1

The data that follows compares CommSec trading data between:

 October 1 and October 31, 2014 where CommSec trading was relatively subdued in causing price
falls, and
 November 3 to December 5, 2014 where CommSec transactions had a large impact on causing
reductions in price in a similar manner to what has been detailed in ASIC Complaints 2015 -1A & 1B

CommSec Selling CommSec Selling

Oct 1 to Oct 31, 2014
DT Trades <= 500 shares: 52
All COMM DT Trades: 121
Non Retail DTs: 43%
Company Register
Retail Trades <= 500 shares: 21
Nov 3 to Dec 5, 2014
DT Trades <= 500 shares: 488
All COMM DT Trades: 657
Non Retail DTs : 74%
Company Register
Retail Trades <= 500 shares: 17

The data for Nov 3 to Dec 5 reveals a strong institutional presence with many small trades
programmed to cause price disruption.
 3

A prominent impact by COMM in causing price falls.

Commsec’s prominence in relation to price falls followed selling advice issued to their clients on
October 15 and again on October 17.
 4

The prominent broker selling profiles for CommSec over the period are again featured in the following chart.

CommSec – Leading Non-Genuine Selling Biases

CommSec was the
leading non-genuine
seller over the period.

CommSec selling comprises

institutional algorithmic trades
intermingled amongst retail orders.
It is the algorithmic trades that
attract concerns as they were
instrumental in setting and
maintaining artificial
prices.including establishing multi-
year lows
In the absence of price queries or
regulatory intervention despite
highly volatile trading, retail
investors and the company itself
were left exposed to the impact of
predatory trading.

Similarities with trading over the extended period and with the non-genuine trading highlighted in ASIC
Complaints 2015–1A, and 2015–1B, are brought to attention in 2015 – 1C Part B of the current complaint.

It reveals a re-occurring theme, whereby prices were strategically targeted at critical times, through
activities that emanated from the CommSec institutional desk.
5

2
 6

CuDeco - 3 Nov 2014 Trading

CommSec (COMM) trading on 3 November 2014 had little impact on prices. It provides a reference point
to compare trading on other days where COMM Downtick trades were a prominent feature.

On a day when 380,126 shares changed hands, CommSec was responsible for 6.9% of the selling. There were only
34 DTs in price across the entire day. COMM was responsible for just 6 DT trades. The style of selling is in stark
contrast to the large numbers of Downticks that CommSec was noted for in previous ASIC Complaints

141 CuDeco Trading - Price Chart 3 November 2014

139

137

135

133 8.6% price

slump
131

129

127

125
CommSec (COMM) Downticks
0

-1

-2

Credit Suisse led price falls with just 13% of the selling and 10 separate DT trades. Despite the light activity
in terms of DT trades, prices nevertheless fell by a very substantial 12 cents on the day.
Credit Suisse (CSUI) Downticks
0
-1
-2
-3

CuDeco Broker Selling Profiles

It is counterintuitive that
UBS Securities was the major 3 November 2014 brokers with reduced selling
seller accounting for 56.3% involvements such as
of all sales yet only recorded Efficient selling COMM and CSUI (with 20%
2 more DT trades than of selling between them,
COMM. UBS sold all of its have twice as much impact
Biases towards non- on prices than the likes of
shares into the market genuine selling
without a single purchase. UBS who accounted for 56%
of all selling.

Not only is it counterintuitive,

but it also points to an
artificial pricing environment
where trading agendas rather
% of Downtick Trades than the forces of supply and
% of All Selling demand set prices.
 7

CuDeco - 4 Nov 2014 Trading

Large price falls occurred on 3 November despite a small number of DT trades being involved. It suggests
a degree of capitulation with buyers lacking conviction to oppose falls. Had buying surfaced it would
simply mean that the algorithms would have become more aggressive in supporting the agendas of
those seeking lower prices.
Trading on November 4 showed a changed character to CommSec trading with algorithmic DT trades
becoming a more prominent feature.
The changed nature of trading comes about through the discretionary tuning of algorithms to suit
particular trading agendas. The key to price rigging on the ASX is that algorithms enable prices to be
controlled artificially.

CuDeco Trading - Price Chart 4 November 2014

CommSec (COMM) Downticks

0

-1
On 4 November only 206,270 shares traded yet COMM executed 72.7% of all DT trades.
CommSec DT trades were spread evenly with the effect of regularly pressuring prices
-2

CuDeco Broker Selling Profiles COMM was the leading seller with 104,535 sales or 50.7%
80% of all selling. However, the register indicates that only 10.9%
4 November 2014 of COMM’s selling represented retail trades.
70%

60% Despite a slight bias CommSec DTs are more likely to be the result
towards non-genuine of institutional algorithms than retail selling.
50% selling in its broker
40% selling profile COMM
was influential in
30% controlling prices. CommSec
Institutional Sales 10.9% Retail
20%
89.1%
10%

0%
 8

CuDeco - 6 Nov 2014 Trading

Trading on 6 November 2014 showed COMM algorithms being tuned much more aggressively in
controlling prices. Trading commenced with a forced sell down by a COMM operator at the
commencement of trading, and then after a recovery prices were capped by COMM algorithms over the
remainder of the day.

CuDeco Trading - Price Chart 6 November 2014

116

114

112

110

108
Trading where a retail
106 holding was dumped
into the market by a
104 COMM operator

102
CommSec (COMM) Downticks
-0.5

-1.5
COMM algorithmic DT trades were instrumental in capping prices
-2.5

81% of these DT trades were well under $500 in value (i.e., they represent institutional trades)

CuDeco Broker Selling Profiles

80%
6 November 2014
70%

60%
Trading on November 6 showed
Dominant selling preparedness by a CommSec
50% by CommSec operator to disadvantage retail
40%
clients and to maintain prices at
artificially low levels.
30%
The shares dumped into the
20% market recorded a long term
low in price.
10%

0%

% of Downtick Trades
% of All Selling
 9

CuDeco - 7 Nov 2014 Trading

The dramatic price falls on 3 November (13.5 cents) and initially on November 6 (11.5 cents) may have had
the effect of triggering margin and/or stop loss selling. Accordingly, volatile trading on 7 November may
have involved forced sales.

CuDeco Trading - Price Chart 7 November 2014

117
116 CommSec was again influential with trading that had
115 the effect of controlling prices.
114
113
112
111
110
109
CommSec (COMM) Downticks
0

-0.5

-1

-1.5 Strategic, COMM Downtick trades were pivotal in constraining prices.

CommSec was responsible for 87.5% of all Downticks yet contributed only 21.6% of selling volumes. Just
over half of CommSec’s selling could be attributed to retail holders although most DT trades are almost
certainly the result of institutional trades.

CuDeco Broker Selling Profiles

100%
7 November 2014
90%

80% Non-genuine selling

by CommSec The continuous pressure
70%
applied to prices after early
Most DT trades were 60% highs were achieved is
the result of 50% quite telling. Streams of
institutional algorithms. small Downtick trades form
40%
that point until the close of
30% trade, confirms the
presence of a non-genuine
20%
seller acting within
10% CommSec.
0%

% of Downtick Trades
% of All Selling
 10

CuDeco – 10 Nov 2014 Trading

After a price recovery in early trading on 10 November CommSec algorithms kicked in and then served to
reduce prices over the remainder of the day. It was by far the most dominant broker in causing price falls.

CuDeco Trading - Price Chart 7 November 2014

121
120
119
118
117
116
115 Prices rose when
COMM was absent
114
from the market in
113 forcing DT trades.
112
CommSec (COMM) Downticks
0

Strategic, COMM Downtick trades were pivotal in constraining prices.

-2

In light trading on November 10 (391,152 shares traded) COMM was responsible for 69% of all Downticks
and 39% of all selling. The register shows that CommSec retail clients would have been responsible for just
over half of the selling by volume.

CuDeco Broker Selling Profiles

80% 10 November 2014
70%
The register confirmed
that the smallest retail 60%
parcel sold was for 1,500 Trading again appears
shares. 50%
designed to restrict prices
It means that practically 40% i.e., the actions of a non-
all of CommSec DT genuine seller within
trades (97% of which 30%
CommSec.
were much less than
1,500 shares in size) 20%
were the result of
10%
institutional algorithmic
sales. 0%

% of Downtick Trades
% of All Selling
 11

CuDeco – 14 Nov 2014 Trading

On 14 November, prices were constrained in early trading until an extended recovery took prices to $1.20
after bottoming out $1.165. Prices were then capped over the rest of the day by CommSec algorithms.

CuDeco Trading - Price Chart 14 November 2014

120.5
120
119.5
119
118.5
118
117.5
117
116.5
116
CommSec (COMM) Downticks
0

-1 Strategic, COMM Downtick trades capped prices in afternoon trade.

UBS Securities (UBS) Downticks

0

UBS DTs restricted prices in earlier trading.

-1

Again in light trading (436,121 shares traded) COMM was responsible for 53% of all Downticks from 31%
of all selling. However, the register suggests that 94% of all CommSec selling was on behalf of
institutions, not their retail clients.

CuDeco Broker Selling Profiles

60%
Registry Comparisons
14 November 2014

50%

CommSec
40%
Institutional Sales
93.5%
30%

20%

10%
In opposing price rises COMM’s DT trades suggests activity
0%
that would have helped to maintain an artificial price.
As per previous history

% of Downtick Trades
% of All Selling
 12

CuDeco – 21 Nov 2014 Trading

In light trading on 21 November (only 413,716 shares changed hands in active trading), prices increased at
the opening before being reversed and later capped over the remainder of the day. Price suppression was
mainly related to CommSec’s algorithmic sell trades that were executed in the manner of a non-genuine
seller. The sell trades sought to disrupt prices rather than to maximise the proceeds of sales.

CuDeco Trading - Price Chart 21 November 2014

144

142

140

138

136

134

132

130

CommSec (COMM) Downticks

0

-2
Strategic, COMM Downtick trades helped to bring down prices and then to restrict them over the rest of the day.
capped prices in afternoon trade.

CuDeco Broker Selling Profiles Institutional net-selling by COMM was mostly

accumulated by institutional brokers. It raises
70% concerns regarding potential wash trades.
21 November 2014
The company register indicated that only 28% of
60% CommSec selling was retail related.
Bias towards non-
50%
genuine selling by
COMM
Broker Sells Buys Net Buys
40%
ITG 0 84,224 84,224
GS 6,150 64,151 58,001
30%
MORG 0 50,000 50,000
20% SUSQ 13,701 50,126 36,425

Broker Sells Buys Net Sells

10%
COMM 184,068 16,922 -167,146
0% CSUI 88,929 30.540 -58,389

If not wash trades, then convenient trades between

nominee accounts to facilitate control over prices
rather than to genuinely exchange shares.
% of Downtick Trades Audits are required to clarify the situation.
% of All Selling
 13

CuDeco – 1 Dec 2014 Trading

On December 1, the trading of 825,048 shares resulted in a 26.5 cent price fall (i.e., an 18.9% slump).
COMM was a leading supplier of DT trades (45.5%) from 19.2% of all selling

CuDeco Trading - Price Chart 1 December 2014

143
The share price was
138 reduced by 6.5 cents
The slump was caused through a DT sale of
An 18.9% share by a single DT trade
133 price slump just 540 shares

128 The slump wasn’t associated

with a news event.
123

118

113
CommSec (COMM) Downticks
0
-1
-2
-3
-4
-5
-6
The majority of DT trades were well under the minimum parcel size required for retail sales

CuDeco Broker Selling Profiles

Again the register shows that only 30% of all
50% COMM selling corresponded to retail sales,
1 December 2014
45%
which means that institutional algorithms
were mostly responsible for COMM DTs.
40% A strong bias towards
non-genuine selling
35% by CommSec
30%
25%
20%
The nature of institutional trades on
15%
December 1, with RBS Morgan,
10% MACQ and COMM all heavy sellers
5% while Goldman Sachs was a heavy
0% buyer requires an assessment as to
whether wash trades played a part
in price falls.

% of Downtick Trades
% of All Selling
 14

CuDeco – 3 Dec 2014 Trading

On December 3, the trading of 543,559 shares saw an initial price rise which was capped later in the day and reduced
at the close. Control over prices was achieved with few DT trades than on previous days.

CuDeco Trading - Price Chart 3 December 2014

130
128 A capped share price.
126
124
122
120
118
116
114
112

CommSec (COMM) Downticks

0
-1
-2
Strategic price controlling trades
-3

CuDeco Broker Selling Profiles

The register shows that 15.8% of all COMM selling
60%
by volume was on behalf of just three retail clients.
3 December 2014 It means that share price falls would mostly have
been the result of institutional trades.
50%
A strong bias towards
non-genuine selling
40% by CommSec Breakdown of CommSec Selling

30% CommSec
CommSec Retail
20%
Institutional Sales 15.8%
84.2%
10%

0%

Also, around 60% of

COMM Downtick trades
were well under the
% of Downtick Trades $500 retail limit.
% of All Selling
 15

CuDeco – 5 Dec 2014 Trading

Price capping behaviours by COMM algorithms were again a prominent feature of trading on December 5, 2014.
Non-genuine selling would have contributed to the maintenance of an artificial price in the trading of Cudeco securities.

CuDeco Trading - Price Chart 5 December 2014

138
136
134
132
130
128
126 The price slump resulted from
a trade of just 500 shares
124
122
CommSec (COMM) Downticks
0
-1
-2
Not the actions of a
-3 genuine seller
-4 looking to maximize Price capping DT trades
the proceeds of sales occurred once prices settled
-5

CuDeco Broker Selling Profiles COMM was responsible for 63.3% of all price falls from
31.7% of all selling, and the register suggests that by
70% 5 December 2014
volume, about half of its selling was by retail clients.
60%
A strong bias towards
50%
non-genuine selling
by CommSec
40%
However, of the CommSec trades that
resulted in a fall in price, 91% had parcel
30% sizes below the $500 limit for retail
clients. i.e., they were institutional
20%
Downtick trades.
10%

0%

% of Downtick Trades
% of All Selling
 16

CommSec institutional selling algorithms were responsible for large numbers of price falls (i.e.,
Downticks) which coincided with share price slumps and capped prices.

Much of the selling by CommSec was highly dubious in that patterns of selling regularly
contradicted how genuine sellers operate.

Non-genuine selling by CommSec selling was more pronounced on days when the share price
suffered steep declines i.e., they were largely responsible for the falls during this period.

Non-genuine selling leads to the creation of artificial prices, as evidenced by anomalous trading
and registry data and chronic share price under-valuations over the period.

As the setting and maintenance of artificial prices is illegal, CommSec trading during this period
requires a full investigation.