 5,996,952 5,537,259 2,404,036 1,814,563 3,592,916 3,722,696 63.40%

Surplus Transactions 29,191,915 31,219,258

The trades associated with the 3 leading retail brokers in August account for approximately 60% of the 50
million wash trades identified for the month. Together with the 9 million surplus trades in Nov 2010
(representing 56% of missing trades for Nov which was around 16 mill buys & sells) the activities of the 3
leading retail brokers would have provided an enormous foil for trading to be unfairly influenced from within
the ranks of leading retail brokers. The situation should perhaps ring alarm bells for regulators and to make
matters worse, the influence of institutional trading extends much further than the 3 leading retail brokers.

6.5.4.10.4.1 TRADING BY COMMONWEALTH SECURITIES Jan to Dec 2010 excluding August
The chart compares monthly ASX buying and selling to monthly retail settlements during 2010 with data for
August omitted. The differences in heights (between red & black and blue & grey), represent surplus trades
which in turn may represent trades done on behalf of institutions or wash trades by anonymous entities. The
extent of surplus trades on behalf of institutions and/or sophisticated investors is clearly evident.

The surplus trades during August amongst the 3 leading retail brokers approximate the trading by all
brokers during 2012 up until Jun 30 which totalled 33.7 million Sells and 33.7 million Buys.
Surplus trades by 3 retail brokers during a month that coincided with a significant accumulation campaign by
M&G. It was one of the rare on-market buying campaigns since the discovery was first made 5 years earlier.

0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
Jan Feb Mar Apr May Jun Jul Sep Oct Nov Dec
All COMM Selling
All COMM Buying
Retail Client OFF Movements
Retail Client ON Movements
ASX Activity
Registry Activity
COMM SUMMARY 2010 Excluding August
Level of Surplus Trades
Trading Volumes
2010
Sells
Buys
38

6.5.4.10.4.2 BROKER COMM TRADING FOR 2010 - including August
The impact of manipulative wash trades on trading was also a prominent feature of trading on Aug 18
(Refer Research Paper 4.1 Sect 4.8.1 & Sect 4.8.4) and the days and weeks that followed with
Commonwealth Securities likely to be responsible for a large majority of them. The impact of wash trades
on trading during August is dramatically highlighted when August data is also included with all other
months during 2010.

0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
COMM TRADING SUMMARY 2010 Including August
All COMM Selling
All COMM Buying
Retail Client OFF Movements
Retail client ON Movements
ASX Activity
Registry Activity
Trading Volumes, and
Retail OFF
movements
Extraordinarily anomalous
trading activity by COMM
deserving of an enquiry in
its own right
2010 Month by Month
Surplus
Sell Trades
Retail ON
movements
Surplus
BuyTrades
2010
Registry Volumes
The trading in Aug 2010 for the most part didnt represent shareholders selling in disappointment although that
did occur with the selling based more on confusion than anything else and with a lot of the selling forced
because of margin limits being triggered. There was confusion about how large quantities of copper didnt
seem to make it into resource calculations and confusion brought about by an orchestrated selling campaign
where large volumes of wash trades took prices dramatically lower and created adverse market sentiment.

Retail selling was a minor part of the trading activity that occurred within Commonwealth Securities during
August with retail registry movements representing just under 20% of the amount of ASX buying and selling
transacted by COMM. Also, retail interests within COMM were marginal net buyers, not net sellers during
August, as were the major institutions. The almost 80% of non-retail transactions occurring within
Commonwealth Securities in August, is likely to represent the tip of a very large iceberg of nefarious dealings
and suspect trading behaviours accompanying the resource upgrade announcement.

39

6.5.4.10.5.1 FURTHER TRADING SNAPSHOTS
The remarkable feature about COMM trading is that following the Aug 2010 JORC announcement and the
November 2010 accumulation of shares by M&G, volumes transacted by COMM reduced considerably.
During 2011 monthly buying & selling volumes rarely made it above 1.4 million shares whereas from Aug
through to November 2010 monthly volumes were well over 5 million shares.
Despite the reduced volumes during 2011, sophisticated investors maintained a presence in COMM albeit
to a lesser extent than previously. Their influence is represented in the chart below by the gaps between
COMM buying (blue) and the ON movements of retail clients (grey) and the gaps between COMM selling
(maroon) and the OFF movements of retail clients (black). The gaps or differences in height represent the
volume of trades that occurred that were separate to those of retail clients.

1

0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Jan Feb Mar Apr May June

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
COMM Broker Activity versus Registry Activity - 2011
Broker Activity
Registry Activity
OFF
ON
Buys
Sells
Retail selling has been the trend during all
of 2012 apart from June with daily volumes
generally subdued. Just over 1 million
shares were sold from the holdings of
COMM retail clients over the 6 month
period.

Sophisticated investors have nevertheless
retained a presence as per the surplus
trades in evidence (refer to the gaps
between red & black, blue & grey)

Data suggests that there has ben an ever
present but somewhat camouflaged
corporate influence operating from within
Commonwealth Securities over the entire
2.5 year period reviewed.
Voluntary
Suspension
2011
COMM Broker Activity versus Registry Activity - 2012
Net Retail
Selling Surplus
Broker sells
Volumes
2012
Volumes
40

6.5.4.10.6.1 A TWO AND A HALF YEAR TRADING SUMMARY FOR COMMONWEALTH SECURITIES

The following table summarizes COMM trading in the volatile months following the Aug 18 resource
announcement up until when M&G completed their buying in early Dec 2010. Although retail trading
volumes represent a substantial 12+ million buys and sells overall, the data nevertheless reveals that very
high levels of non-retail influences were responsible for the majority of trading.

ASX ACTIVITY REGISTRY DEALINGS SURPLUS TRADES SURPLUS
PERIOD SELLS BUYS OFF ON SELLS BUYS TRADES %
2.5 Years 76,624,662 75,215,000 30,978,536 29,717,437 45,646,126 45,497,563 60%
Aug 2010 26,084,613 27,680,628 5,259,096 5,454,178 20,825,517 22,226,450 80%
Sep, Oct, Nov 19,707,650 18,889,128 7,358,812 7,262,333 12,348,838 11,626,795 62%

Post JORC Totals
45,792,263 46,569,756 12,617,908 12,716,511 33,174,355 33,853,245 73%

0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
Jan - Jun
2010
Jul - Dec
2010
Jan - Jun
2011
Jul - Dec
2011
Jan - Jun
2012
COMM 30 Month SUMMARY
While it is perfectly legal for corporate
entities to co-mingle their orders amongst
the retail clients of Commonwealth Securities
the overwhelming dominance by such
entities combined with an absence of
transparency presents acute problems for the
integrity of the market.

The size of the problem:

Trading by COMM represents 18.6% of the
409+ mill shares that have traded on the ASX
between Jan 2010 and Jun 2012. The next
most dominant broker is DMG with only 8%.

COMM retail clients were responsible for
around 7.4% of all shares traded, which
leaves 11.2% of COMM activity servicing non
retail interests. The surplus activity alone
equates to more activity than any other
broker and yet the activities are opaque to
the market.

Also the extremely high level of cross trades
within COMMM (i.e.16.9 million over 30
months) gives rise to the possibility for
entities to be shorting stock within COMM
intraday and then scooping up retail orders
to cover positions as they become available
in the ensuing panic.

If not shorting, then holdings could be sold
down and then reclaimed from the market as
retail panic inevitably sets in. All such activity
would have been camouflaged from view and
may qualify as Wash Trades.

Non retail surplus
transactions
representing
institutional trades &
trades by other
sophisticated investors
many of which are
likely to qualify as
Wash Trades.
Extremely dubious
activity during the 2
nd

half of 2010!

Period Jan 2010 to Jun 2012
Trading & Registry
Volumes

The situation requires a forensic examination by auditors as the trading data is extremely suspicious given that
the market has failed to provide fair price discovery and that a cartel like trading monoply is clearly in evidence.
41

6.5.4.10.7.1 THE INSTITUTIONAL PRESENCE AMONGST RETAIL BROKERS
To recap, the trading of institutions within retail brokers represents a strong corporate presence in the
market that masquerades as retail activity but is likely to contribute to a substantial amount of institutional
share flows on the register. To a certain extent it represents an invisible presence in the market that has
had an extremely influential effect on trading as well as creating negative market sentiment.
The surplus trades identified of retail brokers and indeed all brokers are assumed to relate to institutional
transactions as the numbers are needed to reconcile the large volumes of institutional registry share flows
that have occurred. Based on retail disclosures on the register, the market shares of retail brokers as
summarized in table 6.5.4.2.1 together with the surplus trades quantified in table 6.5.5.2.1 can be split into
retail and institutional components to help clarify the dynamics of trading.
The results are as follows:

Broker Overall Market Share% Surpluses Broker Retail Component Institutional Component
COMM 18.60% 60% COMM 7.40% 11.20%
ETRD 6.20% 47% ETRD 3.30% 2.90%
AIEX 5.70% 43% AIEX 3.20% 2.50%
BELL 2.20% 53% BELL 1.00% 1.20%
SBAR 3.10% 69% SBAR 1.00% 2.10%
PSL 1.80% 75% PSL 0.40% 1.40%
MACP 1.50% 26% MACP 0.30% 1.20%
BBY 5.10% 79% BBY 1.70% 3.40%
TPPM 1.30% 66% TPPM 0.30% 1.00%

The splits can be used to more accurately compare how much market activity has been in support of retail
trading and how much has been in support of institutional interests.
The two aspects of trading of the retail brokers have been indicated for COMM as follows:

In the tables that follow brokers are ranked in terms of their market shares taking into account both retail
trades and other trades.
Also, in line with the potential for trading by CITI, MSDW and SBAR to be servicing the same institutional
clients and supportive of each others trading strategies because of their corporate connections (Refer Sect
6.5.4.9.1) they have been shown as a broker group for comparison against the influence of all other
brokers. (Refer Table 3).
As an affiliated group they emerge as the single most influential trading interest associated with the
trading taking place in CuDeco.
The tables reflect the following:
Table 1: A straight forward comparison of market share statistics based on information in
Section 6.5.4.2.1 that summarizes all ASX trading by brokers over 2.5 years.
Table 2: A comparison of broker market shares allowing for institutional and retail trading
undertaken by brokers. Some brokers such as DMG, CITI, & MSDW appear to be corporately
based without retail clients.
Table 3: A comparison taking into account retail and institutional components of broker trading
together with the possibility that CITI, MSDW and SBAR may be unified in their trading and
therefore need to be considered as a single and influential trading entity.

COMM: 18.6% COMM Ret: 7.4% and COMM Inst: 11.2%
Stripped of its retail trades COMM at 11.2% is revealed to be the largest corporate broker by a wide margin.
Retail components
of all trading over
2.5 years
Surplus trades
assumed to be mosrly
for institutions From 6.5.4.2.1
From 6.5.4.2.1
42

6.5.4.10.7.2 BROKER COMPARISONS

Table1: from Sect 6.5.4.2.1 Table2: allowing for retail & institutional trading Table3:
BROKER MARKET SHARES
BROKER MARKET SHARES FURTHER DEFINED INSTUTITIONAL INFLUENCE
OVER TRADING
INSTITUTIONAL RETAIL
COMM 18.6%

COMM Inst. 11.2%
COMM
Ret.
7.4%

CITI/SBAR/MSDW 12.9%
DMG 8.0% DMG 8.0% ETRD Ret. 3.3% COMM Inst. 11.2%
CITI 7.2% CITI 7.2% AIEX Ret. 3.2% DMG 8.0%
ETRD 6.2% UBS 5.4% BELL Ret. 1.0% UBS 5.4%
AIEX 5.7% SOSL 4.1% SBAR Ret. 1.0% SOSL 4.1%
UBS 5.4% MACQ 3.8% PSL Ret. 0.4% MACQ 3.8%
BBY 5.1% MSDW 3.6% MACP Ret. 0.3% BBY Inst 3.4%
SOSL 4.1% BBY Inst 3.4% TPPM Ret. 0.3% GS 3.0%
MACQ 3.8% GS 3.0% BBY BB 1.7% ETRD Inst. 2.9%
MSDW 3.6% ETRD Inst. 2.9%

CSUI 2.6%
GS 3.0% CSUI 2.6% Total 18.6% AIEX Inst. 2.5%
SBAR 3.0% AIEX Inst. 2.5%

MERL 2.3%
CSUI 2.6% MERL 2.3%
Note: BBY BB refers to
the company Buy Back
HUB24 2.0%
MERL 2.3% SBAR Inst. 2.1% SUSQ 1.8%
BELL 2.2% HUB24 2.0%

PSL Inst. 1.4%
HUB24 2.0% SUSQ 1.8%

INST 1.3%
SUSQ 1.8% PSL Inst. 1.4%

MACP Inst. 1.2%
PSL 1.8% INST 1.3%

BELL Inst. 1.2%
MACP 1.5% MACP Inst. 1.2%

TPPM Inst. 1.0%
TPPM 1.3% BELL Inst. 1.2%

D2MX 1.0%
INST 1.3% TPPM Inst. 1.0%

JPM 0.9%
D2MX 1.0% D2MX 1.0%

MORR 0.8%
JPM 0.9% JPM 0.9%

RBSM 0.6%
MORR 0.8% MORR 0.8%

ORDS 0.6%
RBSM 0.6% RBSM 0.6%

HART 0.6%
HART 0.6% ORDS 0.6%

CMCS 0.5%
ORDS 0.6% HART 0.6%

RBS 0.4%
CMCS 0.5% CMCS 0.5%

MINC 0.4%
FOST 0.4% RBS 0.4%

IMCP 0.4%
MINC 0.4% MINC 0.4%

FOST 0.4%
RBS 0.4% IMCP 0.4%

Other 2.9%
IMCP 0.4% FOST 0.4%

Other 2.9% Other 2.9%

Totals 100.0% Totals 81.5% Totals 18.60% Totals 81.5%

The broker trading data strengthens the view that institutions are behaving in a cartel like manner with
control over trading approaching 80% on the ASX as far as CuDeco is concerned, and with Dark Pool trading
thrown into the mix as well, the control over the register is even higher. Concerns about a cartel are
particularly relevant when the bulk of buying and selling amongst so many brokers all revolves around the
trading activities of just a few institutional shareholders.
The next section reveals that in over 2.5 years of trading, CuDecos 5 institutional shareholders have
controlled around 333.3 million OFF and ON movements on the register compared to around 409 million
buys and sells occurring on the on the ASX. They have been responsible for 70% of all registry movements.
To further accentuate cartel issues, 2 of the institutional shareholders have been responsible for 50.3% of
all institutional registry activity over the 30 month period and in the 1
st
six months of 2012 they have
accounted for around 70% of register movements in their own right.
By any measure, the trading data portrays a seriously lopsided and dysfunctional market in the trading of
CuDeco securities principally due to the activities of 2 institutions but supported by the actions of the
remaining 3 institutional shareholders. For an ASX200 company with close to 6,500 other shareholders the
situation is clearly unacceptable and the opposite to investor expectations regarding fair markets.
The broker network who are likely to have
facilitated the institutional dominance over trading
43

Section 5

INSTITUTIONAL REGISTRY ACTIVITY PERIOD
JANUARY 2010 to JUNE 2012

44

6.5.5.1.1 INSTITUTIONAL DEALINGS - PERIOD JANUARY 2010 to June 2012 (30 months)
The most influential trading entities regarding CuDeco are the major institutional shareholders led by their
fund managers. Their trading over the 2.5 year period reviewed has been characterized by extremely
elevated volumes compared to all other investors/traders. And despite the massive levels of trading churn
put through the market, their holdings have either been retained or added to. Remarkably, the 5
institutional shareholders dont seem to get in each others way with the large amounts of buying and selling
supplied to the market with stock freely passing back and forth both on-market and off-market. Their trading
very much takes on the appearance of a cartel dictating terms to the rest of the market and as such
questions of share price manipulation and the fairness of the market cannot be ignored.
The obvious co-operation that occurs between institutions is further brought into focus by the large holding
belonging to the M&G Group which is split amongst a number of funds as indicated in various substantial
shareholder notices. The various holdings have been distributed across 3 separate institutional shareholders
that provide custodial services for the shares. As custodians the institutions are usually mandated to buy
and sell shares for income generation. Buying and selling can therefore legitimately feature 3 institutions
distributing buying and selling orders across a range of brokers but where all orders effectively relate back to
interests associated with M&G. And of course M&G is not the only entity managed by institutions so that
the situation is repeated many times over. It represents a deceptive trading environment where many of the
orders put through the market by a large number of brokers effectively represent the same interests.
Institutional stock lending casts further doubt about the integrity of the market as it ensures downward
pressure on prices is continuously maintained despite the diminished portfolio values for the funds being
managed and whose shares have bent lent out to facilitate the short selling. Quite tellingly, regular major
adjustments to open short positions in relation to CuDeco have occurred off-market without price discovery.
There have also been serious discrepancies between the shareholdings of the major lenders and reported
open short positions where large increases (i.e. stock loaned out) and large decreases (i.e.; stock returned to
lenders) is not reflected in the shareholdings of lenders. High volume turnovers by institutions even when
the stock has been in voluntary suspension add further weight to arguments that trading lacks integrity.
A further market integrity issue is that institutional dealings cannot be easily reconciled with the brokers
acting for them. While analysis can guesstimate who the major brokers must be in acting for them it is simply
not possible to know the specifics of trading. The confusion results from broker trades done on behalf of
institutions being processed not by the broker but by a settlement specialist who takes no part in buying and
selling. By the time trades are settled the brokers responsible for the institutional buying and selling are
invisible to the market. The register lists changes to institutional shareholdings but they are referenced to
the ASTC participant who settles the transactions, not the actual brokers. On the other hand, retail trading
presents as the opposite extreme with their dealings completely transparent and with retail shareholders
and their brokers all identified on the register.
Research has used the transparent dealings of retail investors and worked backwards to establish the
quantities of broker trading left over (i.e.; surplus trades) that must be attributable to institutions based on
the share flows that have occurred on the register. The term retail broker is a misnomer because the reality
is that brokers can deal with both retail clients and institutional clients (and other corporate clients as well).
However where they tend to follow through and settle the transactions for their retail clients and their
corporate clients, dealings on behalf of institutions are always forwarded to 3rd party agents for settlement.
The volumes of institutional dealings can therefore be estimated by determining the number of retail trades
and the number of corporate trades from the register and then simply subtracting from the total number of
broker trades to reveal the levels of institutional trading activity.

Reconciling broker buying & selling back to the register over a period of two and a half years is therefore
able to reveal a lot about the structure of the CuDeco market and the dominance exercised by institutions.
The stranglehold over the market by institutions makes it likely that the functioning of the market has been
seriously compromised for the entire period reviewed.
45

6.5.5.2.1 RECONCILIATION OF BROKER BUYING & SELLING WITH THE REGISTER

Appendix 3 lists a summary of broker trading data and a list of registry transactions spanning 2.5 years of
trading. The registry data comprises ASX broker settlements and ASTC settlements where the former
generally represents retail and corporate clients, and the latter represents a mixture of retail clients,
corporate clients and institutional clients. But even so, institutional trading is by far the most prominent
feature of ASTC settlements.
The data has been summarized to align ASX broker buying & selling data with the corresponding
settlement data of their clients who in the main are either retail or corporate investors. Subtracting client
registry movements from the trading data of their brokers establishes the pool of surplus trades that are
likely to be forwarded to ASTC agents for settlement in favour of institutions.

ASX TRADES CLIENT REGISTRY MOVEMENTS SURPLUS TRADES
PID BROKER SELLS BUYS OFF ON SELLS BUYS %
1402 COMM 76,624,662 75,215,000 30,872,503 29,728,316 45,752,159 45,486,684 60.1%
2103 DMG 34,190,490 31,410,111 0 0 34,190,490 31,410,111 100.0%
2032 CITI 29,539,055 29,578,486 3,390 3,390 29,535,665 29,575,096 100.0%
6788 SOSL 16,814,844 16,903,003 1,269,866 1,261,636 15,544,978 15,641,367 92.5%
2992 MSDW 8,681,210 20,476,144 0 0 8,681,210 20,476,144 100.0%
1572 MACQ 15,655,957 15,284,159 1,330,007 1,175,337 14,325,950 14,108,822 91.9%
1123 BBY 13,682,619 28,222,106 0 14,086,521 13,682,619 14,135,585 66.4%
1442 ETRD 26,758,640 23,951,632 14,457,903 12,288,878 12,300,737 11,662,754 47.3%
3610 GSP 12,143,860 12,393,121 430,034 315,802 11,713,826 12,077,319 97.0%
1103 CSUI 10,246,191 10,861,565 0 0 10,246,191 10,861,565 100.0%
1505 UBS 24,255,420 20,098,239 12,102,466 12,054,101 12,152,954 8,044,138 45.5%
6386 AIEX 24,796,565 21,738,508 14,646,754 11,731,720 10,149,811 10,006,788 43.3%
3663 MERL 9,654,118 9,201,293 0 0 9,654,118 9,201,293 100.0%
3383 SBAR 12,519,913 12,195,335 4,414,928 3,366,702 8,104,985 8,828,633 68.5%
1382 HUB24 8,154,262 8,085,633 915,488 746,921 7,238,774 7,338,712 89.8%
6776 PSL 8,407,362 5,999,627 2,125,888 1,510,889 6,281,474 4,488,738 74.8%
1543 BELL 10,027,918 7,676,658 4,718,250 3,531,106 5,309,668 4,145,552 53.4%
2552 TPPM 5,460,667 5,187,700 1,242,800 1,044,032 4,217,867 4,143,668 78.5%
2893 D2MX 3,785,228 4,010,207 121,925 112,300 3,663,303 3,897,907 97.0%
1088 MORR 3,426,554 3,426,554 9,000 9,000 3,417,554 3,417,554 99.7%
2972 JPM 3,578,482 4,079,534 492,500 499,786 3,085,982 3,579,748 87.0%
6086 HART 3,171,051 2,016,787 806,160 167,466 2,364,891 1,849,321 81.2%
2442 MACP 6,468,903 5,523,062 4,940,836 3,903,787 1,528,067 1,619,275 26.2%
2702 RBS 1,423,961 1,489,695 311,557 269,745 1,112,404 1,219,950 80.0%
2338 ORDS 3,002,309 1,970,038 1,746,266 1,590,763 1,256,043 379,275 32.9%
5128 TAYL 923,100 947,650 137,100 114,369 786,000 833,281 86.6%
2662 CMCS 2,343,583 2,115,135 1,610,565 1,486,586 733,018 628,549 30.5%
2921 INTS 270,191 891,653 52,100 37,500 218,091 854,153 92.3%
4064 RBSM 3,124,511 1,561,750 1,999,009 1,652,835 1,125,502 -91,085 22.1%
4094 BRLL 629,626 676,890 146,400 187,265 483,226 489,625 74.5%
2982 SHAW 1,038,682 859,852 686,017 561,549 352,665 298,303 34.3%
1135 CAM 421,750 356,655 109,201 45,594 312,549 311,061 80.1%
6066 JDV 507,233 524,841 435,116 119,853 72,117 404,988 46.2%
1459 SCE 215,887 224,387 20,000 20,000 195,887 204,387 90.9%
1051 WBC 199,802 285,913 142,837 12,793 56,965 273,120 68.0%
1062 BRID 208,316 186,902 100,725 106,610 107,591 80,292 47.5%
6047 CARM 170,419 189,169 84,970 105,220 85,449 83,949 47.1%
7047 SHAD 752,130 311,713 622,374 306,131 129,756 5,582 12.7%
2025 BYS 74,028 76,590 19,224 25,200 54,804 51,390 70.5%
3113 BAIL 647,064 250,373 571,545 241,013 75,519 9,360 9.5%
3552 LDAL 113,271 47,960 56,165 50,100 57,106 -2,140 34.1%
3523 FWHT 79,344 52,270 59,844 42,120 19,500 10,150 22.5%
1027 EURO 82,314 122,613 59,300 120,613 23,014 2,000 12.2%

Sells Buys Sells Buys Sells Buys

384,271,492 386,676,513 103,871,013 104,633,549 280,400,479 282,042,964 73.0%

All ASX Broker
Buying & Selling
Retail and Corporate
Investor Clients
46

6.5.5.2.2 BROKERS WHO DONT SETTLE THEIR OWN TRADES
Separate to the previous list of brokers who all appear on the register along with their clients are a group
of brokers who buy and sell for a range of clients but who rely on 3
rd
party settlement agents for the
settlement of their transactions. The combined trading of these brokers represents a further 24.6 million
sells and 22.2 million buys that like the surplus trades previously identified are also camouflaged from the
market through the settlement process. Their trading activity on the ASX is summarized in the table below.
The clients of these brokers include retail, corporate and institutional investors but the majority are likely
to be institutions as that is where the majority of 3
rd
party settlements appear to end up.
PID CODE SELLS BUYS

PID CODE SELLS BUYS

PID CODE SELLS BUYS
SUSQ 9452 7,420,378 7,434,726

DAIW 3063 273,004 347,032

RBC 2542 216,741 35,641
INST 2172 5,405,076 5,221,925

GETCO 2292 215,151 215,230

ABNA 1193 19,680 22,748
FOST 1232 1,508,690 1,803,806

AUST 3074 599,721 158,540

NATO ? 6,748 19,761
MINC 2302 1,496,937 1,570,387

REYN #N/A 65,950 124,416

FTDT ? 6,028 14,453
IMCP 9512 1,498,323 1,460,734

OPTV 9232 113,431 122,035

EVAN 1471 271,717 10,175
STBG 6683 489,938 860,915

LODG 3292 713,239 120,453

PRES 2192 3,310 8,270
WILS 4125 939,798 572,850

CLSA 2212 288,788 85,025

CCZ 2493 15,000 5,000
PERSH 1791 1,004,670 493,094

BTIG 2452 376,565 76,565

IABL ? 0 616
TIMB 2382 479,886 452,584

CLSA1 2212 74,205 72,906

MOELIS 2111 385,884 0
ITG 3453 116,077 419,919

INCA #N/A 161,028 63,117

AGNT 6013 19,800 0
NAL 1291 343,672 390,685

KOKO 9532 61,018 42,209

MFGSA 1043 40,385 0
Sub Totals 20,703,445 20,681,625

Sub Totals 2,942,100 1,427,528

Sub Totals 985,293 116,664

Registry share flows for retail and corporate clients serviced by the above brokers and settled by ASTC or
ACH agents amounted to 11.2 million sells and 5.8 million buys. It leaves a further 13.4 million sells and
16.4 million buys as surplus trades likely to have been settled on behalf of institutions.
ASX TRADES SHAREHOLER REGISTRY MOVEMENTS SURPLUS TRADES
PID BROKER SELLS BUYS OFF ON SELLS BUYS %
OTHER As above 24,630,838 22,225,817 11,215,126 5,793,690 13,415,712 16,432,127 63.7%

6.5.5.2.3 SUMMARY
The two summaries are combined below to give an overview of trading and to draw attention to the gulf
that exists between transparent trading and opaque trading. The term transparent is used in the sense
retail investors, corporate investors and the company with its Buy Back are all connected to the brokers
responsible for their buying and selling so that a clear audit trail is evident. And opaque is used in the
sense that the trades that are forwarded to ASTC participants to be settled and which mostly represent
institutional trades, are not identifiable with the brokers responsible for them.

OVERALL SUMMARY

ASX TRADES
SHAREHOLER REGISTRY
MOVEMENTS
SURPLUS TRADES
Table 6.5.5.2.1 384,271,492 386,676,513 103,871,013 104,633,549 280,400,479 282,042,964 73.0%
Table 6.5.5.2.2 24,630,838 22,225,817 11,215,126 5,793,690 13,415,712 16,432,127 63.7%

TOTALS 408,902,330 408,902,330 115,086,139 110,427,239 293,816,191 298,475,091 72.4%

SELLS BUYS
24,630,838 22,225,817

TOTALS

Transparent Dealings Opaque Dealings
Effectively 72.4% of trading taking place is camouflaged by the settlement process where the linkages
between the active brokers in the market and the trading entities initiating the trades are removed. It
makes it virtually impossible to monitor what is taking place without the official auditing of accounts.

47

The vagueness associated with official reporting represents a serious breach of system integrity,
particularly given that the non-retail activity of brokers has had a very major impact on shaping the CuDeco
market. The issues become even more acute when the dominant non-retail influence associated with the
293 million sells and 298.5 million buys identified in Section 6.5.5.2.3 is traced back to just 5 institutional
shareholders.
6.5.5.3.1 INSTITUTIONAL TRADING ISSUES
The fragmentation of institutional orders and their distribution to the majority of brokers who actively
trade CuDeco, followed by the camouflaging of broker details through ASTC agents taking over settlement
duties, provides enormous scope for institutional fund managers to unfairly influence pricing outcomes. It
would appear that fund managers are able to travel under the radar of both the systems gatekeepers and
the investing public with virtually a free reign to impose their trading agendas over the market. Two and a
half years of data clearly demonstrates the influence they have had with their trading strongly resembling
the actions of a cartel dictating terms to the rest of the market. Also evident from the data is an absence of
regulatory oversight in the face of glaring trading anomalies as the anomalies have persisted for an
extended period of time and still occur in daily trading.
The key trading issue is not that lots of brokers buy and sell under instructions for institutions but the fact
that the same entities by issuing so many orders that effectively cancel each other out are engaging in non-
genuine buying and selling and are likely to be rigging and distorting the markets bidding system while doing
so. The weight of buying & selling able to be generated by institutional fund managers means that market
forces are easily overcome in favour of institutional trading objectives and yet with all of their trading activity
their holdings are retained and/or added to. The obvious support for each other in the market amounts to
collusion and constitutes a reprehensible situation given the requirement for fair markets.
6.5.5.3.2 INSITUTIONAL FUND MANAGEMENT ISSUES
Investment funds placed within an institutional omnibus account are passive investments and rely on a
manager to make the buying and selling calls. The fact that the funds are under management suggests that
they are there for the longer term yet the reality is that the institutional shareholdings are the most
vigorously traded holdings on the CuDeco register. The trading has had by far the most influential impact
on the share price of any holder or any other group yet the over trading and the active shorting of CuDeco
would have resulted (at least on paper) in a very substantial capital depreciation in holdings over the 30
month period. It is an important point as the trading behaviours may not be motivated by the traditional
profit motive that is mandatory with most investment strategies and one of the reasons we have markets
in the first place. Trading by institutions may in fact be taking into account big picture corporate
incentives and fund management incentives as well, with the former necessarily bringing with it issues
related to share price manipulation and the latter raising issues of propriety in the management of funds
that have been entrusted to them.
Importantly, in terms of profit considerations, the churning activity of institutions takes on the appearance
of a zero sum game. A range of brokers effectively buying and selling shares to each other from the same
shareholdings cant all make profits. The losses of some would represent the profits of others and over
time maybe they take it in turns profiting from trades. However, it could well be that achieving control over
the market is at times a more useful activity than achieving profitable trades, and such thinking may even
lead to a tolerance for loss making trading strategies.
Institutions are actually well placed to pursue loss making trading initiatives with funds under management
fully capable of wearing any losses. Also the tolerance for loss making trading is quite prevalent in modern
markets so the suggestion is not as strange as it might first appear. A prime example is found with
institutions lending their shares knowing that lower prices will result from the short selling that they
facilitate. Along the same line of thinking share price suppression may help certain entities acting through
institutions to pick up large tranches of shares cheaply either from the market itself or directly from the
48

company through placements. A companys share price is universally held up as the final arbiter of value
when funding discussions take place so a low share price can actually be a good bargaining chip for entities
seeking strong exposure to a company and its projects. Trading activity that can pressure a share price may
even make good corporate sense if the activity is able to travel under the radar and not attract concerns
relating to share price manipulation - even though essentially that is what it is. Such thinking is actually
supported by historical precedent where entities being prosecuted or fined or even questioned on the
basis of share price manipulation appear to be extremely rare events.
6.5.5.3.3 IMPLICATIONS FOR CuDECO
In line with the above observations, the CuDeco share price has been constantly kept under pressure and
at undervalued levels and has been forced substantially lower coinciding with key milestones and
coinciding with the company entering funding discussions. There have also been occasions where the price
has been strongly controlled while large numbers of shares have been accumulated. The situation is
unacceptable particularly in view of the broad based data trends that reveal unorthodox trading activity
and where it should be a straight forward matter to identify and assess the reasonableness and intent of
trading strategies and to take action where manipulative activity is obviously on display.

6.5.5.4.1 SUMMARY OF BROKER & REGISTRY DATA
Total broker activity over the 30 months reviewed came to just under 409 million sales and 409 million
purchases. The break up between brokers trades and how they translated to the register is as follows:
Broker Activity Description Transparent Registry Activity
Transparent Trades
103.9 M Sells & 104.6M Buys
Retail Entities, Corporate Entities and
the Company Buy Back. Ref 6.5.5.2.1
OFF
103,871,013
ON
104,633,549
(as noted on the register against the brokers responsible for the buying & selling)

Non Transparent Trades
24.6M Sells & 22.2M Buys
Retail and Corporate Entities, Ref 6.5.5.2.2
Transparent Registry Activity
11,215,126 OFF and 5,793,690 ON

Non Transparent Trades
293.8M Sells & 298.5 M Buys
Broker Trades forwarded to ASTC Agents for
settlement in favour of Retail, Corporate &
Institutional Entities. Ref 6.5.5.2.3
Non Transparent Registry Activity
293,816,191 OFF & 298,475,091 ON
Part of ASTC Settlements which totalled
323.7 M OFF & 329.5 M ON

408.9M Sells & 408.9M Buys TOTALS 408,902,330 408,902,330

The trades identified in Category A and Category B above all appear on the register accompanied by the
brokers responsible for the trades.

The broker trades identified as surplus trades in Category C above generally show up in ASTC registry
listings although all dont make a smooth transition to the register. Many of the surplus trades are actually
wash trades as brought to attention in Research Paper 6.4 Section 6.4.2.8, and as Wash Trades they dont
actually flow through to the register. A further complicating factor is the fact that many ASTC settlements
also take into account trades taking place Off-Market away from the ASX (i.e.; the so called Dark Pool
trades). Such trades add to registry volumes compensating for the losses because of Wash Trades.

ASTC registry dealings therefore are complicated to assess but the end result has been for total ASTC
settlements amounting to 323.7 million OFF movements (sales) and 329.5 million ON movements
(purchases) comprising the surplus trades identified and Dark Pool off-market activity.

A.
B.
C.
49

6.5.5.4.2 ASTC SETTLEMENTS
The complete breakdown of ASTC settlements over the 2.5 years of trading reviewed is provided in the
following table. Settlements corresponding to institutional shareholdings have been shaded.

PID OFF ON

PID OFF ON

PID OFF ON
20005 13,544,264 8,800,260

20120 13,950 9,950

21034 362,751 318,071
20006-qic 937,401 350,095

20131 170,561 41,007

21104 6,336,926 9,544,966
20006 99,615,532 99,639,309

20152 551,003 662,157

21119 212,252 133,614
20006-uni 51,646 3,739

20306 384,975 218,510

22123 521 15,642
20007 3,267,466 1,801,950

20311 1,000 0

22888 618,144 350,183
20018 124,057,631 123,075,068

20367 341,714 344,293

23005 1,981,354 1,506,513
20021 648,113 240,595

20404 104,563 1,210

27048 342,768 199,568
20039 15,000 20,500

21003 187,420 206,723

27050 3,609 44,037
20054 2,065,455 1,000,851

21003 11,071 9,825

20057 41,790,414 45,563,226

21008 7,248,773 6,556,357

20068 46,800 31,100

21019 1,277,410 1,043,481

20082 132,775 15,473

21028 193,136 154,919

20104 14,242,707 25,724,883

21030 2,955,575 1,855,969

TOTALS 323,714,680 329,484,044

The over riding trend with ASTC settlements is for institutional shareholders to be the main recipients of
share flows, and by a very wide margin. The breakdown of all ASTC settlements over the 30 month period
was as follows:

Retail Entities 9,736,180 6,203,138
Corporate Entities 14,391,026 10,933,194
Institutions 299,587,474 312,347,712
Total ASTC Settlements 323,714,680 329,484,044

Institutional shareholders account for around 94% of all ASTC settlements. Individually, the institutions
would represent formidable traders in their own right and would wield significant impact over the market
however the synchronized trading that has taken place between them of (i.e.; the facilitation of trades
back and forth between each other both on-market and off-market) would magnify their impact on the
market very substantially. It also raises the serious cartel conduct/market fixing type issues that require
vigorous investigation as the spurious dealings in relation to CuDeco are likely to be repeated across the
entire ASX.
Category C surplus trades as per Table 6.5.5.4.1 therefore contribute to ASTC settlement registry numbers
as follows.

Surplus Trades as Summarized Previously 293,816,191 298,475,091 (Ref: Table 6.5.5.4.1)
Wash Trades as Previously Estimated 87,081,032 89,077,916 (Ref: Paper 6,4 Sect 6.4.2.8)
Net Surplus Trades 206,735,159 209,397,175

Net Surplus Trades 206,735,159 209,397,175
Dark Trade Estimates 116,979,521 120,086,869 (Ref: Paper 6,4 Sect 6.4.2.10)
Total Trades Settled by ASTC Agents 323,714,680 329,484,044

The data strongly suggests that any failure by the market in being able to provide fair price discovery in the
trading of CuDeco Securities is likely to be the direct result of institutional fund managers flooding the
market with non-genuine orders. Their level of dominance over all trading is certainly incompatible with a
market system that is meant to operate fairly, genuinely and with integrity.
The vast majority of ASTC
settlements have been in
favour of institutions
Less
Giving:
Then,
plus
Results in
50

6.5.5.5.1 LEADING BROKERS REGARDING INSTITUTIONAL BUYING and SELLING
The brokers likely to be providing the bulk of institutional buying and selling are again summarized below.
Analysis of leading brokers was previously done in Sect 6.5.4.10.7.2. The list is based on the numbers of
surplus trades identified over and above retail and corporate client orders.
PID BROKER Surplus Sells Surplus Buys Surplus % Totals
1402 COMM 45,752,159 45,486,684 60.1% 91,238,843
2103 DMG 34,190,490 31,410,111 100.0% 65,600,601
2032 CITI 29,535,665 29,575,096 100.0% 59,110,761
6788 SOSL 15,544,978 15,641,367 92.5% 31,186,345
2992 MSDW 8,681,210 20,476,144 100.0% 29,157,354
1572 MACQ 14,325,950 14,108,822 91.9% 28,434,772
1123 BBY 13,682,619 14,135,585 66.4% 27,818,204
1442 ETRD 12,300,737 11,662,754 47.3% 23,963,491
3610 GSP 11,713,826 12,077,319 97.0% 23,791,145
1103 CSUI 10,246,191 10,861,565 100.0% 21,107,756
1505 UBS 12,152,954 8,044,138 45.5% 20,197,092
6386 AIEX 10,149,811 10,006,788 43.3% 20,156,599
3663 MERL 9,654,118 9,201,293 100.0% 18,855,411
3383 SBAR 8,104,985 8,828,633 68.5% 16,933,618
1382 HUB24 7,238,774 7,338,712 89.8% 14,577,486
6776 PSL 6,281,474 4,488,738 74.8% 10,770,212
1543 BELL 5,309,668 4,145,552 53.4% 9,455,220
2552 TPPM 4,217,867 4,143,668 78.5% 8,361,535
2893 D2MX 3,663,303 3,897,907 97.0% 7,561,210
1088 MORR 3,417,554 3,417,554 99.7% 6,835,108
2972 JPM 3,085,982 3,579,748 87.0% 6,665,730
6086 HART 2,364,891 1,849,321 81.2% 4,214,212
2442 MACP 1,528,067 1,619,275 26.2% 3,147,342
2702 RBS 1,112,404 1,219,950 80.0% 2,332,354
2338 ORDS 1,256,043 379,275 32.9% 1,635,318
5128 TAYL 786,000 833,281 86.6% 1,619,281
2662 CMCS 733,018 628,549 30.5% 1,361,567
2921 INTS 218,091 854,153 92.3% 1,072,244
4064 RBSM 1,125,502 -91,085 22.1% 1,034,417

Separate to the above list of leading institutional brokers are the brokers who dont settle their own trades
and forward them to ASTC agents and/or ACH agents who in turn generally settle heavily in favour of
institutions. Some of the following brokers may therefore have also made significant contributions to
institutional buying and selling.
BROKER PID Surplus % Surplus Sells Surplus Buys Totals
SUSQ 9452 100.0% 7,420,378 7,434,726 14,855,104
INST 2172 100.0% 5,405,076 5221,925 10,627,001
FOST 1232 100.0% 1,508,690 1803,806 3,312,496
MINC 2302 100.0% 1,496,937 1570,387 3,067,324
IMCP 9512 100.0% 1,498,323 1460,734 2,959,057
PERSH 1791 100.0% 1,004,670 493,094 1,497,764
TIMB 2382 100.0% 4,79,886 452,584 932,470
LODG 3292 100.0% 7,13,239 120,453 833,692
NAL 1291 100.0% 343,672 390,685 734,357
DAIW 3063 100.0% 273,004 347,032 620,036
ITG 3453 100.0% 116,077 419,919 535,996
WBC 1051 100.0% 199,802 285,913 485,715
BTIG 2452 100.0% 376,565 76,565 453,130
GETCO 2292 100.0% 215,151 215,230 430,381
MOELIS 2111 100.0% 385,884 0 385,884
CLSA 2212 100.0% 288,788 8,5025 373,813
EVAN 1471 100.0% 271,717 1,0175 281,892
RBC 2542 100.0% 216,741 35,641 252,382
OPTV 9232 100.0% 113,431 122,035 235,466
The leading role by COMM
dispels the popular
misconception that it functions
mainly as a retail broker.

COMM is clearly the largest
institutional broker and by a
very wide margin.

Put another way, an extremely
large amount of institutional
business is conducted behind
the camouflage afforded by
COMMs large retail client base.
An assessment of who Fosters
have been dealing for would
assist greatly in understanding
their spurious report released
immediately after the Aug 18
resource upgrade was
announced which called for
$1.20 when their previous
advice to the market was a
valuation of $9.60
51

6.5.5.6.1 REGISTRY BREAKDOWN FOR 30 MONTHS OF TRADING
The entire registry breakdown for the 30 months of trading is as follows. The data excludes placement shares.
ASX Broker Settlements

OFF ON NET
Retail Entities 96,185,709 79,351,896 -16,618,813
Broker Nominees 66,464,866 65,740,808 -724,058
Corporate Entities 18,809,798 16,988,822 -1,820,976
CuDeco 90,632 14,086,521 13,995,889

Sub Totals: 181,551,005 176,168,047 -5,167,958

ASTC Settlements
Retail Entities 9,736,180 6,203,138 -3,533,042
Institutions 299,658,977 312,001,833 12,342,856

Sub Totals: 323,786,183 329,138,165 5,351,982

Total Registry Activity 505,337,188 505,306,212 184,024

Combining broker based registry summaries and ASTC based registry summaries under the various
shareholder categories provides the following overview of trading. Broker Nominees are viewed as
facilitating settlements for short selling and short covering transactions and not representing share flows
denoting ownership changes. They have therefore been excluded from data reflecting ownership changes.

Again, the single most prominent feature over the 30 months reviewed is the dominance over trading by
the relatively small number of institutional shareholders.
A summary of institutional trading including shares accumulated through placements is provided in the
table that follows.
Note: ANZ Nominees ceased trading in Oct 2010 following the August 2010 resource upgrade with the bulk
of its holding then crossed to JP Morgan Nominees which commenced trading in its own right at the same
time.

30 MONTH REGISTRY SUMMARY
Shareholder Category OFF ON NET

TOTALS
%
Retail Entities 105,921,889 85,555,034 -20,151,855

191,476,923 21.8%

61,122,840 7.0%
CuDeco 90,632 14,086,521 13,995,889

14,177,153 1.6%
Institutions 299,658,977 312,001,833 12,342,856

611,660,810 69.6%
Sub Totals 438,872,322 439,565,404 908,082

878,437,726 100.0%
Broker Nominees 66,464,866 65,740,808 -724,058

Full Totals 505,337,188 505,306,212 184,024

52

6.5.5.6.2 INSTITUTIONAL TRADING ACTIVITY: Summary
ENTITY
Holding as at
Jan 1
st
2010
OFF ON NET
Holding as at
Jun 29
th
2012
ANZ NOMINEES 4,744,004 13,544,264 8,800,260 -4,744,004 0
CITICORP NOMINEES 2,080,124 124,057,631 123,164,692 -892,939 1,187,185
HSBC CUSTODY NOMINEES 5,078,071 69,493,625 83,845,779 14,352,154 19,430,225
J P MORGAN NOMINEES 3,397,855 14,242,707 32,475,648 18,232,941 21,630,796
JP MORGAN NOMINEES 0 6,502,897 31,023,093 24,520,196 24,520,196
NATIONAL NOMINEES 5,145,784 99,615,532 99,639,309 23,777 5,169,561

The trading data is brought more clearly into perspective by removing placement shares and reversing the
rebalancing of holdings that occurred between some institutional holdings through off-market crossings in
Jan 2011. The following table more closely portrays the impact of their trading in the market and Dark Pool
exchanges, and forms the basis of the graphs that follow.
ENTITY OFF ON NET
ANZ NOMINEES 13,544,264 8,800,260 -4,744,004
CITICORP NOMINEES 124,057,631 123,164,692 -892,939
HSBC CUSTODY NOMINEES 41,695,946 45,171,064 3,475,118
J P MORGAN NOMINEES 14,242,707 25,681,542 11,438,835
JP MORGAN NOMINEES 6,502,897 9,544,966 3,042,069
NATIONAL NOMINEES 99,615,532 99,639,309 23,777
TOTALS 299,658,977 312,001,833 12,342,856

Citicorp Nominees and National
Nominees have achieved extraordinary
levels of symmetrical trading churn
for marginal net changes, while other
institutional shareholders have
churned large quantities of stock with
a bias towards accumulation.

Institutions
1
2
3
4

1,2, & 3
Citicorp
National
HSBC
Non Institutions
ANZ
JP Morgan
DOMINANCE OVER THE REGISTER BY CuDECOs INSTITUTIONAL SHAREHOLDERS
REGISTRY SHARE FLOWS ASSOCIATED WITH 2.5
YEARS OF TRADING
30 Month Registry Activity
Summary
1. Retail 21.8%
2. Corporate 7.0%
3. CuDeco 1.6%
4. Institutions 69.6%

KEY

Holdings as at Jan 1, 2010
20,445,838 shares
(14.8% Ownership)

Holdings as at Jun 30, 2012
71,698,305 shares
(38.3% Ownership)
Jan 2010 Jun 2012
Placements + 39.2 M
Trading + 12.2 M
Accumulation
OFF ON
438,800,819 439,011,283

OFF ON
67,874,628 68,022,177

53

6.5.5.6.3 COMMENT
The strong corporate positioning that has obviously taken place behind the scenes over the 2.5 years of
trading reviewed is somewhat paradoxical given the poor market sentiment associated with:
A resource portrayed in the financial media as dubious and/or confusing;
A persistently languishing share price, and;
Perennially negative views upheld in the media, brokerage houses and on public forums irrespective
of operational gains made by the company and emerging fundamental value.
While contradictions about company value, the attractiveness or otherwise of Rocklands, the future
prospects of the company etc. etc. can be debated both subjectively and endlessly, and they have been, the
two constants that remain and which can be conclusively demonstrated are:
Extensive trading data anomalies resulting from the trading by sophisticated investors spanning two
and a half years of trading, and;
Increasing corporate ownership by the institutions trading the stock where combined holdings have
increased from 14.8% to 38.3% over the same period and to 51% if the passive holding (i.e. a non-
trading holding) of new major investor New Apex Asia is also considered.
The situation represents an extraordinary accomplishment in achieving such high levels of increased
ownership without impacting the share price and as such may be demonstrating how corporate assets are
rendered cheap and acquired by stealth while a companys share price is managed through manipulative
trading strategies.
If so then the behaviours are officially sanctioned as regulators have to date approved the trading and have
been disinclined to pursue what can only be regarded as highly dubious trading practices. Practices that
have delivered an effective trading monopoly over the market and raised serious integrity issues about the
markets ability to function in the manner expected of it.
54

6.5.5.7.1 CITICORP NOMINEES AND NATIONAL NOMINEES
The issues of share price manipulation and/or cartel activity are given further prominence by the dominant
trading profiles of Citicorp Nominees and National Nominees over the 2.5 year period.

Entity

Shares Owned
Jun 29, 2012
Ownership of
Company
Market Share of all
Registry Activity
Citicorp Nominees 1,187,185 0.63% 28.2%
National Nominees 5,169,561 2.75% 22.1%
Total 50.3%

The trading by the 2 entities represents an incredible accomplishment but it comes with extremely worrisome
implications regarding the fairness of the market for all other participants over the period.
The dominance and control over the market by CuDecos 5 institutional shareholders as demonstrated by
them being responsible for 70% of all buying and selling over 2.5 years of trading is the single most worrisome
feature of trading. It is made infinitely worse by a situation where just two entities have controlled 50% of the
entire market in their own right. The characteristics of cartel behaviour are clearly in evidence.
The control over the market escalated following the release of a resource upgrade on Aug 18, 2010. It resulted
in a major market shakeup which allowed the opportunity for the M&G Group to step in and secure a cheap 10
million share placement in Oct 2010 and to conduct an on-market buying campaign during Nov & Dec 2010.
From Jan 2011 the escalation in the control over trading by the 5 institutions continued with control extending
to 85% of all trading in the first 6 month of 2012 as shown.

Citicorp Nominees National Nominees TOTALS
Period OFF ON Market Share OFF ON Market Share 2 Entities All 5
2010 Pre-JORC
25,341,495 24,668,544 27% 16,943,994 16,498,938 18% 45% 66%
2010 Post-JORC
38,966,199 38,961,495 25% 24,447,238 25,887,114 16% 42% 64%
2011 29,663,529 29,951,014 24% 38,133,397 37,956,716 31% 55% 71%
2012-6 months 28,777,948 28,250,156 42% 19,684,710 19,130,687 29% 70% 85%
TOTALS 122,749,171 121,831,209 28% 99,209,339 99,473,455 22% 50.3% 70%

The increased instutional control over trading following M&G acquisitions late Dec 2010 has been
accompanied by an escalation in off-market activity referred to as Dark Pool Trading as shown below. The
period following the resource announcement witnessed a share price collapse as institutional brokers flooded
the market with non genuine selling and buying much of which didnt impact the register (i.e.; Wash Trades).
Genuine selling was restricted to retail investors who were either panicked or margined out of their holdings.
To highlight the highly irregular volumes of Wash Trades and Dark Trades that have occurred and to put
matters into perspective, anomalous share flows have been compared to all registry share flows of
shareholders and also to total ASX volumes of buying & selling.
Pre JORC JORC Post JORC
Dark Trades & Wash
Trades Compared to:
Jan to May
2010
Jun & Jul
2010
Aug 2010
Sept
2010
Oct & Nov
2010
Dec 2010 to
Dec 2011
Jan to Jun
2012
Registry Volumes 29% 45% 119% 41% 45% 35% 51 %
ASX Volumes 22% 81% 54% 70% 31% 48% 103 %

Two entities have
controlled more than
half of all trading over a
30 month period
Citicorp Nominees and National Nominees controlled 70% of all registry activity in the first half of 2012, and
together with the other 3 institutions they controlled 85%. Such cartel like levels of control over an ASX200
company with 7500+ other shareholders is clearly breaching principles of fair trading. Their high volumes of non
genuine churn based trading has also facilitated the accumulatiion of cheap shares from retail investors many of
whom have sold in frustration at a share price being prevented from reflecting strong gains made by the company.

The control of 50.3% of all share flows over a 2.5 year period further reveals their strong monopoly over trading.

Wash Trade Stats
Increasing Dark Trade Activity
Dark Trades Stats
55

6.5.5.7.2 COMPARISON TO OTHER TRADERS
The high levels of trading volumes generated by Citicorp Nominees and National Nominees and their
almost perfect symmetry in terms of quantities of shares bought and sold provide an immediate sign that
something quite peculiar is playing out with their trading. They certainly suggest a level of trading
wizardry not normally associated with genuine buyers and sellers acting independently in fair and orderly
markets where large amounts of buying and selling have a significant impact on prices.
Comparison to other leading corporate entities trading CuDeco over the 30 month period further helps to
put the dominance of institutions into perspective.

CORPORATE ENTITY OFF ON

INSTITUTION OFF ON
BRISPOT NOMINEES 11,687,946 11,945,836

ANZ NOMINEES 13,544,264 8,800,260
JERSEY INVESTMENTS 2,734,878 2,614,878

CITICORP NOMINEES 124,057,631 123,164,692
COGENT NOMINEES 2,621,551 1,845,987

HSBC CUSTODY NOMINEES 41,695,946 45,171,064
EQUITY TRUSTEES 2,065,455 1,000,851

J P MORGAN NOMINEES 14,242,707 25,681,542
UBS WEALTH 1,316,362 1,102,163

JP MORGAN NOMINEES 6,502,897 9,544,966
VALDARNO P/L 726,248 1,018,607

NATIONAL NOMINEES 99,615,532 99,639,309
ASGARD CAPITAL 666,371 674,991

OTHERS 10,322,645 20,805,224

TOTALS 33,291,456 42,008,537

TOTALS 299,658,977 312,001,833

Counting JP & J P Morgan Nominees and ANZ Nominees as one group as the two Morgan groups are
obviously affiliated and ANZ Nomine crossed the bulk of its shares to JP Morgan Nominees when it ceased
trading, each institution in their own right eclipses all corporate activity. If they have been affiliated with
their trading and acting as a cartel as the trading data suggests, then the collective influence over all
trading by the 5 institutions can only be described as massive.
Also, some of the corporate trading suggests affiliations back to institutions as well which would potentially
increase the influence of institutions further. For example Brispot Nominees is connected to broker UBS
Securities who is involved in settlements far exceeding their buying and selling profile in the market and
suggesting that they are working closely with major institutional interests.
i.e.; UBS settlements have totalled 99.4 million OFF movements and 99.7 million ON movements on behalf
of unknown clients while as a broker they have only put 24.3 million sells and 20.1 million buys through the
ASX market of which their only significant client Brispot Nominees accounts for about half. The remainder
presumably represent institutional trades settled by ASTC agents.
The numbers certainly signify the strong ties between the trading of Brispot and the dealings of UBS
Securities which extend to institutions through the large settlement involvement of UBS Securities. The
opaque behind the scenes dealings certainly dont ease concerns regarding share price manipulation
The ease with which shares have passed back and forth between the most sophisticated investors in the
market place over such a long period of time provokes deep suspicion. Simply because there are no
friends in finance unless there are strong mutual benefits involved from co-operation. Usually, large
volumes of genuine selling places share prices under pressure, and similarly, large volumes of genuine
buying causes strong price re-ratings.
The cosy trading relationships that support high volumes of trading churn and seemingly without a profit
motive because of the zero sum game nature of such activity, are therefore highly dubious. While there is
an argument that the ready accommodation of buying and selling demonstrates strong liquidity it may also
be demonstrating share price manipulation given that the share flows are effectively back and forth
between affiliated parties with control over prices that have cost retail investors very considerable
amounts of money.

56

The extensive role that Dark Pool trading has played adds further to suspicions about prices being
maintained under pressure on the ASX with selling to trading partners leading to lower prices - with the
shares retrieved off-market through Dark Pool exchanges - without an impact on prices. It is about the only
explanation that makes sense of the incongruous volumes of shares being exchanged off-market. (Refer
Dark Trade anomalies, Research Paper 6.4 Sect 2)
Any attempt to assess what is taking place with trading at least needs to take into account the following
established trends:
Extraordinary levels of dominance over trading by a small number of institutional shareholders;
A share price that collapsed following a confusing resource statement and has remained capped for long
periods of time since, despite dramatic gains in the operational strength of the company and positive
clarifications about the resource;
A persistent undervaluation of the company compared to its peers and to likely project economics;
A share price that has failed in its role of fair price discovery as demonstrated by the company
capitalizing on cheap prices through extensive Buy Back programs, by consistently raising funds at
strong premiums to the share price, and by having a major supplier willingly take shares at a premium in
lieu of a substantial payment for services provided, and;
Institutions reflecting strong growth in ownership of the company through on-market buying and
through company placements, despite their extensive stock lending, short selling and price capping
activity.

6.5.5.8.1 A MONTH BY MONTH REVIEW OF INSTITUTIONAL TRADING
The share price performance of the company belies what is happening behind the scenes both corporately
and operationally, making share price manipulation a compelling argument to explain chronic data
anomalies. The case for collusion is also brought more strongly into focus by observing the trading
synergies between Citicorp Nominees and National Nominees as reflected by monthly trading data.
By way of example, the trading of institutions during Jan 2010 is summarized below where Total
Movements (i.e.; Movements ON and OFF the register) have been used for comparative figures.
The involvement of Citicorp Nominees equated to 48% of all institutional activity for the month, and the
involvement of National Nominees equated to 11% as shown.
JAN 2010 OFF ON
ANZ Nominees
867,738 303,195
Citicorp Nominees 1,308,460 1,243,859
National Nominees 406,193 165,854
HSBC Nominees 344,684 559,093
J P Morgan 0 65,749

Totals 2,927,075 2,337,750

Monthly data for Citicorp Nominees and National Nominees has been summarized for all months over the
2.5 years reviewed. Refer Appendix 4.
In the chart that follows, combined market shares above 60% have been highlighted by shading to indicate
the periods where they have been the main drivers behind institutional control over the market.

Citi % =(1.31 + 1.24) million (2.93 + 2.34) million * 100 48%
Nat % =(0.41 + 0.17) million (2.93 + 2.34) million * 100 11%

Market Share Calc.
Combined, their market share of institutional trading was 59%
57

As well as showing the impact that Citicorp Nominees and National Nominees have had within the group of
institutions, their impact on trading compared to the rest of the market has also been tabulated. Combined
market shares in excess of 50% of all trading have also been shaded.
Finally, the combined market share of all 5 institutions has been provided to demonstrate the consistent
levels of control they have exercised over the entire market on a monthly basis for at least the 2.5 years
covered by research. Levels of control over 50% of the entire market have been highlighted as well.

SHARE OF ALL INSTITUTIONAL TRADING

INSTITUTIONAL SHARE OF ALL TRADING

CITICORP NATIONAL 2 Combined Leading 2 Institutions only All 5 Institutions
2
0
1
0

Jan 48% 11% 59% 22% 36%
Feb 24% 16% 40% 21% 53%
Mar 20% 19% 39% 22% 57%
Apr 14% 33% 47% 28% 61%
May 24% 22% 47% 25% 54%
Jun 59% 34% 93% 73% 78%
Jul 56% 31% 87% 69% 79%
Aug 47% 31% 79% 48% 61%
Sep 48% 28% 76% 56% 75%
Oct 34% 18% 52% 35% 66%
Nov 19% 18% 37% 19% 51%
Dec 31% 26% 57% 36% 62%
2
0
1
1

Jan 33% 40% 73% 39% 54%
Feb 35% 38% 73% 51% 69%
Mar 48% 38% 86% 67% 78%
Apr 26% 46% 71% 62% 87%
May 24% 24% 49% 32% 66%
Jun 18% 50% 69% 42% 62%
Jul 42% 50% 93% 63% 73%
Aug 30% 54% 84% 62% 73%
Sep 9% 87% 97% 91% 94%
Oct 38% 58% 96% 93% 98%
Nov 38% 41% 79% 54% 68%
Dec 37% 41% 78% 55% 71%
2
0
1
2

Jan 50% 48% 97% 80% 82%
Feb 52% 38% 90% 74% 83%
Mar 55% 32% 88% 81% 92%
Apr 50% 31% 81% 70% 87%
May 43% 31% 74% 59% 80%
Jun 44% 24% 67% 57% 85%

COMMENTS:
The combined share flows of all institutions over the 2.5 year period was 299.4 million shares moved OFF and
312.1 million shares moved ON representing 70% of all registry activity.
Citicorp and National Nominees alone represent just over 50% of all registry share flows with 223.7 million
OFF and 312.1 million ON.
The increased patterns of control over trading also follow a pattern of increased levels of ownership over the
company.
Price containment has followed increasing institutional ownership over the company as has the amount of
Dark Pool trading undertaken, particularly following significant de-risking events achieved by the company
late 2011 early Jan 2012. Price containment has also been accompanied by an increase in short selling by
institutions also following the de-risking of the Rocklands late 2011 and into 2012 with the register suggesting
that institutions are both the lenders of stock and the purchasers of shares sold short.
It is difficult to explain the unusual symmetry and volumes of share flows in terms other than collusion
between institutional fund managers and the wide network of brokers they engage.

58

The dominant trading of Citicorp and National Nominees is evident in the chart where their combined
share of monthly institutional activity was around 80% for most of the time and averaged 73% over the 30
month period. For clarification, market share refers to all registry activity (i.e. movements both OFF and ON
the register) which in turn resulted from both buying and selling on the ASX and through Dark Pool
exchanges away from the ASX.

The dominance of Citicorp and National Nominees over the entire market is revealed even more fully when
their market share is compared to the registry activity of all shareholders. Their combined market share of
all registry activity averaged 50% across all 30 months but as evidenced in the chart was up around 80% for
a substantial period of time. The extensive volumes of Dark Pool trades undertaken is thought to be the
main reason for their out performance compared to all other shareholders.

CITICORP & NATIONAL NOMINEES SHARE OF INSTITUTIONAL TRADING
2010 2011 2012

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
J
a
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F
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M
a
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M
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J
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CITICORP & NATIONAL NOMINEES MARKET SHARE OF ALL REGISTRY ACTIVITY
The combined trading of Citicorp &
National makes them leading trading
institutions by a wide margin.
2010 2011 2012
High levels of control over all
activity in their own right
6.5.5.8.2
6.5.5.8.3
59

The dominance of institutions as a group is highlighted further by the following graphic which compares
the combined registry activity of the leading 2 traders (i.e. Citicorp & National Nominees) to total
shareholder movements, and the combined registry activity of all 5 institutional shareholders to total
shareholder movements.

All 5 institutions accounted for 70% of all registry activity over the 30 month period with their
outperformance in Mar & Apr 2011, and again in Sep & Oct 2011 associated with extensive off market
activity while the stock was in voluntary suspension. Even ignoring suspension months, institutional trading
is clearly seen to be the dominant force in the market with large volumes of shares effectively flowing back
and forth between each other through the services of a large number of brokers acting for the same
client(s). The trading has all the characteristics of a cartel monopolizing the market and controlling pricing
outcomes, strongly led by 2 dominant members. Two principal traders passing stock back and forth
between themselves is of course an essential requirement to be able to achieve remarkable trading
statistics such as:
OFF Register ON Register
124,057,631 shares 123,164,692 shares
99,615,532 shares 99,639,309 shares

In terms of collusion between institutional fund managers it is especially curious that National Nominees
and Citicorp Nominees stepped back from their dominant trading profiles while the M&G Group conducted
their on-market buying program during Nov 2010 and then promptly resumed their prominence with
National almost doubling their trading profile from Dec 2010 right through to Jun 2012.

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
J
a
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F
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M
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M
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J
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REGISTRY SHARE FLOWS OF THE LEADING 2 INSTITUTIONS COMPARED TO ALL 5 INSTITUTIONS
2010 2011 2012
Market Share of all registry
activity by all 5 institutions
Market Share of all registry
activity by Citi & National
November 2010 Registry Flows
INSTITUTION OFF ON
National Nominees 2,789,685 2,040,033
HSBC Nominees 2,890,182 4,436,380
J P Morgan 409,609 6,854,608
JP Morgan 1,411,923 767,497

Citicorp National
November Market Share 19% 18%
Pre Nov 2010 Avg. (10 months) 37% 24%
Post Nov 2010 Avg. (19 months) 37% 42%

M&G
Buying
Dramatic Increase
Curious Fall
6.5.5.8.4
Corresponding to
M&G accumulating
60

APPENDICES

Appendix 1: TOP 20 SHAREHOLDER LISTS FROM 2006 to 2011 Pg. 61
Appendix 2: BROKER TRADING SUMMARY: JAN 2010 TO JUNE 2012 Pg. 63
Appendix 3: BROKER and REGISTRY SUMMARIES JAN 2010 TO JUNE 2012 Pg. 65
Appendix 4: INSTITUTIONAL REGISTRY SUMMARIES: JAN 2010 TO JUNE 2012 Pg. 67
Appendix 5: ASX PARTICIPANT CODES Pg. 69
Appendix 6: LEADING RETAIL BROKERS - MONTHLY TRADING STATISTICS Pg. 72

61

APPENDIX 1: TOP 20 SHAREHOLDER LISTS FROM 2006 to 2011

2006

2007

2008

62

2009

2010

2011

63

APPENDIX 2: BROKER TRADING SUMMARY JAN 2010 TO JUNE 2012

Broker Volume Trades Volume Trades Totals Net Margin
By Total
Volume
By Number
of Trades
BY
Settlements
ABNA 19,680 123 22,748 137 42,428 3,068 $0.32 0.0% 0.0% -
AGNT 19,800 16 0 0 19,800 -19,800 - 0.0% 0.0% -
AIEX 24,796,565 16,213 21,738,508 15,563 46,535,073 -3,058,057 -$0.07 5.7% 3.2% 0.091
AUST 599,721 464 158,540 86 758,261 -441,181 0.881 0.1% 0.1% -
BAIL 647,064 504 250,373 204 897,437 -396,691 -$0.15 0.1% 0.1% 0.002
BBY 13,682,619 15,477 28,222,106 26,366 41,904,725 14,539,487 -0.017 5.1% 4.2% 0.008
BELL 10,027,918 6,437 7,676,658 5,087 17,704,576 -2,351,260 $0.16 2.2% 1.2% 0.034
BRID 208,316 172 186,902 158 395,218 -21,414 0.018 0.0% 0.0% -
BRLL 629,626 489 676,890 346 1,306,516 47,264 $0.17 0.2% 0.1% 0.001
BTIG 376,565 243 76,565 149 453,130 -300,000 -0.252 0.1% 0.0% -
BYS 74,028 53 76,590 69 150,618 2,562 $0.40 0.0% 0.0% -
CAM 421,750 210 356,655 194 778,405 -65,095 -0.358 0.1% 0.0% -
CARM 170,419 181 189,169 159 359,588 18,750 -$0.67 0.0% 0.0% -
CCZ 15,000 22 5,000 5 20,000 -10,000 1.529 0.0% 0.0% -
CITI 29,539,055 44,139 29,578,486 45,978 59,117,541 39,431 $0.01 7.2% 9.1% 0.024
CLSA 362,993 920 157,931 224 520,924 -205,062 -0.403 0.1% 0.1% -
CMCS 2,343,583 1,711 2,115,135 1,712 4,458,718 -228,448 -$0.01 0.5% 0.3% 0.006
COMM 76,624,662 48,152 75,215,000 48,164 151,839,662 -1,409,662 0.009 18.6% 9.8% 0.119
CSUI 10,246,191 24,229 10,861,565 26,113 21,107,756 615,374 $0.02 2.6% 5.1% 0.02
D2MX 3,785,228 1,614 4,010,207 1,222 7,795,435 224,979 -0.054 1.0% 0.3% -
DAIW 273,004 415 347,032 433 620,036 74,028 $0.46 0.1% 0.1% -
DMG 34,190,490 59,738 31,410,111 56,832 65,600,601 -2,780,379 -0.08 8.0% 11.8% 0.052
ETRD 26,758,640 16,823 23,951,632 16,564 50,710,272 -2,807,008 $0.04 6.2% 3.4% 0.059
EURO 82,314 95 122,613 80 204,927 40,299 0.194 0.0% 0.0% -
EVAN 271,717 141 10,175 5 281,892 -261,542 $0.64 0.0% 0.0% -
FOST 1,508,690 663 1,803,806 833 3,312,496 295,116 0.108 0.4% 0.2% -
FTDT 6,028 28 14,453 41 20,481 8,425 $0.03 0.0% 0.0% -
FWH 79,344 70 52,270 43 131,614 -27,074 -0.944 0.0% 0.0% -
GETCO 215,151 1,297 215,230 1,260 430,381 79 $0.00 0.1% 0.3% -
GS 12,143,860 13,911 12,393,121 15,059 24,536,981 249,261 -0.006 3.0% 2.9% -
HART 3,171,051 1,376 2,016,787 1,411 5,187,838 -1,154,264 -$1.04 0.6% 0.3% 0.001
HUB24 8,154,262 2,968 8,085,633 2,830 16,239,895 -68,629 0.013 2.0% 0.6% 0.009
IABL 0 0 616 2 616 616 - 0.0% 0.0% -
IMCP 1,498,323 5,245 1,460,734 4,218 2,959,057 -37,589 -0.009 0.4% 1.0% -
INCA 161,028 154 63,117 76 224,145 -97,911 -$0.23 0.0% 0.0% -
INST 5,405,076 8,880 5,221,925 9,350 10,627,001 -183,151 -0.485 1.3% 1.8% -
INTS 270,191 142 891,653 133 1,161,844 621,462 $1.54 0.1% 0.0% -
ITG 116,077 571 419,919 1,204 535,996 303,842 0.653 0.1% 0.2% -
JDV 507,233 404 524,841 483 1,032,074 17,608 -$0.01 0.1% 0.1% 0
JPM 3,578,482 4,147 4,079,534 3,256 7,658,016 501,052 -0.261 0.9% 0.8% 0.024
KOKO 61,018 317 42,209 262 103,227 -18,809 -$0.51 0.0% 0.1% -
LDAL 113,271 251 47,960 36 161,231 -65,311 -0.894 0.0% 0.0% -
LODG 713,239 812 120,453 158 833,692 -592,786 -$0.75 0.1% 0.1% -
MACP 6,468,903 4,276 5,523,062 3,839 11,991,965 -945,841 0.095 1.5% 0.8% 0.017
MACQ 15,655,957 34,330 15,284,159 31,915 30,940,116 -371,798 -$0.09 3.8% 6.7% 0.053
MERL 9,654,118 14,709 9,201,293 14,730 18,855,411 -452,825 -0.069 2.3% 3.0% 0.03
64

Broker Volume Trades Volume Trades Totals Net Margin
By Total
Volume
By Number
of Trades
BY
Settlements
MFGSA 40,385 22 0 0 40,385 -40,385 - 0.0% 0.0% -
MINC 1,496,937 1,709 1,570,387 1,695 3,067,324 73,450 0.026 0.4% 0.3% -
MOELIS 385,884 219 0 0 385,884 -385,884 - 0.0% 0.0% -
MORR 3,426,554 865 3,426,554 845 6,853,108 0 0.006 0.8% 0.2% -
MSDW 8,681,210 28,336 20,476,144 41,603 29,157,354 11,794,934 $0.07 3.6% 7.1% -
NAL 343,672 746 390,685 1,187 734,357 47,013 -0.025 0.1% 0.2% -
NATO 6,748 14 19,761 18 26,509 13,013 $0.92 0.0% 0.0% -
OPTV 113,431 459 122,035 251 235,466 8,604 -0.096 0.0% 0.1% -
ORDS 3,002,309 2,684 1,970,038 1,410 4,972,347 -1,032,271 $0.54 0.6% 0.4% -
PERSH 1,004,670 821 493,094 135 1,497,764 -511,576 -0.217 0.2% 0.1% 0.024
PRES 3,310 4 8,270 3 11,580 4,960 $1.58 0.0% 0.0% -
PSL 8,407,362 7,142 5,999,627 2,765 14,406,989 -2,407,735 0.1 1.8% 1.0% 0.013
RBC 216,741 126 35,641 6 252,382 -181,100 -$0.57 0.0% 0.0% -
RBS 1,423,961 2,833 1,489,695 2,912 2,913,656 65,734 0.013 0.4% 0.6% 0.012
RBSM 3,124,511 2,848 1,561,750 1,257 4,686,261 -1,562,761 $0.10 0.6% 0.4% 0.008
REYN 65,950 74 124,416 73 190,366 58,466 0.706 0.0% 0.0% -
SBAR 12,519,913 8,739 12,195,335 6,825 24,715,248 -324,578 $0.21 3.0% 1.6% 0.02
SCE 215,887 66 224,387 51 440,274 8,500 0.153 0.1% 0.0% -
SHAD 752,130 532 311,713 280 1,063,843 -440,417 $0.15 0.1% 0.1% -
SHAW 1,038,682 1,000 859,852 698 1,898,534 -178,830 0.046 0.2% 0.2% 0.003
SOSL 16,814,844 12,223 16,903,003 11,818 33,717,847 88,159 -$0.03 4.1% 2.4% 0.01
STBG 489,938 431 860,915 562 1,350,853 370,977 0.386 0.2% 0.1% 0
SUSQ 7,420,378 6,043 7,434,726 6,669 14,855,104 14,348 $0.03 1.8% 1.3% -
TAYL 923,100 401 947,650 561 1,870,750 24,550 -0.131 0.2% 0.1% -
TIMB 479,886 510 452,584 474 932,470 -27,302 -$0.02 0.1% 0.1% -
TPPM 5,460,667 3,740 5,187,700 3,565 10,648,367 -272,967 -0.024 1.3% 0.7% 0.007
UBS 24,255,420 76,170 20,098,239 69,322 44,353,659 -4,157,181 $0.02 5.4% 14.8% 0.269
WBC 199,802 258 285,913 358 485,715 86,111 0.006 0.1% 0.1% -
WILS 939,798 755 572,850 418 1,512,648 -366,948 $0.18 0.2% 0.1% -

TOTALS 408,902,330 492,902 408,902,330 492,750 817,804,660 0 - 99.90% 99.80% 91.60%

65

APPENDIX 3: BROKER and REGISTRY SUMMARIES JAN 2010 TO JUNE 2012

BUYING & SELLING BY BROKERS ON THE ASX

BROKER SETTLEMENTS OF CLIENT TRADES
PID BROKER SELLS BUYS

PID BROKER OFF ON
1402 COMM 76,624,662 75,215,000

COMM 1402 30,872,503 29,728,316
2103 DMG 34,190,490 31,410,111

DMG 2103 0 0
2032 CITI 29,539,055 29,578,486

CITI 2032 3,390 3,390
6788 SOSL 16,814,844 16,903,003

SOSL 6788 1,269,866 1,261,636
2992 MSDW 8,681,210 20,476,144

MSDW 2992 0 0
1572 MACQ 15,655,957 15,284,159

MACQ 1572 1,330,007 1,175,337
1123 BBY 13,682,619 28,222,106

BBY 1123 0 14,086,521
1442 ETRD 26,758,640 23,951,632

ETRD 1442 14,457,903 12,288,878
3610 GSP 12,143,860 12,393,121

GSP 3610 430,034 315,802
1103 CSUI 10,246,191 10,861,565

CSUI 1103 0 0
1505 UBS 24,255,420 20,098,239

UBS 1505 12,102,466 12,054,101
6386 AIEX 24,796,565 21,738,508

AIEX 6386 14,646,754 11,731,720
3663 MERL 9,654,118 9,201,293

MERL 3663 0 0
3383 SBAR 12,519,913 12,195,335

SBAR 3383 4,414,928 3,366,702
1382 HUB24 8,154,262 8,085,633

HUB24 1382 915,488 746,921
6776 PSL 8,407,362 5,999,627

PSL 6776 2,125,888 1,510,889
1543 BELL 10,027,918 7,676,658

BELL 1543 4,718,250 3,531,106
2552 TPPM 5,460,667 5,187,700

TPPM 2552 1,242,800 1,044,032
2893 D2MX 3,785,228 4,010,207

D2MX 2893 121,925 112,300
1088 MORR 3,426,554 3,426,554

MORR 1088 9,000 9,000
2972 JPM 3,578,482 4,079,534

JPM 2972 492,500 499,786
6086 HART 3,171,051 2,016,787

HART 6086 806,160 167,466
2442 MACP 6,468,903 5,523,062

MACP 2442 4,940,836 3,903,787
2702 RBS 1,423,961 1,489,695

RBS 2702 311,557 269,745
2338 ORDS 3,002,309 1,970,038

ORDS 2338 1,746,266 1,590,763
5128 TAYL 923,100 947,650

TAYL 5128 137,100 114,369
2662 CMCS 2,343,583 2,115,135

CMCS 2662 1,610,565 1,486,586
2921 INTS 270,191 891,653

INTS 2921 52,100 37,500
4064 RBSM 3,124,511 1,561,750

RBSM 4064 1,999,009 1,652,835
4094 BRLL 629,626 676,890

BRLL 4094 146,400 187,265
2982 SHAW 1,038,682 859,852

SHAW 2982 686,017 561,549
1135 CAM 421,750 356,655

CAM 1135 109,201 45,594
6066 JDV 507,233 524,841

JDV 6066 435,116 119,853
1459 SCE 215,887 224,387

SCE 1459 20,000 20,000
1051 WBC 199,802 285,913

WBC 1051 142,837 12,793
1062 BRID 208,316 186,902

BRID 1062 100,725 106,610
6047 CARM 170,419 189,169

CARM 6047 84,970 105,220
7047 SHAD 752,130 311,713

SHAD 7047 622,374 306,131
2025 BYS 74,028 76,590

BYS 2025 19,224 25,200
3113 BAIL 647,064 250,373

BAIL 3113 571,545 241,013
3552 LDAL 113,271 47,960

LDAL 3552 56,165 50,100
3523 FWHT 79,344 52,270

FWHT 3523 59,844 42,120
1027 EURO 82,314 122,613

EURO 1027 59,300 120,613

OTHER (not registered by the brokers themselves)

OTHER Broker Settlements

9452 SUSQ 7,420,378 7,434,726

2172 INST 5,405,076 5,221,925

Off Market 0 6,245,194 2,506,658
1232 FOST 1,508,690 1,803,806

PENS 1791 1,321,486 624,633
2302 MINC 1,496,937 1,570,387

AUST 3074 853,488 586,879
9512 IMCP 1,498,323 1,460,734

WILS 4125 656,822 708,944
6683 STBG 489,938 860,915

Berndale 1113 1,706,821 1,121,014
4125 WILS 939,798 572,850

BBY 1124 22,814 25,499
1791 PERSH 1,004,670 493,094

COMM2 1202 70,360 50,000
2382 TIMB 479,886 452,584

? 1212 500 0
3453 ITG 116,077 419,919

WealthHub 1226 15,000 15,000
1291 NAL 343,672 390,685

ORDS 2339 29,000 0
3063 DAIW 273,004 347,032

? 3073 5,000 0
2292 GETCO 215,151 215,230

CBA 3103 9,800 35,500
3074 AUST 599,721 158,540

? 3223 5,000 5,000
66

BUYING & SELLING BY BROKERS ON THE ASX

BROKER SETTLEMENTS OF CLIENT TRADES
PID BROKER SELLS BUYS

PID BROKER OFF ON
#N/A REYN 65,950 124,416

9232 OPTV 113,431 122,035

Retail Totals

114,812,298 110,312,676
3292 LODG 713,239 120,453

BROKER NOMINEES

2212 CLSA 288,788 85,025

CSUI 1103 12,828,203 13,178,203
2452 BTIG 376,565 76,565

UBS 1505 11,853,633 11,560,501
2212 CLSA1 74,205 72,906

MERL 3663 11,508,957 11,482,151
#N/A INCA 161,028 63,117

MACQ 1572 5,199,525 5,194,525
9532 KOKO 61,018 42,209

DMG 2103 4,770,208 4,667,801
2542 RBC 216,741 35,641

ABNO 1193 4,448,377 4,461,389
1193 ABNA 19,680 22,748

MSDW 2992 2,883,209 2,879,983
#N/A NATO 6,748 19,761

CBA 3102 1,339,856 1,361,489
#N/A FTDT 6,028 14,453

JPM 2972 1,341,939 1,211,143
1471 EVAN 271,717 10,175

SBAR 3383 473,905 472,849
2192 PRES 3,310 8,270

BBY 1124 456,857 356,857
2493 CCZ 15,000 5,000

GS 3610 44,503 27,819
#N/A IABL 0 616

Berndale 1113 9,315,694 9,245,389
2111 MOELIS 385,884 0

6013 AGNT 19,800 0

Nominee Totals:

66,464,866 56,854,710
1043 MFGSA 40,385 0

Totals 408,902,330 408,902,330

SUMMARY OF ASTC PARTICIPANT REGISTRY DEALINGS: from ASX & Dark Pool transactions

PID OFF ON

PID OFF ON

PID OFF ON
20005 13,544,264 8,800,260

20120 13,950 9,950

21034 362,751 318,071
20006-qic 937,401 350,095

20131 170,561 41,007

21104 6,336,926 9,544,966
20006 99,615,532 99,639,309

20152 551,003 662,157

21119 212,252 133,614
20006-uni 51,646 3,739

20306 384,975 218,510

22123 521 15,642
20007 3,267,466 1,801,950

20311 1,000 0

22888 618,144 350,183
20018 124,057,631 123,075,068

20367 341,714 344,293

23005 1,981,354 1,506,513
20021 648,113 240,595

20404 104,563 1,210

27048 342,768 199,568
20039 15,000 20,500

21003 187,420 206,723

27050 3,609 44,037
20054 2,065,455 1,000,851

21003 11,071 9,825

20057 41,790,414 45,563,226

21008 7,248,773 6,556,357

20068 46,800 31,100

21019 1,277,410 1,043,481

20082 132,775 15,473

21028 193,136 154,919

20104 14,242,707 25,724,883

21030 2,955,575 1,855,969

TOTALS 323,714,680 329,484,044

Note: The settlements attended to by ASTC agents involve buying & selling done by ASX brokers and then
forwarded to them to finalize. It is assumed that ASTC Participants also look after off-market (Dark Pool)
transactions
Institutions
67

APPENDIX 4: INSTITUTIONAL REGISTRY SUMMARIES - JAN 2010 TO JUNE 2012

2010

2011

2012

Institutional Entity OFF ON

OFF ON

OFF ON
JAN ANZ Nominees 867,738 303,195

0 0

0 0


1,320,405 1,420,088

4,464,222 4,415,011

National Nominees 406,193 165,854

1,687,464 1,642,282

4,073,132 4,459,128


728,400 1,002,689

131,232 116,927

J P Morgan Nominees 0 65,749

35,959 316,785

244,259 0

JP Morgan Nominees 0 0

93,206 91,368

18,494 0

Totals 2,927,075 2,337,750

3,865,434 4,473,212

8,931,339 8,991,066
FEB ANZ Nominees 971,685 693,511

0 0

0 0


3,447,396 3,350,544

4,554,683 4,567,017

National Nominees 1,015,941 494,039

3,710,354 3,749,544

3,460,668 3,171,990

HSBC Nominees 1,824,626 1,744,139

965,180 894,183

364,166 600,683

J P Morgan Nominees 203,575 50,107

932,505 1,091,363

312,380 354,955


740,857 535,177

90,065 48,065

Totals 5,118,934 4,085,352

9,796,292 9,620,811

8,781,962 8,742,710
MAR ANZ Nominees 1,531,357 1,388,170

0 0

0 0


5,249,200 5,093,798

7,390,037 7411248

National Nominees 2,079,169 653,188

4,115,813 3,979,792

4,239,707 4,353,094

HSBC Nominees 1,843,763 2,901,423

668,455 507,365

764,566 782,844


1,059,031 384,251

470,429 978,754


266,701 266,728

45,333 285,757

Totals 7,126,869 7,241,506

11,359,200 10,231,934

12,910,072 13,811,697
APR ANZ Nominees 1,221,040 1,177,135

0 0

0 0

Citicorp Nominees 674,165 806,470

726,220 588,795

3597314 3,603,644

National Nominees 904,221 2,595,370

1,122,506 1,207,618

2,277,079 2,282,581

HSBC Nominees 1,242,492 1,368,637

224,296 366,813

689,744 861,073


55,000 655,772

470,655 470,663


0 151,953

164,754 115,002

Totals 4,403,308 6,234,093

2,128,022 2,970,951

7,199,546 7,332,963
MAY ANZ Nominees 1,611,344 1,071,991

0 0

0 0


2,103,582 2,526,965

3,569,801 3,555,121


2,513,520 2,129,886

2,857,827 2,281,853

HSBC Nominees 1,669,127 703,674

2,741,859 3,057,816

1,022,488 1,036,536


1,440,106 1,356,479

374,819 1238089


718,351 470,458

159936 482,358

Totals 6,352,776 5,412,639

9,517,418 9,541,604

7,984,871 8,593,957
JUN ANZ Nominees 285,031 189,373

0 0

0 0


1,097,270 1,092,296

5,201,891 4,698,115


3,179,764 2,858,972

2,776,297 2,582,041


984,236 1,141,272

2,248,001 2,174,025


576,287 565,417

1,156,965 1,411,193


201,648 290,373

147,790 236692

Totals 16,734,542 16,356,778

6,039,205 5,948,330

11,530,944 11,102,066

68

APPENDIX 4 contd: INSTITUTIONAL REGISTRY SUMMARIES - JAN 2010 TO JUNE 2012

2010

2011

Institutional Entity
OFF ON

OFF ON
JUL ANZ Nominees 743,478 783,538

0 0

4,733,492 4,487,005

4,784,601 4,692,557
HSBC Nominees 1,103,045 984,591

907,475 871,650

526,397 389,747

355,944 42,525
Totals 18,967,721 18,753,256

11,307,909 10,483,484
AUG ANZ Nominees 1,559,602 1,638,691

0 0

3,767,746 3,625,815

6,958,881 6,457,438
HSBC Nominees 2,795,803 2,472,914

949,597 879,427
J P Morgan 1,473,772 1,201,665

846,562 827,864
JP Morgan 0 0

201,011 174,660
Totals 25,939,655 26,423,450

12,723,797 11,965,204
SEP ANZ Nominees 4,570,827 1,451,994

0 0

258,680 243,544

2,441,873 2,358,344
HSBC Nominees 1,808,045 1,634,662

65,701 61,565
J P Morgan 628,727 240,571

27,403 29,882
JP Morgan 429,697 4,083,785

Totals 30,346,452 30,505,566

2,793,657 2,693,335
OCT ANZ Nominees 182,162 102,662

0 0

755,207 774,899

1,139,070 1,203,747
HSBC Nominees 7,492,908 6,269,339

49,498 104,335
J P Morgan 149,475 902,666

0 20,316
JP Morgan 411,770 520,263

Totals 16,792,326 16,778,604

1,943,775 2,103,297
NOV ANZ Nominees 0 0

0 0

2,841,840 3,109,273

2,500,718 3,961,279
HSBC Nominees 2,890,182 4,436,380

849,463 972,798
J P Morgan 409,609 6,854,608

693,172 468,807
JP Morgan 1,411,923 767,497

359,924 54,486
Totals 10,142,679 16,483,556

7,245,117 8,566,643
DEC ANZ Nominees 0 0

0 0

3,362,491 3,637,992

3,978,833 3,715,257
HSBC Nominees 2,695,890 4,446,137

998,044 1,448,846
J P Morgan 329,323 1,996,159

234873 910,821
JP Morgan 499,818 340,344

19704 587,475
Totals 9,931,858 14,017,770

8,593,945 10,300,391
MONTHLY SUMMARIES
2010
OFF ON
Jan 2,927,075 2,337,750
Feb 5,118,934 4,085,352
Mar 7,126,869 7,241,506
Apr 4,403,308 6,234,093
May 6,352,776 5,412,639
Jun 16,734,542 16,356,778
Jul 18,967,721 18,753,256
Aug 25,939,655 26,423,450
Sep 30,568,729 30,403,424
Oct 16,792,326 16,778,604
Nov 10,142,679 16,483,556
Dec 9,931,858 14,017,770
2011
OFF ON
Jan 3,865,434 4,473,212
Feb 9,796,292 9,620,811
Mar 11,359,200 10,231,934
Apr 2,128,022 2,970,951
May 9,517,418 9,541,604
Jun 6,039,205 5,948,330
Jul 11,307,909 10,483,484
Aug 12,723,797 11,965,204
Sep 2,793,657 2,693,335
Oct 1,943,775 2,103,297
Nov 7,245,117 8,566,643
Dec 8,593,945 10,300,391
2012
OFF ON
Jan 8,931,339 8,991,066
Feb 8,781,962 8,742,710
Mar 12,910,072 13,811,697
Apr 7,199,546 7,332,963
May 7,984,871 8,593,957
Jun 11,530,944 11,102,066
Totals 299,658,977 312,001,833

69

APPENDIX 5: ASX PARTICIPANT CODES
ASX BROKER CODES ASTC PARTICIPANTS
Brokers licensed to Trade, Clear & Settle PID CODE

ASTC Agents Settlement Only PID
Westpac Securities Limited 1051 WPC ANZ Nominees Limited 20005
Bridges Financial Services Pty Limited 1062 BRID National Australia Bank Custodian Services 20006
Morrison Securities Pty Limited 1088 MORR BNP Paribas Fund Services Australasia Pty Ltd 20007
Credit Suisse Equities (Australia) Limited 1103 CSUI Navigator Australia Limited 20016
Berndale Securities Limited 1113 BERN Citicorp Nominees Pty Limited 20018
Cameron Stockbrokers Limited 1135 CAM BT Securities Ltd 20021
ABN AMRO Clearing Sydney Pty Ltd 1193 ABNA The Trust Company Limited 20025
Commonwealth Securities Limited 1202 COMM Merrill Lynch (Australia) Nominees Pty Limited 20036
National Online Trading Ltd 1227 NATO INVIA Custodian Pty Limited 20039
ANZIEX Ltd 1382 HUB24 Equity Trustees Limited 20054
Commonwealth Securities Limited 1402 COMM HSBC Custody Nominees (Australia) Limited 20057
Etrade Australia Securities Limited 1442 ETRD Australian Executor Trustees (NSW) Limited 20066
UBS Securities Australia Ltd 1505 UBSW Perpetual Trustees Consolidated Limited 20068
Bell Potter Securities Limited 1543 BELL Sandhurst Trustees Limited 20082
Macquarie Securities (Australia) Limited 1572 MACQ ANZ Trustees Limited 20098
Penson Financial Services Australia Pty Ltd 1791 PENS J.P. Morgan Nominees Australia Limited 20104
Citigroup Global Markets Australia Pty Limited 2032 CITI National Australia Trustees Limited 20106
Deutsche Securities Australia Limited 2103 DMG Bank of Western Australia Ltd 20110
Instinet Australia Pty Limited 2172 INST Australian Executor Trustees Limited 20120
Ord Minnett Limited 2338 ORDS Computershare Clearing Pty Limited 20127
Macquarie Equities Limited 2442 MACP Margin Lending Nominees Pty Limited 20150
RBC Securities Australia Pty Limited 2542 RBC Suncorp Custodian Services Pty Ltd 20152
Third Party Platform Pty Ltd 2552 TPPM State Trustees Limited 20159
CMC Markets Stockbroking Limited 2662 CMCS BPC Securities Pty Limited 20306
RBS Equities (Australia) Limited 2702 RBS Blackrock Investment Management (Australia) Ltd 20366
J.P. Morgan Securities Australia Limited 2972 JPM Netwealth Investments Limited 20367
Shaw Stockbroking Limited 2982 SHAW Link Market Services Limited 20378
Morgan Stanley Australia Securities Limited 2992 MSDW Bond Street Custodians Limited - A/C Institutional 21003
Daiwa Capital Markets Stockbroking Limited 3063 DAIW Pirie Street Custodian Ltd 21008
CBA Equities Limited 3102 CBA ANZ Margin Services Pty Limited 21019
E. L. & C. Baillieu Stockbroking Ltd 3113 BAIL Tyndall Investment Management Limited 21021
Morgan Stanley Smith Barney Australia Pty Ltd 3383 SBAR ACS Securities Pty Ltd 21023
ITG Australia Limited 3453 ITG Bond Street Custodians Limited - A/C Portfolio Serv 21028
F. W. Holst & Co. Pty. Limited 3523 FWHT NSW Trustee and Guardian 21029
Lonsec Limited 3552 LDAL National Margin Services Pty Ltd 21030
Goldman Sachs & Partners Australia Pty Ltd 3610 GS National Stock Exchange of Australia Limited 21031
Merrill Lynch Equities (Australia) Limited 3663 MERL Capricorn Investment Partners Limited 21033
RBS Morgans Limited 4064 RBSM BT Portfolio Services Ltd 21034
Wilson HTM Ltd 4124 WILS Tasmanian Perpetual Trustees Ltd 21035
Taylor Collison Limited 5128 TAYL RBC Dexia Investor Services Trust 21119
JDV Limited 6066 JDV Chimaera Capital Ltd 22123
Hartleys Limited 6086 HART Value Nominees Pty Ltd 22888
Australian Investment Exchange Limited 6381 AIEX J.P. Morgan Nominees Australia Limited - GSP 21104
Australian Investment Exchange Limited 6386 AIEX J.P. Morgan Nominees Australia Limited - GSP 21104
Stonebridge Securities Limited 6684 STBG
Patersons Securities Limited 6776 PSL
State One Stockbroking Ltd 6788 SOSL
Shadforths Limited 7047 SHAD

70

APPENDIX 5 contd: ASX PARTICIPANT CODES

71

APPENDIX 5 contd: ASX PARTICIPANT CODES

72

APPENDIX 6: LEADING RETAIL BROKER MONTHLY TRADING STATISTICS 2010, 2011 & Jan to Jun 2012
2010 TRADING
TRADING RETAIL ASX ACTIVITY REGISTRY DEALINGS SURPLUS TRADES SURPLUS
MONTH BROKER SELLS BUYS OFF ON SELLS BUYS TRADES %
JAN 2010 COMM 1,394,236 1,974,674 654,864 1,240,293 739,372 734,381 43.7%

ETRD 763,375 667,552 580,909 365,100 182,466 302,452 33.9%

AIEX 192,208 282,340 186,581 322,452 5,627 -40,112 -7.3%

FEB 2010 COMM 1,707,164 1,963,499 779,075 1,063,804 928,089 899,695 49.8%

ETRD 574,242 821,706 364,667 518,276 209,575 303,430 36.7%

AIEX 506,981 564,892 226,025 313,240 280,956 251,652 49.7%

MAR 2010 COMM 2,271,750 2,408,821 893,433 1,072,567 1,378,317 1,336,254 58.0%

ETRD 927,238 991,874 384,020 593,724 543,218 398,150 49.1%

AIEX 899,083 890,370 1,352,127 457,378 -453,044 432,992 -1.1%

APR 2010 COMM 1,459,536 1,453,436 855,696 904,433 603,840 549,003 39.6%

ETRD 482,728 377,302 303,292 171,365 179,436 205,937 44.8%

AIEX 498,923 489,811 404,525 282,084 94,398 207,727 30.6%

MAY 2010 COMM 2,046,956 2,328,713 985,187 1,409,600 1,061,769 919,113 45.3%

ETRD 858,065 870,641 461,353 588,927 396,712 281,714 39.2%

AIEX 975,482 1,044,926 461,902 476,695 513,580 568,231 53.5%

JUN 2010 COMM 2,124,762 2,221,874 893,127 1,008,819 1,231,635 1,213,055 56.2%

ETRD 562,338 659,942 417,095 467,787 145,243 192,155 27.6%

AIEX 607,851 696,232 419,179 349,653 188,672 346,579 41.0%

JUL 2010 COMM 2,150,992 2,018,744 1,180,468 1,073,637 970,524 945,107 45.9%

ETRD 817,575 849,405 506,450 441,920 311,125 407,485 43.1%

AIEX 989,352 1,190,931 431,503 1,728,073 557,849 -537,142 0.9%

AUG 2010 COMM 26,084,613 27,680,628 5,259,096 5,454,178 20,825,517 22,226,450 80.1%

ETRD 6,709,009 7,276,407 1,935,527 2,006,295 4,773,482 5,270,112 71.8%

AIEX 5,996,952 5,537,259 2,404,036 1,814,563 3,592,916 3,722,696 63.4%

SEP 2010 COMM 5,176,310 5,441,167 1,828,419 2,342,648 3,347,891 3,098,519 60.7%

ETRD 1,763,414 1,471,351 1,167,883 1,519,976 595,531 -48,625 16.9%

AIEX 2,536,046 1,793,753 1,273,646 750,468 1,262,400 1,043,285 53.3%

OCT 2010 COMM 6,104,321 5,525,486 1,957,690 1,836,944 4,146,631 3,688,542 67.4%

ETRD 2,103,142 1,862,126 784,170 742,354 1,318,972 1,119,772 61.5%

AIEX 1,993,808 1,850,518 830,008 625,092 1,163,800 1,225,426 62.1%

NOV 2010 COMM 8,427,019 7,922,475 3,572,703 3,082,741 4,854,316 4,839,734 59.3%

ETRD 3,612,441 3,064,619 1,599,557 971,233 2,012,884 2,093,386 61.5%

AIEX 2,673,611 2,371,345 1,712,457 940,863 961,154 1,430,482 47.4%

DEC 2010 COMM 2,855,250 1,727,528 2,122,752 1,328,796 732,498 398,732 24.7%

ETRD 1,001,479 1,017,156 671,452 745,286 330,027 271,870 29.8%

AIEX 1,165,214 529,234 884,731 494,882 280,483 34,352 18.6%

SUMMARY
RETAIL
BROKER
ASX ACTIVITY REGISTRY DEALINGS SURPLUS TRADES
TRADES %
SELLS BUYS OFF ON SELLS BUYS
FULL YEAR
2010
COMM 61,802,909 62,667,045 20,982,510 21,818,460 40,820,399 40,848,585 65.6%
ETRD 20,175,046 19,930,081 9,176,375 9,132,243 10,998,671 10,797,838 54.4%
AIEX 19,035,511 17,241,611 10,586,720 8,555,443 8,448,791 8,686,168 47.2%
Totals 60,267,861 60,332,591
73

APPENDIX 6: LEADING RETAIL BROKER MONTHLY TRADING STATISTICS contd
2011 TRADING
JAN 2011 COMM 1,284,201 1,419,192 636,386 678,692 647,815 740,500 51.4%
ETRD 717,305 430,646 464,546 233,118 252,759 197,528 39.2%
AIEX 476,906 507,355 188,576 315,674 288,330 191,681 48.8%

FEB 2011 COMM 957,457 1,359,224 583,065 978,189 374,392 381,035 32.6%
ETRD 584,067 395,218 598,961 416,053 -14,894 -20,835 -3.6%
AIEX 312,931 399,506 333,019 309,774 -20,088 89,732 9.8%

MAR 2011 COMM 615,854 979,146 431,011 726,256 184,843 252,890 27.4%
ETRD 287,831 235,461 256,929 219,048 30,902 16,413 9.0%
AIEX 214,085 458,006 65,511 318,771 148,574 139,235 42.8%

APR 2011 COMM 675,856 1,062,538 260,798 97,226 415,058 965,312 79.4%
ETRD 353,108 242,320 54,756 23,375 298,352 218,945 86.9%
AIEX 234,445 274,154 91,409 0 143,036 274,154 82.0%

MAY 2011 COMM 1,302,134 1,470,937 732,600 1,277,143 569,534 193,794 27.5%
ETRD 657,416 481,839 716,533 520,134 -59,117 -38,295 -8.6%
AIEX 537,632 484,802 299,034 362,510 238,598 122,292 35.3%

JUN 2011 COMM 1,392,152 909,949 972,276 547,995 419,876 361,954 34.0%
ETRD 693,055 361,237 534,032 331,814 159,023 29,423 17.9%
AIEX 633,802 417,154 665,478 836,221 -31,676 -419,067 -42.9%

JUL 2011 COMM 963,121 765,777 677,668 618,554 285,453 147,223 25.0%
ETRD 554,957 269,811 497,356 246,817 57,601 22,994 9.8%
AIEX 589,310 313,453 427,827 138,548 161,483 174,905 37.3%

AUG 2011 COMM 1,429,842 568,999 1,286,629 451,305 143,213 117,694 13.1%
ETRD 522,339 225,165 387,117 127,205 135,222 97,960 31.2%
AIEX 475,362 218,786 316,953 177,592 158,409 41,194 28.8%

SEP 2011 COMM 0 0 7,355 7,355 0 -7,355 Na
ETRD 0 0 768 127,632 0 0 Na
AIEX 0 0 496 0 0 0 Na

OCT 2011 COMM 0 0 1,660 0 0 -1,660 Na
ETRD 0 0 0 0 0 0 Na
AIEX 0 0 0 0 0 0 Na

NOV 2011 COMM 1,522,747 1,024,271 1,114,883 420,612 407,864 603,659 39.7%
ETRD 637,901 480,991 323,367 112,929 314,534 368,062 61.0%
AIEX 516,832 345,918 345,236 208,880 171,596 137,038 35.8%

DEC 2011 COMM 1,124,368 962,816 877,344 734,521 247,024 228,295 22.8%
ETRD 465,882 139,990 494,800 302,702 -28,918 -162,712 -31.6%
AIEX 550,427 293,310 427,841 176,506 122,586 116,804 28.4%

SUMMARY
RETAIL
BROKER
TRADES %
FULL YEAR
2011
COMM 11,267,732 10,522,849 7,581,675 6,537,848 3,695,072 3,983,341 35.2%
ETRD 5,473,861 3,262,678 4,329,165 2,660,827 1,145,464 729,483 21.5%
AIEX 4,541,732 3,712,444 3,161,380 2,844,476 1,380,848 867,968 27.2%
Totals 6,221,384 5,580,792
74

APPENDIX 6: LEADING RETAIL BROKER MONTHLY TRADING STATISTICS contd
2012 TRADING
JAN 2012 COMM 514,117 383,511 447,143 305,530 66,974 77,981 16.1%
ETRD 184,532 111,731 154,204 48,747 30,328 62,984 31.5%
AIEX 208,527 161,917 104,692 101,473 103,835 60,444 44.3%

FEB 2012 COMM 787,052 332,603 517,997 172,727 269,055 159,876 24.0%
ETRD 206,224 127,082 246,071 124,812 -39,847 2,270 -12.0%
AIEX 248,614 205,241 151,616 84,478 96,998 120,763 21.4%

MAR 2012 COMM 476,316 325,669 362,820 182,069 113,496 143,600 14.2%
ETRD 111,458 178,890 127,473 173,918 -16,015 4,972 -5.5%
AIEX 199,381 106,981 172,705 86,620 26,676 20,361 8.7%

APR 2012 COMM 361,158 224,822 259,155 110,346 102,003 114,476 17.4%
ETRD 156,990 144,096 85,079 107,001 71,911 37,095 23.9%
AIEX 187,513 44,504 374,797 230,543 -187,284 -186,039 -80.7%

MAY 2012 COMM 827,081 210,316 496,646 187,214 330,435 23,102 31.9%
ETRD 325,167 68,230 306,072 74,862 19,095 -6,632 4.9%
AIEX 223,856 136,766 193,557 107,057 30,299 29,709 8.4%

JUN 2012 COMM 588,297 548,185 330,590 403,243 257,707 144,942 35.4%
ETRD 124,049 128,844 127,099 99,673 -3,050 29,171 10.3%
AIEX 151,431 129,044 157,789 145,610 -6,358 -16,566 -8.2%

SUMMARY
RETAIL
BROKER
TRADES %
Jan 2010 to
Jun 2012
COMM 3,554,021 2,025,106 2,414,351 1,361,129 1,139,670 663,977 31.3%
ETRD 1,109,733 758,873 1,045,998 629,013 62,422 129,860 10.3%
AIEX 1,219,322 784,453 1,155,156 755,781 64,166 28,672 4.6%
Totals 1,266,258 822,509

30 MONTH RETAIL BROKER SUMMARY
SUMMARY
RETAIL
BROKER
TRADES %
Jan 2010 to
Jun 2012
76,624,662 75,215,000 30,978,536 29,717,437 45,646,126 45,497,563 60.0% 76,624,662
26,758,640 23,951,632 14,551,538 12,422,083 12,207,102 11,529,549 46.8% 26,758,640
24,796,565 21,738,508 14,903,256 12,155,700 9,893,309 9,582,808 41.9% 24,796,565
Totals 67,746,537 66,609,920

6.5 CuDeco Registry Anomalies 5

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