The Nova Scotia Securities Commission settled today with a man who admitted to artificially improving the bid price of a stock, using his wife’s online trading account.
Between October 1, 2008 and December 31, 2008, John During entered nine buy orders in the account of his spouse for shares of Angoss Software Corp. All orders were entered within 30 minutes of market close, eight of them within the last minute. Seven of the nine orders established the closing bid price, only one order was filled, and all orders improved the bid price.
During did not profit from these trades, and he was not aware that what he was doing was illegal. However he admits to entering the orders for the purpose of artificially improving the bid price of the shares, and so he violated the Nova Scotia Securities Act.
The lesson: you don’t have to be a professional to be held accountable to securities laws. If you are going to trade in your own account, you need to follow the rules, or face the consequences.
Under today’s order and settlement agreement, During will pay an administrative penalty of $2,500 and $1,000 in costs connected with the investigation and proceedings. He is prohibited from trading securities for two years, except through a representative registered with the Commission.
It is important for anyone trading on their own behalf to be aware that they must abide by the same rules as professional traders. Ensure that you are aware of the rules in your jurisdiction. You may also want to consider taking an investing course, such as the Canadian Securities Course – a small investment for some valuable knowledge.
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