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A Melbourne man has been convicted of dishonest conduct after he was found manipulating the criteria for companies seeking to be listed on the ASX.
In the first criminal prosecution of this kind, Mark Damion Kawecki of Frankston, Victoria has been banned from managing corporations for five years and fined $30,000.
Under ASX rules, a company must have a minimum number of unrelated shareholders before it can be listed. This "spread requirement" is to demonstrate sufficient investor interest and a basic level of liquidity.
According to the Australian Securities and Investments Commission (ASIC), Kaweki applied for shares in four companies that were attempting an initial public offering (IPO) or a relisting.
ASIC alleged that these applications had false information about the beneficial holder of the stocks or false addresses.
Prosecutors told the court that this dishonesty was to artificially meet the ASX's spread requirement.
Kaweki was charged and pleaded guilty to two counts of dishonest conduct, breaching sections 1041G and 1311(1) of the Corporations Act.
He was a financial adviser at the time of the offences, but back in 2018, ASIC banned him from practising for seven years.
ASIC reminded all parties participating in an IPO or relisting of their obligations to follow both the ASX Listing Rules and the Corporations Act 2001.
