FSA clamps down on international 'spoofing'


Click to follow

A number of firms have had assets frozen as part of the Financial Services Authority's drive to clamp down on market manipulation.

The regulator said it believed that the fund manager Da Vinci Invest Ltd, which is registered in the UK but based in Switzerland, and a related Singapore-based firm Da Vinci Invest PTE Ltd, along with Seychelles-registered Mineworld Ltd and three individuals – Szabolcs Banya, Tamas Pornye and Gyorgi Brad – had committed market abuse by using a technique to mislead the market about the supply and demand of shares.

The individuals reside in Switzerland and/or Hungary. The conduct took placed between August 2010 and July this year, according to the FSA, which obtained an injunction on Wednesday.

The manipulation was done using a technique known as "layering" or "spoofing", which saw the placing of large orders for shares which the accused had no real intention of allowing to trade. But the orders triggered share price movements.

"The traders would then take advantage of the price changes by repeatedly buying shares (when the share price had been manipulated downwards) and selling them (when the share price had been manipulated upwards)," the FSA said, adding that its investigation and court case will continue. "At the same time, they would delete the initial orders which had manipulated the share price."