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CUDECO SHAREHOLDER RESEARCH

CHAPTER 8:
ASIC COMPLAINTS CONCERNING CuDECO TRADING


8.4 A Review of CuDeco Trading Issues
Associated with M&G Selling their Substantial Holding






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 PUBLISHED RESEARCH


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.
6.5 The Impact of Institutions on the CuDeco Register
Chapter 7: Research Into Other ASX Companies
7.1 Research Findings in Relation to CDU, LYC, BBG and EGP
7.2 Further Research Into ASX 200 Companies - Linc Energy (LNC)
7.3 ASX 200 Company Research Billabong Broker Data (BBG)
7.4 ASX 200 Company Research Lynas Broker Data (LYC)

Chapter 8: ASIC Complaints Concerning Trading in CuDeco
8.1 ASIC Complaint 2013-1 A review of 2.5 Years of Trading
8.2 ASIC Complaint 2013-2 Trading Associated with M&G Buying 2010
8.3 ASIC Complaint 2013-3 Trading During the Period January through May 2013
8.4 ASIC Complaint 2013-4 Trading Issues as M&G Sold Out June/August 2013
Complaint Concerning Excessive Levels of Short Selling on August 21, 2013


8.1 ASIC Complaint 2013-1


3

INTRODUCTION

Research into a number of ASX companies has overwhelmingly demonstrated that share price manipulation is
occurring on the ASX that is not being appropriately addressed by ASIC who is the appointed regulator for Australias
financial markets. <Refer : Chapter 7 Research Papers> .

Research into the mining company, CuDeco Limited, has provided additional insights into trading through
comparisons between Iress broker data and CuDeco registry data - information that is not readily available to a
majority of investors who rely on public sources. The outcomes of research are particularly disturbing as they clearly
contradict official reassurances about the financial markets in that they demonstrate that trading on the ASX is not
fair and that the majority of trading is non-transparent. Also, investors are being grossly misled about the impact of
high frequency trading algorithms on the market.

ASIC Complaint 2013-4 assesses trading coincident with a substantial shareholder of CuDeco disposing of their
holding. Sales by the M&G Group resulted in severe price falls and stripped $0.5 billion from the market
capitalization of the Company in the period June 12 through August 21. This complaint follows concerns arising from
M&G accumulating shares back in 2010 (Refer: ASIC Complaint 2013-2) and concerns about trading during the
months prior to M&G disposing of their holding (Refer: ASIC Complaint 2013-3).

At issue are the dubious trading behaviors that have resulted in a substantially compromised market for CuDeco
securities, and a chronically undervalued share price. The behaviors are associated with:

securities lending and the manipulative short selling practices that accompany it (as distinct from short
selling that is fairly implemented);
high frequency algorithmic trading programs that facilitate unfair levels of control over prices whether it be
in active trading or during auctions;
extensive dark pool trades and other dark off -market activity that facilitated the transfers of shares while
avoiding price discovery; and
issues concerning market transparency, market integrity and market regulation, that collectively made it
possible for artificial prices to be imposed on the market.

The central issue associated with M&G disposing of their substantial shareholding was the seeming ineptitude of
industry professionals in the way the sale was conducted. The approach adopted suggests motivations far removed
from the exiting of a major investment for the best possible returns.

The average price received by M&G after dumping over 30 million shares on the market was $1.76, yet the share price
stood at over $4.00 immediately before the decision to sell. The selling crystalized losses of around $50 million on the
M&G investment. However, a prudent profit-maximizing approach focussing on finding a suitable substantial investor
interested in an off-market sale for most or all of the holding, would have been financially more beneficial and simpler
to execute. It is in fact the way business is normally done when a buyer is required for a large tranche of shares,
particularly when it represents a strategic stake in an emerging company.

The loss-making disposal by M&G came at a time when the Company was forging ahead operationally and was well
placed as an emerging producer. The recent line of credit secured from Minsheng Bank strongly demonstrates
industry recognition for the Companys Rocklands project, as does a recent underwriting agreement for a rights issue
at $2.50, representing a 42% gain over M&Gs average exit price. However, M&G ignored company fundamentals
and effectively trashed their investment through conducting a fire sale. Their actions make absolutely no sense
unless there was an objective other than profit-maximization.

M&G is one of the worlds leading fund management groups and has an intimate understanding of how markets
work. They would have been aware that companies positioned where CuDeco was in its development cycle, undergo
rapid price appreciation as mine commissioning draws near. Yet they sold in the most destructive manner possible as
far as the share price was concerned. Traditional avenues to dispose of a major holding expeditiously and for the
best possible returns didnt appear to be explored, and nor was the Company approached; it would have been
strongly motivated to facilitate an orderly exit from the register if given the opportunity to assist.

Broker trading trends also suggest efforts were made to reduce the share price as far as possible as the major holder
departed the register. This was accomplished through high levels of churn trades, elevated levels of short selling, and
selling by some brokers that deliberately targeted lower prices through the settings applied to proprietary trading
algorithms.
4


For example, broker JP Morgan, who is affiliated with the custodian (JP Morgan Nominees) who held a good portion
of M&Gs holding, were particularly aggressive with trading designed to force lower prices. Their relationship with
the custodian meant little as with the selling of just 374,610 shares they forced more falls in price (i.e., Downticks)
than Deutsche Bank did, who recorded around 4 million sales over the period. JP Morgan was able to be so
influential in forcing price reductions through implementing large number of small Downtick trades often with
parcels consisting of just 1 or 2 shares.

JP Morgan were not alone in attempting to reduce prices as much as possible, and the combined activity of brokers
trading in this way, resulted in the setting and maintenance of artificially low pricing levels as the M&G holding was
unwound.

Another unusual trend in relation to share price falls was that Morgan Stanley (MSDW), the large seller in the market
on behalf of M&G, tended to avoid downticks in price with its selling. It is a strange development, especially given
that it was instrumental in forcing Downticks in the period January through May 2013, immediately prior to the M&G
selling. The trading behaviours suggest an orchestrated approach to trading, involving high levels of collusion and
resulting in an artificial and heavily compromised market.

Also of concern is the extent of insider trading that appears responsible for large volumes of trading churn similar
dubious trading patterns occurred as M&G accumulated their major holding <Refer: ASIC Complaint 2013-2> and
the likelihood that insider knowledge was responsible for high levels of short selling. The patterns strongly suggest
collusion by brokers in facilitating each others non-genuine trades, particularly as the selling by M&G of a 33.57
million share holding saw additional sales of 38.87 million shares, mainly by institutional interests.

The additional selling represented short sales and other sales by institutions which were matched by institutional
buying, but all in all, the large volumes of trading didnt result in changes to beneficial ownership when considered as
a group. The selling by M&G, however, did have an impact on the register with sales splitting approximately 50:50
between institutions and retail investors.

Short selling accompanying the selling by M&G suggests that the M&G disposal was front run by brokers with inside
knowledge who sold to force prices lower before covering their sales through purchases from M&G.

Daily short sales on August 21 which amounted to 1.53 million shares, represented the highest level in over 5 years of
trading including trading through the GFC, the August 18 resource announcement where there were high levels of
confusion, and the 2011 flash crash. It makes no logical sense for shorting to be taking place at extreme levels with the
share price already severely undervalued and at a 5-year low, while at the same time the Company was gaining in
strength operationally. However the high levels of short sales on August 21 which represented 59.3% of all selling that
day, coincided with a large tranche of shares put through the market after the close of trading the same day. The
incident strongly suggests both insider trading and share price manipulation related to the placement.

Suspicions about the M&G disposal are further strengthened by the price-capping behaviors that have continued
unabated since M&G left the register on August 21. The circumstances surrounding the M&G disposal are perhaps
best summed up by an Occams razor approach where the simplest explanation is often the most accurate. Such an
approach would most likely conclude that the M&G sales were intended to cause maximum disruption to the share
price, rather than the most profitable exit price.

In any case, concerns about the disposal of the major holding come on top of concerns about trading irregularities
that have been documented for a period exceeding 3.5 years. The concerns provide an excellent opportunity for the
regulator to intervene and to address issues that have impacted CuDeco unfairly, and which are impacting stocks
across the entire market. The Chairman of ASIC, Mr Greg Medcraft, is on the public record as being focused on
protecting the retail investor particularly where the impact on the market is considerable and where lots of people
have lost lots of money <Refer Link: ABC Lateline Interview >

Certainly half a billion dollars unfairly stripped from the market capitalization of an ASX 200 company and over 7,000
shareholders being severely impacted, combined with widespread data anomalies, ought to qualify for strong
regulatory intervention, especially as there are laws prohibiting share price manipulation.

5


CONTENTS


Section 1 ..... Pg. 6
8.4.1 OVERVIEW
Section 2 ........ Pg. 28
8.4.2 THE IMPACT OF M&G SELLING Based on Trading and Registry Data
Section 3 Pg. 55
8.4.3 DOWNTICK TRENDS ACCOMPANYING M&G SALES
Section 4 Pg. 75
8.4.4 DAY BY DAY TRADING SUMMARY

Appendix 1 Pg. 94
8.4.5 ASIC Complaint Concerning Short Selling On August 21, 2013
Appendix 2 Pg. 96
8.4.6 Broker Trading Data June 12, 2013 through August 21, 2013


6


Section 8.4.1

OVERVIEW
A Summary of Issues Associated with M&G Selling Their Substantial Holding

(June 12 through August 21, 2013)

7

8.4.1.1 INTRODUCTION
The recent disposal of a major shareholding in CuDeco by the M&G Group has resulted in the share price
suffering very substantial losses as shown below. The data provides a share price summary of the period
immediately before the M&G selldown commenced, and includes prices over the course of the selling
program, culminating in a large crossing after the close of trading on August 21 to complete the selling.
The losses have been very substantial irrespective of whether they are measured from the recent high on
May 22, or the price on June 11 immediately before the selldown began.
CLOSING PRICES

SHARE PRICE COMPARISONS
Day -2013 Price

Reference May 22

Reference June 11
May 22 $4.07

-

-
Jun 11 $3.38

-17.0%

-
Jun 12 $3.26

-19.9%

-3.6%
Jun 28 $2.00

-50.9%

-40.8%
Jul 15 $1.78

-56.3%

-47.3%
Jul 31 $1.57

-61.4%

-53.6%
Aug 8 $1.37

-66.3%

-59.5%
Aug 21 $1.56

-61.7%

-53.8%


The selling of the M&G holding and the half a billion loss in market capitalization coincided with the
Company making strong progress operationally and with a continuing positive outlook for copper. Trading
however has been associated with a number of issues that in the absence of plausible explanations suggest
share price manipulation throughout the entire period M&G sold their holding.
Certainly, trading trends and the corporate approach adopted in disposing of the major holding do not
correlate with what might be expected from a genuine attempt to dispose of a major holding to achieve the
best possible outcome. In fact the opposite has been the case with the trading algorithms of some brokers
continuously functioning in a way that has resulted in the setting and maintenance of artificial prices over the
entire period. Based on the trends evident in trading and registry data it could be strongly argued that the
disposal has been handled as a fire sale with little attempt made to maximise returns. Also, informed insiders
have been able to cause maximum damage to the share price through extensive short selling.
Certainly, the market has not been fair and reasonable throughout the period that the holding was sold
down and the share price has not fairly reflected the fundamentals of the Company.

M&G Selling
Market
Capitalizations

May 22
$828,715,558
Aug 21
$319,999,077
$0.51 billion reduction

Aug 21
$319,999,077

The observations raised through research draw attention to issues that have impacted the trading in CuDeco,
and for that matter, many stocks on the ASX, as the issues are systemic. Research into CuDeco using empirical
data has effectively demonstrated how share price manipulation is able to take place on the ASX.
Although some background material is provided to put trading into context as falls of 69.6% were inflicted on
the Company since mid-March 2013, during a period where the Company was making solid progress on all
fronts, the focus of research has been to bring to attention severe data anomalies that are a feature of all
trading data. While conjecture can attempt to explain odd trading behaviours such as The share price falls
were because of a substantial holder selling out, widespread data anomalies still have to be explained, and
that can only be done satisfactorily through the forensic auditing of accounts. The consistent outcome of
research is that the only plausible explanations to explain data anomalies and counterintuitive trading trends
are those that address share price manipulation.
8

8.4.1.2 COLLUSION ISSUES or CARTEL ACTIVITY
Empirical trading data strongly suggests complicity between a number of brokers acting in concert to drive
prices lower. Their behaviours resemble that of a cartel of interests or a group of entities colluding with
their trading to control pricing outcomes.

It is noted that broker Instinet was fined for spurious trading with a slap-on-the-hand fine that did not
recognize the full impact of manipulative algorithmic trades, especially when combined with trading by
other brokers. <Refer: Broker Cops Fines Over High Speed Trades>

Also, despite wash trades being illegal, no attempt appears to have been made by the regulator to apply
the full extent of the law to the manipulative trading activity identified in regards to Instinet.

The Australian Securities and Investments Commission has fined Instinet Australia - an agency-only
institutional broker for allowing one of its high-speed trading clients to issue hundreds of ''wash trades'' to
the market in late 2010 without stopping those trades or alerting authorities to them.
Wash trading is considered a form of stock manipulation in which an investor simultaneously buys and sells
the same shares to artificially increase trading volume and the stock price <Refer Link>

8.4.1.3 DUBIOUS ALGORITHMIC TRADES
Explanations offered by the regulator to describe what algorithms actually do, have used language like:
algorithmic trading often break down larger orders to minimize market impact by trading a large number of
small orders throughout the day. While the transactions can appear unusual when looked at in isolation, they
are not necessarily indicative of market manipulation. <Source: from ASIC response to shareholder concerns>
Such explanations dont take into account the deliberate targeting of lower prices by large numbers of
small trades which continuously force Downticks. The reality in the markets is that algorithmic trades are
not benign at all. In fact they are heavily engaged in working prices artificially lower in stocks across the
ASX, and if it suits trading agendas, they can be used to help cap prices or to force prices higher as well.
Daily trading in CuDeco during the period M&G sold their substantial holding has delivered maximum price
reductions through the use of large numbers of small trades by particular brokers that have heavily
targeted lower prices. Tactics appear to have involved trades back and forth between nominated sellers
and preferred buyers (which rotate from one day to the next) where match-ups between affiliated trading
partners are somehow facilitated by HFT algorithms. The evidence is found in highly anomalous data
trends. Large volumes of small broker crossings put through the market to cause price reductions have
been used as well.
The cartel aspect of trading is accentuated by:
o brokers within a small group, continuously rotating their roles from one day to the next in supplying
large numbers of small Downtick trades that have pressured the market ;
o Morgan Stanley, who exclusively represented M&G, the largest seller in the market, surprisingly wasnt
associated with Downtick trades anywhere near the extent that their large selling profile would
suggest. It suggests a tag-team approach to trading where other brokers have set lower prices for M&G
to then sell into. It is strange behaviour for a seller if they were intending to maximize returns.

An aspect of algorithmic trading not addressed in public explanations is the role they play in forcing share
prices to grossly undervalued levels. The tactic is extremely prevalent, with trading back and forth amongst
affiliates pushing prices inexorably lower while regulatory authorities fail to acknowledge any wrongdoing.
<Extract>
9

The targeting of lower prices is demonstrated in charts of trading that compare broker involvements with
the selling of Downticks and the overall selling profiles of brokers generally.

Suspicious trading is evident when:
o small amounts of selling are associated with large numbers of Downticks; and
o large amounts of selling are associated with relatively few Downticks.
Such trends when sustained over the longer term defy statistical averages. They point to a skewing of data
that can only be explained through highly organized interactions between broker affiliates, rather than
random interactions between genuine buyers and genuine sellers acting independently. The result is
artificial price creation at levels that have been allowed to overwhelm the CuDeco market.










Dubious trading is also evident in charts that compare the buying of Downtick transactions to the overall
buying profiles of brokers.
Suspicious trading is also evident when:
o Small amounts of buying are associated with large numbers of Downtick purchases; and
o Large amounts of buying capture few Downtick purchases.
















% of DTs as Buyers

% of All Buying



OVERALL OBSERVATIONS
Supported By Trading Data

The various anomalies demonstrate
preferential trading between designated
sellers and preferred buyers that is
distributed by HFT algorithms.

Sellers of Downticks have sought lower
prices rather than the best return on sales.

Buyers of cheaper DT sell trades have
recorded phenomenal success compared to
their relatively small buying profiles.

HFT algorithms are able to select trading
partners for certain transactions and avoid
others.

Many of the trades represent non-genuine,
manipulative trading activity.


0%
5%
10%
15%
20%
25%
30%
Small volumes of
buying, with large
numbers of DT
buys
Large volumes of
buying, with few
DT buys
Downtick Purchases compared to All Buying

0%
10%
20%
30%
40%
50%
60%
Small volumes of selling,
achieving large numbers of DTs
Reasonable volume of
selling, but with few DTs
Downtick Sales compared to All Selling
Genuine selling has been defined by the
High Court as selling which strives to
achieve the highest return on sales.

Large numbers of small transactions
(which in total only represent relatively
small amounts of selling) that achieve
large numbers of Downticks in price is
far from genuine as per the High Court
clarifications.

Such selling appears to be designed to
target lower prices, not the best returns
available, so therefore can only be
regarded as being manipulative.


% of DTs as Sellers

% of All Selling



Typical daily trends as M&G sold
10

8.4.1.3.1 DUBIOUS DOWNTICK SELLING TRENDS BY MORGAN STANLEY (MSDW) IN ACTING FOR M&G
The selling by MSDW over the 50 days of trading taken to dispose of the M&G holding is summarized in the
chart below. Remarkably, the largest seller in the market was able to avoid Downticks suggesting that other
brokers were front running MSDW selling. However such trading strongly suggests some brokers were
trading on the basis of insider information and with confidence that the entire holding would be sold.












Revealingly, MSDWs selling profile in the period January through May 2013 that preceded the M&G selling
demonstrates a completely different approach to trading. The 50 most anomalous trading days are shown
below with trading on other days also having similar daily profiles (Refer Section 8.4.3.7.3).












Jun 12 Jul 1 Aug 2 Aug 21
2013

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
MORGAN STANLEY (MSDW) Daily Downtick Sells versus Daily Selling Profile while Selling for M&G

% of DTs as Sellers

% of All Selling




MORGAN STANLEY (MSDW) Daily Downtick Sells versus Daily Selling Profile (Jan to May 2013)

% of DTs as Sellers

% of All Selling



Generally, MSDW was
associated with high
levels of selling but with
reduced DT profiles.
MSDW Trends
During M&G
Sales
MSDW Trends
Before the
M&G Selling
PERIOD Avg. DTs % Avg. % Selling
Prior to M&G Selling 12.4 % 4.9%
During M&G Selling 18.5 % 37.0%
Increase + 49 % +653%

Comparisons
Between the
Two Periods
Oddly, an increase of 653% in average
daily selling market share has resulted in
only a 49 % increase in daily DT profiles.
January through May 2013
Generally, MSDW was associated with high levels of anomalous
Downtick Sales but with low selling profiles. The question Who
were they representing? is now of particular importance.
11

The two charts raise serious doubts about the integrity of trading taking place, as logically, it would be
expected that a large selling presence in the market ought to have resulted in chart trends that reflect
dominant DT profiles, perhaps more in keeping with what occurred from January through May.
If the selling on behalf of M&G where Downticks tended to be avoided was legitimate, then what does it
say about the selling prior to the M&G sales where MSDW very significantly impacted prices?
Clearly something was radically different about the tuning of algorithms between the two periods. At first
glance, it would appear that the MSDW selling from January through May was focussed on pressuring prices,
and that during the M&G disposal, other brokers were given that role while MSDW sold large volumes. The
situation strongly identifies with non-genuine trading and the setting and maintenance of artificial prices.
8.4.1.3.2 DUBIOUS LEVELS OF DOWNTICK SALES BY CREDIT SUISSE (CSUI)
Coinciding with MSDW trading trends, one of the brokers associated with highly anomalous Downtick
trends (as sellers of Downticks) was Credit Suisse. Their trading both before M&G sold (i.e., January to May
2013) and while M&G were selling (i.e., June/August 2013) is compared below.




















JP MORGAN SELLING TRENDS
January through May 2013
CREDIT SUISSE (CSUI) Daily Downtick Sells versus Daily Selling Profile (Jan to May 2013)

0%
5%
10%
15%
20%
25%
30%
35%
40%
CREDIT SUISSE (CSUI) Daily Downtick Sells versus Daily Selling Profile (Jun 12 to Aug 21, 2013)
Clearly, CSUI has been a major force in pressuring prices across both periods reviewed, which makes the radically
changed trading patterns by MSDW all the more remarkable. Also, given the pressure that was applied to prices by
their trading algorithms it raises questions about who CSUI were representing during both periods?

Generally, CSUI was
associated with high
levels of anomalous
Downtick sales but
with low selling
profiles. i.e., Trading
that targeted lower
prices
Trading Trends Prior to M&G Selling
Trading Trends During M&G Sales
High levels of DTs also
corresponded to low selling
profiles, again suggesting the
targeting of lower prices

% of DTs as Sellers

% of All Selling



Jun 12 Jul 1 Aug 2 Aug 21

12

8.4.1.3.3 DUBIOUS LEVELS OF DOWNTICK SALES BY JP MORGAN (JPM)
Another broker who was instrumental in forcing downward movements in price with limited amounts of
selling was JP Morgan (JPM). Downtick trends associated with their trading while M&G were selling are
also summarized below. Importantly, JPM had no major influence in trading between January and May in
the period that preceded the M&G selling. The involvement by JPM in adding to pressure on prices is an
important development as they were an affiliate to custodians holding shares on behalf of M&G.
The following question requires answers. Why did JPM trade in such a way that would have made it
difficult for M&G to maximize the proceeds from selling their major holding?










8.4.1.3.4 DUBIOUS LEVELS OF DOWNTICK PURCHASES BY CREDIT SUISSE (CSUI)
The selling of large numbers of transactions that result in price falls necessarily requires buyers on the other
side of such trades to facilitate the transactions. When particular brokers emerge as the prominent buyers of
Downtick transactions, but from a perspective of only minor buying profiles in the market, the patterns
present as statistically implausible, especially based on assumptions that trading is fair and genuine.
The fact that algorithms purposefully direct sales to preferred buyers means that collusion and share price
manipulation need to be considered when assessing trading. Three of the major buyers of Downticks through
the period that M&G sold their holding are summarized in the following charts. (Refer Section 8.4.3.11)








Jun 18 Jul 1 Aug 2 Aug 21


JP MORGAN (JPM) Daily Downtick Sells versus Daily Selling Profile (Jun 18 to Aug 21, 2013)
Trading Trends During M&G Sales

% of DTs as Sellers

% of All Selling




0%
5%
10%
15%
20%
25%
30%
35%
CREDIT SUISSE (CSUI) Daily Downtick Buys versus Daily Buying Profile (Jun 12 to Aug 21, 2013)
Jun 12 Jul 1 Aug 2 Aug 21


% of DTs as Buyers

% of All Buying



High levels of DT Sell
trades corresponding to
very low selling profiles
High levels of DT
buys but generally
low buying profiles
CSUI is seen to be an active
contributor to falls in price, both as
a seller and as a buyer of DT trades
JPM with just 374,610 total sales
were responsible for more falls in
price than DMG who sold 4 million
shares, and yet just 22,067 of JPM
sales were involved with DTs
13

8.4.1.3.6 DUBIOUS LEVELS OF DOWNTICK PURCHASES BY VIRTU FINANCIAL (VIRT) AND JP MORGAN (JPM)





















.

0%
5%
10%
15%
20%
25%
30%
35%
40%
VIRTU FINANCIAL (VIRT) Daily Downtick Buys versus Daily Buying Profile (Jun 12 to Aug 21, 2013)
Jun 12 Jul 1 Aug 2 Aug 21


% of DTs as Buyers

% of All Buying



High levels of DT buys
but generally coinciding
with low buying profiles

0%
5%
10%
15%
20%
25%
30%
35%
JP MORGAN (JPM) Daily Downtick Buys versus Daily Buying Profile (Jun 17 to Aug 21, 2013)
Jun 17 Jul 1 Aug 2 Aug 21


% of DTs as Buyers

% of All Buying



JPM is also seen to be an active
contributor to falls in price, both as
a seller and as a buyer of DT trades
Again, high levels of DT
buys but generally
coinciding with low
buying profiles
Further anomalous trends concerning trading that has targeted lower prices are provided in Section 8.4.3.
Trading needs to be considered in light of what a genuine seller seeks to achieve when disposing of shares,
as clarified in a recent decision by the High Court of Australia <REFERENCE LINK> i.e., genuine sellers seek to
achieve the best possible prices. There can be no argument with such an approach to trading as it
underpins what investment is meant to be all about. However the selling by M&G in disposing of a major
holding hasnt achieved that, and nor has the selling by other brokers who have dumped large volumes on
the market which generally hasnt shown up on the register in terms of changes of ownership.
The activity of JPM in facilitating lower prices, both as a seller of Downtick trades and as a buyer of
Downtick trades, cannot be justified in terms of genuine trading. The data is extraordinary and suggests
that their trading is non-genuine and driven by motivations other than attempting to achieve profits.

For example, with just 374,610 sales overall, JPM achieved more DTs than Deutsche Bank with its 4 million
sales, and with just 264,681 purchases they achieved the same number of DT buys as Citigroup who bought
4.2 million shares and double the amount of DT buys as Deutsche Bank who bought 4.8 million shares.
14

8.4.1.3.7 DUBIOUS TRADING PATTERNS IMMEDIATELY PRIOR TO M&G SELLING THEIR HOLDING.
Falls in the CuDeco share price from May 22 up until June 11, 2013, immediately prior to M&G selling their
substantial holding are shown in the chart.











The brokers associated with anomalous trading trends, just prior to M&G commencing their selling, are
evident in the charts that compare DT involvements with selling & buying profiles.















$3.20
$3.30
$3.40
$3.50
$3.60
$3.70
$3.80
$3.90
$4.00
$4.10
$4.20
A 17% price decline
occurred just before
M&G commenced
their selling

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
DT Involvements as Sellers
May 22 through June 11


DT Involvements as Buyers
May 22 through June 11


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous

Broker DT Trades <400 Avg. <400
UBS 92.1% 78
MSDW 92.1% 135
INST 96.2% 29
CSUI 83.1% 49

Downtick (DT) Statistics

The majority of sell trades by the
prominent brokers that forced prices
lower were fewer than 400 shares in
size.

The average parcel sizes of DT trades,
ranged from just 29 shares up to 135
shares

Also, DT trades tended to flow to
brokers associated with anomalous
buying trends, suggesting a high degree
of collusion through algorithmic trades.

(Refer to Charts Below)
UBS led the way in forcing prices lower and also facilitated lower prices as an active buyer of DT trades.
However MSDW was also instrumental as a seller of DT trades despite a minor selling profile. So too was
INST. Audits would reveal who these brokers were dealing for, and if in fact they were representing the same
interests. The source of MSDWs selling is of particular interest given that M&G was a major client.
While Credit Suisses selling of DT trades doesnt feature as being anomalous on the chart, almost 60% of its
DT trades were crossings and 90% of those trades averaged just 43 shares in size. All of the data associated
with the May 22-June 11 price falls is extremely dubious and also requires investigation given what followed.
CUDECO SHARE PRICE
2013
15

8.4.1.5 INDUSTRY AFFILIATIONS NOT MADE USE OF BY THE M&G GROUP OR ITS BROKER MORGAN STANLEY

The selling of a large strategic stake in a company is usually expediently dealt with via private negotiations
between interested parties resulting in the large holding being crossed off-market. That didnt appear to
happen with M&G. The substantial holding was tipped into the market with seemingly no regard to the
impact on the market that would occur by disposing of the holding in this way. M&G unit holders, who
would have incurred substantial losses on their funds invested, would be particularly perturbed if they
were aware of how their investment in a valuable company was virtually discarded for obscure reasons.
The following observations provide some background regarding the M&G disposal:
o There are strong affiliations (both formal and informal) between brokers Citigroup Global (CITI),
Morgan Stanley (MSDW) and Morgan Smith Barney (SBAR) <Refer: Research Paper 6.5 Pg. 34>.
o All have had connections back to Azure Capital who has acted for the Company in securing
placements to raise funding for the development of the Rocklands project and in organizing large
crossings of stock such as when Dundee Corporation left the register in 2009.
o All brokers and the M&G/Vanguard Group substantial shareholder are intimately connected in the
world of finances and have access to capital from all over the world. The connections were
demonstrated in <Research Paper 6.5 Pg. 9>. The top rankings amongst the worlds 50 leading
investment banks/brokers/investment houses contain several groups who have been involved with
CuDeco over the last several years, either in regards to trading or acting in a custodial role. They are
listed below together with their rankings amongst the world most influential financial organizations.
Ranking Group
6 JP Morgan Chase & Co
8 Vanguard Group Inc.
9 UBS AG
10 Merrill Lynch & Co Inc.
12 Deutsche Bank AG
14 Credit Suisse Group
18 Goldman Sachs Group Inc.
21 Morgan Stanley
It is totally inconceivable that elite financial houses representing the worlds most influential
institutions, couldnt put a deal together for the sale of a strategic stake in CuDeco. The situation is
made even more remarkable given that the Company was recently able to access a $100 million line
of credit based on the status of the project and the robustness of its resource.
o Citigroup didnt make it to the Top 50 list but it obvioulsy is aware of the Companys prospects given
the prolific trading by its affiliate Citicorp Nominees, who has been the most active shareholder group
by a very wide margin. Its obvious interest in the Company and its connections to Morgan Stanley
meant that it would have been well aware that the M&G holding was an attractive proposition.
o Further to the Citicorp Nominees interest in the company, its prolific trading activity was from a
shareholder base of only around 1.4 million shares <Refer Complaint 2013-1 Pg. 21>. However on
August 6, it received 23 million shares from JP Morgan; presumably the balance of holding held by
M&G at the time. The transfer didnt show as a disposal in substantial share holder notices, so it is
likely that it reflects a change in custodial arrangements. The connections associated with this off-
market transfer demonstrate the connectedness between institutions and suggest that a buyer for
the M&G holding ought to have been relatively easy to locate given JP Morgans No 6 ranking.
o Smith Barney (SBAR) is also close to the deal-making entities surrounding CuDeco, as back in
October 2010, a 10 million placement secured by M&G Group was processed through its settlement
account Skeet Nominees, on its way to custodial ownership by HSBC Nominees and JP Morgan
Nominees.
16

o SBAR did show up as an informed buyer by putting retail clients into 2 million shares just prior to
when the large crossing went through that completed M&Gs selling (refer Section 8.4.2.8). SBAR
had previously sold two large tranches for institutional clients but without looking to cross the
shares with retail clients. SBAR appear to have been close to the inner circle managing the M&G
disposal.

o Morgan Stanley conducted the on-market buying for M&G in late October, November and
December 2010 which involved a number of brokers including SBAR who appeared to be trading as
a consortium to facilitate the accumulation of shares by the M&G Group <Refer: ASIC Complaint
2013-2 Pg. 67>.
o Morgan Stanley and M&G would be acutely aware of short selling issues that can target companies
perceived to be vulnerable, but chose to sell the holding in a way that encouraged others (either
affiliated or acting independently) to aggressively short sell the stock. Not choosing to deal
confidentially behind the scenes where the parcel would have been crossed amongst interested
parties is extremely odd. It is also somewhat unprofessional by all concerned in dealings by a major
broker with a major client.
Suffice to say that the background circumstances make the manner by which the holding was disposed
of, and the lack of care to achieve the best returns for unit holders of funds under M&Gs control, is
astonishing. It is also extremely dubious.
As an aside, pointed out by research, the careless management of other peoples money is a trend that
has facilitated windfall profits for hedge funds at the expense of those whose shares are under
management. The situation necessarily requires high levels of collusion between custodians and fund
managers and a preparedness to look the other way when the value of holdings is destroyed by
manipulative short selling practices. The M&G disposal again reflects badly on the industry.

8.4.1.6 FURTHER BACKGROUND ISSUES
The following points further add to suspicions that the M&G holding was deliberately dumped into
the market rather than professionally disposed of using best endeavours to try and achieve maximum
returns. The substantial losses crystalized were despite:
o CuDeco being able to raise capital at a premium to the share price in most of its financing
dealings, suggesting that willing buyers for a large block of stock would be available;
o CuDeco having extensive contacts in China and access to potential buyers;
o the M&G Fund Manager having access to CuDeco management who would no doubt have
assisted in bedding down the large block of stock as it would have been in the Companys best
interest to do so. However, no discussions were entered into;
o the M&G Group itself having access to a wide range of connections globally who would be
potentially interested in a major stake in an emerging company close to production;
o M&G and Vanguard priding themselves on their astute investment skills as per their website in
promoting the group and their status as a leading fund management group; and
o the Company approaching production as an emerging producer with excellent long term
prospects, which if marketed correctly should have commanded a premium. Explorers
approaching mine commissioning have traditionally enjoyed share price appreciation and M&G
would have known that. <Refer: ASIC Complaint 2013-3 Section 8.3.1.4>.

17

Further confounding the situation, as the circumstances make no logical sense, include:

o the purchase of a substantial line of stock by New Apex Asia through Morgan Smith Barney
(SBAR) between June 10 and June 17. New Apex Asia was already a major investor in the
company and Smith Barney are close to Morgan Stanley, yet the shares were sold into the
market. New Apex stood in the market to pick up the stock via SBAR, which saw the share price
retreat from $3.83 to $2.90 over the period. The portfolio value of shares still held by M&G
retreated by $30 million by the time New Apex completed their buying;
o refusal to entertain bids submitted by at least one other broker for a large line of stock (as
reported by sources close to the broker involved);
o the fact that real losses of around $50 million were unnecessarily incurred in disposing of the
holding, and portfolio losses based on a $4 share price amounted to $77.7 million.

8.4.1.7.1 SHORT SELLING ISSUES
The fire sale disposal of shares by M&G needs to be considered along with their stock lending activities
which have resulted in lower prices, both before the holding was sold down, and during the period when
shares were being disposed of. The lending of shares by M&G, possibly to industry affiliates of either M&G
or Morgan Stanley, has been a contentious issue amongst other shareholders.
It appears that the M&G fund has had a mandate to lend out shares, on the basis that M&G are earning
returns for their unit holders through lending fees. The actions by M&G however have been contradictory
to what stock market investing is meant to be about, which is to realize maximum profits from funds
invested. Any minor gains achieved through stock lending fees would have been massively offset by the
devaluations that have been caused to the combined M&G and Vanguard holdings through short selling.
There is also an important question concerning Vanguard i.e., Have they been involved in short selling
using lending arrangements with M&G or even with other institutional holdings?
Short selling activity has been responsible for chronic undervaluations regarding CuDeco, even before the
sell-down of the holding commenced. If Vanguard has contributed to undervaluations via short selling, it
would add a further layer of incredibility to the way the holding has been managed. It would also question
M&Gs motivations for acquiring the holding in the first place if generating a profit wasnt the primary aim.
Certainly the selling of the substantial holding in June/July/August 2013 was associated with strong levels
of short selling that pushed prices to extremely undervalued levels. Trading trends suggest that the M&G
selling was front run by entities close to M&G and likely to be in possession of inside knowledge. Trading
data shows that someone had the confidence to short heavily without having to worry too much about
how they would cover the short sales. In fact prices look to have been driven substantially lower with short
sales to all and sundry, including retailers, and with covering purchases likely to have been secured from
the selling by M&G through broker Morgan Stanley (MSDW).
8.4.1.7.2 SHORT SELLING COMPLAINT LODGED WITH ASIC
Dubious trends regarding short selling were particularly obvious on August 21 when extreme levels of short
selling preceded a large off-market crossing after the close of trade. Short sellers seemed to know that their
aggressive selling would be able to be covered through a portion of the large crossing. Despite 1.5 million
short sales placed during the day, open short position actually fell by 2 million shares on August 21. It meant
that 1.5 million short covers and an additional 2 million shares were available to reduce the position; all with
no impact on prices. The situation required a thorough investigation as the excessive short selling would
have created and supported artificially low prices and would therefore qualify as manipulation.
A complaint to ASIC in relation to August 21 trading was met with a We dont have a problem with it
response. The complaint is included as Appendix 1.
18

Importantly, losses by M&G unit holders as their stock was sold out of the fund would have been
exacerbated by any shorting activity, whether facilitated by M&G lending stock in addition to their selling,
or facilitated by other custodians. It means that the M&G unit holders incurred substantial losses, and
potentially, company insiders may have secured very substantial shorting profits for themselves by taking
advantage of the decision to sell the holding. The situation requires proper clarification, because as it
stands, it is very damaging to market integrity, especially when the regulator doesnt have a problem with
activity that, logically, can only have come about through insider activity and collusion.
There is also the issue of lax regulatory oversight where an intensive, manipulative short selling campaign
taking place at the bottom of a severe price plunge, with prices already at extreme undervaluations, receives
the nod of approval. The tolerance of such behaviours puts into question the integrity of the entire market.
8.4.1.7.3 SHORT SELLING ISSUES NEED TO BE PROPERLY CLARIFIED
ASICs subsequent approval of the high levels of short selling on August 21 raises issues about how that
decision was actually arrived at. Given the lack of transparency surrounding short selling, questions such as
the following immediately come to mind:
o What criteria need to be met before excessive short selling is regarded as manipulative?
o Were the short sales covered short sales, and if so, whose shares were being borrowed? Were there
any conflicts of interests associated with the lending of those holdings, such as for example if
Vanguard were borrowing from M&G? (If agreements werent in place what action has been taken
in regard to illegal naked short sales?).
o Given the extent of trading churn on August 21, how much of the buying and selling that took place
were effectively wash trades with no changes to beneficial ownership? How is this information
obtained without audits?
o In over 3.5 years of trading since January 2010, 1.529 million short sales associated with ASX
volumes of 2.57 million represent an enormous level of short selling. It compares to 1.456 million
short sales on August 18, 2010 and 1.355 million shorts on August 24, 2010, however those levels of
short sales were associated with trading volumes of 16.47 million and 22.53 million respectively.
Yet the unprecedented level of activity on August 21 has failed to attract attention. Why?
o Who were the buyers of the 1.5 million short sales and, why were the shares made freely available to
facilitate the covering of short positions? Doesnt such trading require high levels of collusion?
o Given the share price opened at 163 and closed at 156 on August 21, which was the price chosen
for the large crossing after the close; dont the 1.5 million short sales represent an attempt to
create an artificial price for the large after-market transaction?
o What was the relationship between those involved in 1.5 million short sales (both sellers and
buyers) and the entities who participated in the M&G crossings after the close of trading?
o What was the relationship between M&G and the entities that purchased the shares in the large off
market crossing? The question is an important one as the manipulative selling observed as M&G
disposed of their holding continued after it was finalized. If the disposal was genuine and simply
weighed down the market, it would be expected that the market would bounce back strongly once
the order was completed. That never occurred although prices have improved slightly.
o Why has the companys request to be removed from the ASX short selling list been ignored?

Given that the current system ensures that securities lending activity and large volumes of spurious daily
trading are opaque to the market, only when all of the information has been provided can a proper
assessment be made in regard to the fairness of trading. If no steps were taken to obtain answers to questions
such as the above, then any opinion regarding the fairness of trading simply cannot be regarded as credible.

19

In a similar vein regarding market oversight, the convention with market surveillance generally, appears to
be to question falls that exceed, say, 10% of a Companys share price per day. Companies are sent a please
explain by the ASX and if the Company doesnt know of any operational reason to explain the price action,
then the situation is seemingly accepted without question. Surveillance tends to ignore the fact that dubious
or indeed illegal trading activity could be responsible. Market regulation that pays lip service to regulatory
oversight, but without follow through, is not regulation. The system as it stands can only encourage a culture
of wrong-doing by interests prepared to bend the rules. The bending of rules has been a very major trend in
the financial markets over the last decade, culminating in recent times with massive fines being paid by the
likes of JP Morgan and the recent resignations of two ASX Directors for engaging in illegal short selling
activities.
Two further points:
o If the owners of shares lent out were aware of the situation and conceded, then it makes little
sense as no genuine investor wants to see their portfolio very substantially devalued. It would
suggest alternative motives such as the corporate targeting of the Company.
o Alternatively, if the rightful owners of shares werent aware that their holdings were being put at
risk, and would have stepped in and prevented the lending had they been informed, that too raises
questions and ought to attract strong regulatory scrutiny including safeguards to protect the
holders of funds under management.
Suffice to say that if M&G were both sellers in the market and lenders of stock for others to short sell, even
for say its affiliate (i.e., Vanguard) or others with access to inside information, it would make the situation
particularly dubious and extremely damaging to market integrity.
If no such short selling issues occurred, than the selling of a valuable holding in such a public manner,
thereby inviting predatory behaviours to take full advantage of the situation, simply makes no sense. It
especially makes no sense as Morgan Stanley is a savvy corporate broker and Vanguard are a leading fund
management group, yet they have overseen large and unnecessary losses in disposing of a valuable holding.
A proper investigation needs to be conducted to clear the air and to restore credibility to the market.
8.4.1.8 THE SELLING DOWN OF ANNOUNCEMENTS
During the period during which M&G sold their holding a number of positive announcements released by
CuDeco were ignored by the market. The situation is similar to what occurred during the 30 month period
from January 2010 and June 2012, and the 5 month period between January 2013 and May 2013, as have
been brought to attention in previous complaints.
<Refer ASIC Complaint 2013-1 Pg. 110 and ASIC Complaint 2013-3 Pg. 40, Sections 4 and 5>
Many announcements have met substantial levels of selling that has produced significant price falls. If not
falls in price in response to significant news, the market has generally delivered tepid responses.
Share price reactions that have resulted in marginal gains in price have been very few in number. The selling
is generally by institutions with institutions also standing in line to purchase the shares sold at reduced
prices. That is, churn between related interests is likely to represent trading that is attempting to achieve
artificial pricing levels in response to significant news.
Some of the announcements have had very significant implications for the project by clarifying the confusion
that has surrounded the resource since a JORC estimate was released on August 18, 2010.
20

Such announcements have included:
o clarification that mining grades will be much more robust than theoretical JORC estimates, at least in
the first several years of mining. The clarifications have been achieved through:
- bulk mining trials;
- through a more robust resource model after successful drilling, specifically conducted to
resolve uncertainties due to insufficient data for parts of the model; and
- large scale excavations that have revealed additional information about Rocklands
mineralization.
o advice that areas within the resource model identified as voids, and not carrying mineralization,
actually do carry high grade mineralization that is now included in the mining plan;
o advice that zones outside of the resource model assumed to be not carrying mineralization and not
part of JORC estimates, also carry significant levels of mineralization that will be included in mining
operations and not be treated as waste;
o advice that metallurgical trials demonstrate no unforseen issues with the processing of Rocklands ore;
o confirmation from the successful commissioning of the crushing circuit that high grade native copper
can be efficiently separated from the rest of the ore body.
The clarifications demonstrate that the confusion back on August 18, 2010 stemming from a tendency to
assess the resource announcement on the basis that theoretical resource estimates and mining grades were
one and the same, was completely misguided.
Yet oddly, the market has virtually ignored all clarifications.
Selling has generally occurred on the days following each announcement as well. The selling down of
announcements with wash trades and strategic sales back and forth between institutional brokers has had
the effect of creating self-doubts and frustrations amongst retail holders who often assume that the
announcements arent as good as first thought. Deliberate selling that is designed to dampen the emotions
and expectations of retail investors can be extremely destructive to investor sentiment.
News drives markets one way or the other but good news generally ought to be reflected in increasing
value in a Companys share price. This has not been happening in the case of CuDeco shares in over 3.5
years of announcements. Good news has had little or no impact on the share price and negative news has
been siezed upon to drive prices lower, further suggesting that trading has been severely compromised.
The announcements corresponding to the period M&G sold their holding are summarized in the table.
Share Price Responses
DATE ANNOUNCEMENTS (June 12 to August 21) LINK Daily Change Day After
24/06/2013 Video Update - Rocklands PDF -$0.20 -$0.21
28/06/2013 Chairman's Letter to Shareholders PDF -$0.26 -$0.02
2/07/2013 Rocklands South extends high grade copper zone PDF $0.02 -$0.15
4/07/2013 High grade ore being mined in box cut PDF -$0.09 -$0.11
9/07/2013 High grade crusher testwork PDF $0.02 -$0.12
17/07/2013 Massive sulphides in infill drilling Rocklands South PDF $0.01 $0.03
26/07/2013 Cu grades at depth - 10m @ 7.3% Cu in massive sulphides PDF -$0.01 -$0.07
29/07/2013 More massive sulphides at Rocklands PDF -$0.03 $0.02
31/07/2013 June 2013 Quarterly Report PDF -$0.05 $0.03
5/08/2013 Significant quantities of copper mineral cuprite in box cut PDF $0.00 -$0.05
8/08/2013 Southern Rocklands zones of mineralisation expanding PDF -$0.11 $0.04
9/08/2013 Crushing circuit and power house commissioning completed PDF $0.04 $0.27
12/08/2013 Rockland's Pictorial - Re-release. PDF $0.27 -$0.03
14/08/2013 Massive/Semi Massive sulphides continue below 200m down
dip
PDF $0.00 -$0.02
21

8.4.1.9 THE NON-GENUINE NATURE OF TRADING: Spurious Bids and Asks
The following screen capture shows the Bids (buys) and Asks (sells) placed into the market at 3.54 pm on
September 11, 2013, with the last sale going through at 201 cents. The various Bids and Asks have been
colour coded to highlight the artificial, non-genuine nature of buying and selling with spurious orders
appearing to be the norm rather than the exception.



Bids to prop
prices?
Asks to cap
prices?

Dubious
splitting of Bids
(Total: 1700)
Dubious
splitting of Asks
(Total: 1700)

The size of some of the
Bids, the repeat nature of
the Bids and the match up
with Asks (see opposite)
suggest non-genuine
bidding and a somewhat
contrived, artificial market.
The repeat nature of Bids
has been summarized using
colour coding.
The results are as follows:
5 @ 5,000
1 @ 7,500
2 @ 1,533
3 @ 10,000
7 @ 1700

The splitting of bids is also
highlighted by orders being
grouped within rectangles.
The Non-Genuine Nature
of Buying Orders
The selling orders (Asks)
tend to replicate using the
same patterns as the
buying orders (Bids). It
again reinforces the non-
genuine nature of order
placement and a somewhat
contrived, artificial market.
The repeat nature of Asks
has also been summarized
using colour coding.
The results are as follows:
4 @ 5,000
2 @ 7,500
3 @ 1,533
3 @ 10,000
11 @ 1700

Again, the splitting of bids
is highlighted by the use of
rectangles.
The Non-Genuine Nature
of Selling Orders
The Bid and Ask structure of the market is clearly weighted both above and below the market to force trading
to take place within a narrow band. The pricing level is seen to be somewhat artificial and can be moved up
or down at the discretion of brokers, simply by applying different attributes to algorithms.
Impatient retail orders that require an immediate fill are at the mercy of algorithms that can see and react to
an incoming order in an instant, and take measures not to execute if necessary. For example an Ask where
shares are not intended to be sold but are placed to weigh down the market, can react to a retail buy order
by undergoing a crossing or moving out of the way in an instant. Also, shares that are not really for sale that
do get purchased, are simply retrieved back from the market as demonstrated by the Company Buy Back. It
effectively stripped shares from retail investors, not institutions. Non-genuine institutional sell orders that did
get snapped up by the Buy Back were simply replaced by subsequent purchases from retail investors.
22

8.4.1.10 CONTROL OVER AUCTIONS
Control over auctions has been a prominent feature of trading where a group of brokers, led by UBS, have
been motivated sellers and buyers at auctions, at levels that are much higher than their involvement in
active trading. Other brokers have shown reduced participation.
Brokers with substantially different trading profiles during auctions may be summarized as:
INCREASED SELLING ACTIVITY: UBS by a wide margin then COMM, CITI, and SBAR
DECREASED SELLING ACTIVITY: MSDW by a wide margin, then MERL
INCREASED BUYING ACTIVITY: MACQ and UBS by substantial amounts then CSUI
DECREASED BUYING ACTIVITY: MSDW, by a wide margin then COMM and CITI marginally
The data is available in Section 8.4.2.11.1
Order flows at auctions are heavily dominated by institutional trades where it is possible that shares are
simply washed back and forth between co-operative brokers in an attempt to manage pricing levels. The
extent of wash trades or trades that have the same effect (i.e., no change to beneficial ownership) can only
be ascertained through the forensic auditing of broker and client accounts. Audits are required to discover
whether or not buying and selling by the same interests (or interests affiliated with their trading) has been
spread across a majority of brokers during auctions.
The extent of involvement by institutional brokers, even when auctions are lightly bid is extremely curious.
Brokers that account for millions of shares in active trading seem intent on participating in auctions by
lodging spurious bids for very small parcels of shares. Why they even bother is where the curiosity arises?
The overriding impression that comes from auction data, is that a lot of the buying and selling is strategic
and aimed at controlling outcomes rather than genuinely attempting to buy and sell for clients at the best
price. It must be borne in mind that unfair control over prices amounts to share price manipulation.

Also evident during auctions are behaviours such as:
o placement of bids that simply repeat during the auctions as if to maintain a certain degree of influence
as orders by others are progressively added;
o capping and propping of auctions with large Asks and Bids that force an outcome to occur in a
particular price band;
o adding of spurious Asks above the auction and spurious Bids below the auction which have no chance
of being executed, but they do help to influence the final outcome. The activity is sometimes referred
to as layering;
o splitting of orders into a number of separate orders;
o lodging of separate bids progressively throughout the auction again with the appearance of
maintaining a particular market profile rather than to genuinely transact orders for clients;
o the sudden withdrawal and/or adding of orders right on the close designed to have a pivotal effect on
final outcomes;
o participating as both a buyer and a seller for significant volumes of shares but where the shares are put
through the market rather than crossed; and
o occasional use of retail brokers to camouflage large orders that are instrumental in deciding an auction
outcome on behalf of institutions (i.e., the large orders usually do not show up in retail accounts on the
register at T plus 3).

23

The auction close on July 22 helps to demonstrate some of the concerns. (Refer to the following screen
snapshot)
The auction match-up at the close has been clarified by adding the brokers behind the various Bids (buys)
and Asks (sells). The brokers are taken from Iress broker data following T+3 when broker names become
available.
Closing Auction Analysis July 22, 2013


Further auction analysis is provided in Section 8.4.2.11.3
8.4.1.11 THE LACK OF REGULATORY SUPERVISION OF THE MARKET BY THE ASX AND ASIC
CuDeco was queried by the ASX on June 18, about the price fall from $3.13 on June 17 to an intra-day low
of $2.81 (a drop of 10.1%). In querying the price fall, the ASX overlooked the 23.1% fall that had occurred
between May 22 and June 17.
The Company confirmed that all material information concerning its operations had been released to the
market with no information pending. It also confirmed that it was in compliance with all listing rules.
The M&G selling was first announced on June 21. From that point price falls from $2.81 down to $1.37 (i.e.,
51.2%) were ignored by the ASX and ASIC, giving the impression that all trading behaviours are acceptable
Highlights easily
identified repeat Asks
which appear to be
added to weigh down
the market in favour of
the close. The close on
Jul 22 was mostly
controlled by the two
MSDW sells that
effectively resulted in a
price cap.

Price Capping Asks
placed by MSDW

The two Asks also
total 3944 shares

Spurious or non-
genuine prop bids
each for 8827 shares?
Asks placed to
help cap prices?
Buying brokers
revealed by Iress data
3 days later (i.e., T+3)
Selling brokers
revealed by Iress data
3 days later (i.e., T+3)
24

when a major holding is sold into the market. It also sells the message that share price manipulation is
acceptable provided it is done gradually.
Both ASIC and the ASX have either ignored the sorts of issues raised in the current complaint or was not
even aware of them. The situation is hugely detrimental to market integrity as the issues are extremely
relevant and strongly suggest market manipulation. The regulator in the past has defended the use of small
algorithmic trades on the basis that the small trades break down large orders in a way that they can be put
through the market without impact. The selling undertaken by M&G created maximum impact both with
small algorithmic trades and large parcels dumped into the market. Much of the selling that occurred was
non-genuine, and artificial prices were the end result.
The situation makes no sense other than through the corporate targeting of the Company, perhaps
preparing the way for others to achieve cheap shares through placement or through takeover. However
those sorts of reasons strongly equate with share price manipulation which is why it is important to
establish, through audits:
- the identities of those involved with short selling in the market;
- the identities of those who were lenders of stock;
- the identities responsible for the large volumes of selling that was in addition to that by MSDW on
behalf of M&G;
- the identities of buyers much of which supported the additional selling but had no impact on the
register as it represented trading churn. (In general, up until Aug 21, it was retail investors who
ended up with M&G shares).
The loss of half a billion dollars from the market capitalization of a Company with no material change to the
market outlook or to the Companys prospects is not an incidental matter. It has had widespread
ramifications for the Company and its shareholders and demands a proper investigation of trading issues to
be undertaken, especially given that unexplained anomalies permeate all trading data.

8.4.1.12 SETTLEMENT ANOMALIES
UBS Securities was again the most prominent broker in terms of settlement transactions. It was associated
with 22.1% of all settlement share flows which is extremely contradictory for a broker with a market share
of only 4.5% regarding all buying and selling.
Contradictions concerning UBS Securities dealings in relation to CuDeco
have been a regular feature of trading data over several years as
shown in the table.
Period
% of ASX
Trading
% of Broker
Settlements
% of Shareholder
Movements

Broker Nominee
Entity
% of all Nominee
Share Flows
Period Nov/Dec 2010 6.9% 21.6% 0.0% UBS Nominees 65.9%
Period Jan 2010/June 2012 5.4% 37.2% 2.7% UBS Nominees 17.7%
Period Jan/May 2013 10.5% 37.7% 0% UBS Nominees 0.5%
Period Jun 12 /Aug 21 4.5% 22.1% 0% UBS Nominees 7%


Prominence with settlements is the major feature of the UBS profile across all trading, and suggests that UBS is
either the conduit for settling large amounts of trading conducted by other brokers, or for facilitating large
volumes of securities lending share flows. Either way it questions the impact UBS has had on the market in
terms of possibly aiding the trading agendas of others, particularly with their high levels of auction involvement
and their occasional targeting of lower prices through the forcing of Downticks as suggested by trading data.

It also facilitates non-transparency of trading activity through the market
Trades are settled
elsewhere
Coinciding with M&G Selling
25

8.4.1.13 CHAIRMANS LETTER TO SHAREHOLDERS JUNE 28, 2013
In response at the lack of regulatory oversight in the market the Chairman sought to advise shareholders of
the situation in a Company Release on June 28. An excerpt follows.
I would like to advise shareholders of CuDeco that there has been no material change or any other change
to the company. The relentless selling and short selling of shares by a group of hedge funds and our largest
shareholders is allowable without interference from the regulators. The company has an independent
analytical report indicating blatant manipulation by four funds and this has been handed to ASIC for
investigation. The company has made a formal application to ASIC to have CuDeco exempted from the
short selling. I, as Chairman, can only apologise for the conduct of these companys and the fact that they
are allowed to operate this way. The company has not received a formal reply from ASIC.

The request for exemption from short selling was still awaiting a response late October, approaching 4
months later, and yet the share price fell a further 31.5% between June 28 and August 8.
The situation is most unsatisfactory particularly as share price manipulation and cartel activity is illegal yet
the market watchdog appears unable or unwilling to address matters brought to attention from a variety
of sources.
ASIC Chairman Mr Greg Medcraft recently confirmed that the interests of retail shareholders are
paramount in a recent interview on the ABCs Lateline program.
Quote: ASIC gives priority where there is a significant impact on the market or where there is a significant
impact on retail investors - i.e. lots of people losing a lot of money. <REFERENCE LINK>
Certainly, the loss of a half billion dollars is a significant amount of money and 8,000 CuDeco shareholders
represents a significant number of people. Yet nothing appears to have been done by the regulator.
ASIC prides itself on consultation with industry and stakeholders yet it is prepared to ignore:
o respected commentators such as Alan Koehler <Refer: High Frequency Trading is Cuckoo> and Robert
Gottliebsen <Refer: Cut the Pipes on Trading Robots> who also act as important gatekeepers to the
system by identifying and addressing issues of critical concern;
o industry bodies such as The Industry Super Network <Super funds call for high frequency trade ban>;
o a number of individual shareholder complaints concerning CuDeco;
o broker complaints specifically in regard to CuDeco who are also required to act as system
gatekeepers; and
o the Company itself.
It is evident that all concerns and criticism of the systems involved are being ignored as the problems
remain and are still impacting trading on a daily basis regarding CuDeco, and by extension, in relation to a
large number of other ASX companies. Essentially, it is the ineffective regulation of algorithms, dark pools,
and manipulative short selling that is compromising the entire system of trading.
The situation effectively means that if share price manipulation is taking place, as suggested by the trading
data and the background context to the trading that has occurred as M&G sold, then it is effectively being
supported by the top echelons of governance within the organisations that run and regulate the financial
markets.

It may represent another example of the few extracting benefits over the many through activity able to
occur within some sort of legal framework, but if properly examined and tested by the High Court, it
stands a very good chance of being ruled illegal. The artificial nature of price setting that has led to severe
undervaluations is the end result of non-genuine trading behaviours. Only with a proper examination of
the accounts of brokers and their clients, and a forensic auditing of all stock lending and all securities
lending transactions concerning CuDeco, can a clear picture emerge.

26

A good place to start would be the entities associated with the current open short position which stood at
9.11 million shares as at October 14, 2010. It has increased by 137% since early August (i.e., Aug 5) where
very substantial price reductions had already occurred with prices retreating from $4.07 on May 22 to a
low of $1.37 in early August.
It makes absolutely no sense for a company to be heavily shorted from the bottom of a downtrend,
especially with the company well advanced in preparation for mining and with all financing options
available to complete the project. As announced to the market on October 19, a $100 million line of credit
has completely de-risked the project as far as funding is concerned.
The only explanation that makes sense is that the Company is being corporately targeted for whatever
reason, and that share price manipulation is responsible for the trading anomalies which are a constant
feature of daily trading in CuDeco securities.


8.4.1.14 SYSTEM ISSUES
Central to suspicious trading behaviours by brokers acting on behalf of M&G is the flexibility offered by the
current system of trading which is very seriously impacted by:
An inability to effectively regulate algorithmic trades; and
A severe lack of transparency concerning the majority of trading taking place.
The reality in regard to electronic markets is that the trading agendas of a single interest can be imposed
over the entire market simply by dispensing multiple buy and sell instructions to a range of brokers who
have them executed in the market through their proprietary computerized trading algorithms. Trading
agendas (fair or otherwise) are therefore implemented in such a way that the impact on the market as
trades are executed is not obvious and not easy to trace.
It makes the task of regulatory oversight virtually impossible without a preparedness to audit accounts.
Certainly, entities using the flexibility and camouflage afforded by the system can trade in a manipulative
fashion without fear of detection, particularly if trading protocols such as price and volume movements are
kept under the radar of ASX surveillance. And as already mentioned, the usual approach by the ASX in
response to suspicious price movements is to query the company concerned and to ignore trading
behaviours by large institutions whose dealings are interconnected.
An Absence of Transparency and Accountability:
The overwhelming deficiency in the way markets currently operate is the inability to quantify the buying
and selling of particular corporate entities and to accurately assess the impact their trading has had on the
market. It is because their trading is done systematically through a range of brokers and is camouflaged by
both the system of trading and the system of settlements. Much of the trading taking place does not
conform to the regular and random market interactions expected of a genuine, fair market.
The use of multiple nominee accounts for substantial holdings that are then distributed across a number of
institutions acting as custodians, makes the trading associated with multiple accounts very difficult to
reconcile. It provides great flexibility for fund managers to distribute trades (i.e. apportioning losses to
some holders, and winning trades to others) and it makes regulators task of connecting buying and selling
to individual holdings difficult in the extreme, but not impossible.

27

The net result is that corporate entities can effectively trade without being made accountable for their
actions if only because the regulator is underfunded and unwillinging to enage in audits because it could
impact the bottom line of the organization as revealed by the following:
Refer <Underfunded ASIC admits it is overstretched> and <Why we should privatise ASIC>

Multiple brokers being used by entities to impose their lightning fast, automated, synchronized, not easily
traceable trading agendas over the market, has been widely demonstrated in research into the trading
data of a number of ASX companies. There is the strong likelihood that fund managers and brokers also
collude with their trading while attempting to implement shared corporate agendas.
The trading relationships between brokers translate back to at least October 2010, when M&G
accumulated a substantial holding in CuDeco. Broker relationships back then, and during the period
January to May 2013, that preceded the M&G selling, need to be reviewed in conjunction with the disposal
of the holding from June through August 2013.
The extent of anomalies in daily trading data certainly demonstrates that the selling was far from genuine
and that the market was far from orderly and it has been that way for a very long time.

28


Section 8.4.2

THE IMPACT OF M&G SELLING
(Based on Trading and Registry Data)
29

8.4.2.1 THE CuDECO SHARE PRICE VERSUS OPEN SHORT POSITIONS January through August 2013
The chart summarizes changes in the CuDeco share price and changes to open short positions over the
eight month period from January to August 2013. The period saw an overall reduction in the share price of
69.6% at a time company fundamentals were extremely positive and the market outlook was relatively
stable. As M&G sold their substantial holding on-market between June 12 and August 21, price reductions
of 52% occurred. Open shorts showed a steady build up across the entire period with large reductions, and
the subsequent reinstatement of positions, having no impact on the share price.



























January February March April May June July August
January February March April May June July August
M&G Selling
Commences
M&G Selling
Completed
52%
Price Fall
66% Increase in Open Shorts
Prior to M&G Selling
Dubious levels of short
selling again raise market
integrity concerns
Open Shorts
Share Price
2013
2013
$1.37
69.6% fall
decine
The almost 70% decline has corresponded
with the company gathering strength
operationally in a market where the
outlook for copper has remained positive.
The build in open short positions prior to
the M&G selling suggests insider activity
Further 37% Increase
accompanying the
M&G sell down
Large
adjustments
to open
short
positions
without
price impact
M&G sales
start
30

8.4.2.2 SUMMARY OF M&G SELLING June 12 through August 21, 2013
The selling of the M&G Group substantial shareholding by broker Morgan Stanley (MSDW) is summarized
in the table. Sales amounted to 33.567 million shares at an average selling price of $1.76.
Day M&G Sales Amount ASX Volumes MSDW Sales MSDW %
Jun 12 219,186 $719,529 532,349 210,356 39.5%
Jun 13 170,000 $533,415 549,328 236,248 43.0%
Jun 14 120,000 $378,003 332,178 141,215 42.5%
Jun 17 143,648 $450,165 459,047 234,260 51.0%
Jun 18 256,352 $753,576 1,272,786 273,324 21.5%
Jun 19 170,000 $491,537 586,348 170,144 29.0%
Jun 20 500,000 $1,387,136 1,650,125 541,104 32.8%
Jun 21 657,316 $1,757,683 1,041,400 656,798 63.1%
Jun 24 405,684 $1,020,188 1,023,300 423,261 41.4%
Jun 25 240,000 $547,917 903,100 248,131 27.5%
Jun 26 160,000 $373,387 547,300 163,162 29.8%
Jun 27 220,000 $504,001 661,300 221,976 33.6%
Jun 28 582,746 $1,184,699 2,380,100 539,724 22.7%
Jul 1 387,254 $785,710 1,313,500 449,267 34.2%
Jul 2 500,000 $1,011,450 1,446,141 513,194 35.5%
Jul 3 200,000 $379,886 1,237,856 281,959 22.8%
Jul 4 360,000 $680,669 1,379,944 374,120 27.1%
Jul 5 430,000 $805,779 1,386,629 419,404 30.2%
Jul 8 451,325 $815,608 1,207,318 483,735 40.1%
Jul 9 645,275 $1,187,309 1,577,061 652,385 41.4%
Jul 10 366,000 $646,634 1,308,447 389,585 29.8%
Jul 11 392,548 $707,580 1052577 396,503 37.7%
Jul 12 297,452 $545,002 916240 303,194 33.1%
Jul 15 165,000 $295,806 599902 191,967 32.0%
Jul 16 281,266 $500,132 563226 289,988 51.5%
Jul 17 223,734 $402,250 625747 232,414 37.1%
Jul 18 280,000 $506,838 662798 287,862 43.4%
Jul 19 600,000 $1,053,725 1257549 623,004 49.5%
Jul 22 1,045,717 $1,870,732 1401576 1,140,977 81.4%
Jul 23 484,283 $915,418 1564052 515,077 32.9%
Jul 24 277,979 $520,045 977215 289,718 29.6%
Jul 25 322,021 $566,102 1114901 355,628 31.9%
Jul 26 310,000 $539,557 962952 325,914 33.8%
Jul 29 324,662 $547,123 1095189 340,080 31.1%
Jul 30 235,338 $384,569 856407 240,844 28.1%
Jul 31 314,963 $504,938 962904 355,661 36.9%
Aug 1 185,037 $299,231 645414 192,981 29.9%
Aug 2 450,000 $731,838 806125 465,613 57.8%
Aug 5 350,000 $566,080 800068 358,125 44.8%
Aug 6 200,000 $317,539 649314 221,273 34.1%
Aug 7 240,000 $360,439 1195244 330,554 27.7%
Aug 8 510,000 $724,998 2394546 614,573 25.7%
Aug 9 549,120 $776,326 1788628 599,569 33.5%
Aug 12 1,620,880 $2,595,616 3919116 1,690,941 43.1%
Aug 13 905,000 $1,486,574 2556847 983,382 38.5%
Aug 14 745,000 $1,235,010 2303642 788,909 34.2%
Aug 15 311,343 $510,184 1624503 756,042 46.5%
Aug 16 522,609 $852,990 1844313 981,175 53.2%
Aug 19 239,336 $403,407 1428396 481,196 33.7%
Aug 20 898,000 $1,449,761 1741165 928,855 53.3%
Aug 21 13,101,508 $20,408,851 15387060 13,133,134 85.4%
Totals 33,567,582 $58,992,942 76,493,173 36,038,505 47.1%

.

It seems peculiar that genuine selling by M&G amounting to 33.567 million shares was accompanied by
additional selling of 42.93 million shares (i.e., selling volumes totalled 76.493 million all up). The additional
volumes represent trading churn by others, where ownership over shares didnt change substantially.
M&G shares generally ended up with retail investors except for the large crossing on August 21, 2013.
Average
Selling Price
$1.76
31

8.4.2.3 SELLING SUMMARY
M&G disclosures, together with the Company register, reveal the following break-down of selling over the
period M&G sold out their holding.
June 12 to August 21, 2013
Total Sales 76,493,173

M&G Selling 33,567,582
Retail Sales 3,883,141
Other Sales 171,140
Total 37,621,863

Surplus Sales 38,871,310

Genuine, transparent dealings are easily located on the register, and by M&G disclosures. and account for
37.62 million of sales. However they represents only 49.2% of the selling put through the market. The
surplus sales are less certain as they involve short selling and sales associated with institutional trading
churn, none of which is transaparent. It is quantified as follows.
Short Sales 13,962,885
Institutional Selling
24,908,425
Total
38,871,310

The short selling is taken from the ASX website which publishes daily short sales (refer table 8.4.2.5.1 that
follows) so that the balance of selling (24.91 million shares) represents institutional selling. It needs to be
borne in mind that without audits, there is no way of knowing how much of the 24.91 million shares
attributed to institutional sales, represents illegal wash trades or even illegal naked short sales.
Also, as most of the short selling is also undertaken by institutions (Refer ASIC Complaint 2013-1 Pg. 106) it
effectively makes them responsible for the bulk of the 38.8 million additional sales that accompanied the
M&G selling. As previously pointed out, the majority of trades represent opaque dealings undertaken by
fund managers on behalf of entities embedded in nominee entities which in turn are embedded into
institutional holdings. Yet such spurious trading arrangements that make it very difficult to quickly identify
those responsible for major levels of buying and selling are accepted by the Regulator without question.
Using the Open Short position data provided by ASIC which shows a short position increase of 1.55 million
shares over the period M&G sold their holding, it would appear that institutions provided 38.87 million of
sales and 37.32 million covering purchases. It represents a very large amount of buying and selling
implemented by trading algorithms for anonymous interests, but where the shares have effectively flowed
back and forth, with no substantial changes in group ownership for most of the transactions.
Put another way, M&G selling of 33.57 million shares on the market has resulted in an additional 38.87 of
million sales, associated to a large extent with dubious, non-genuine trading activity.
Although short selling is legal, what isnt legal is for the market to be manipulated through non-genuine
trading that enables the fixing and maintenance of artificial prices. There are extremely strong indications
suggesting that the creation of artificial pricing levels is exactly what has taken place. To use an analogy,
driving a car is also legal, but driving in a way that recklessly causes harm to others is not. Suffice to say
Other Sales include
small sales by
corporate entities
Entities with holdings in their own
name or in small private
companies, many representing
private super holdings, have been
regarded as retail
Surplus sales comprise
short sales and sales
associated with churn by
sophisticated investors
Transparent
Transparent
Non-Transparent
From published data
provided by the ASX website
Institutional Selling represents
the difference between
surplus sales and short sales
Surplus sales
previously identified
From M&G
Disclosures
32

that the additional selling associated with M&G quitting the CuDeco register has generated enormous loss
of wealth for all other investors and it has the characteristics of trading activity that have been defined as
illegal. What is required is a proper investigation.
8.4.2.4 PROFITABILITY CONSIDERATIONS
The selling price realised by the disposal of shares was $1.76. It compares to an average buying price for
the entire holding of $3.20 and represents a loss of approximately $50 million associated with the
investment over a period of 34 months. The loss comes despite value emerging from a multi-billion dollar
resource at Rocklands that is approaching mine commissioning with forward planning in place for an
anticipated 30 year plus mining operation. It makes no sense to pay premium prices for much of the
holding only to dispose of it in a fire sale manner, and with obscure reasons as to what the motives of the
M&G Group actually were in quitting the register.
Amongst the suggested reasons for the abrupt disposal by M&G that have circulated around the market
have included:
a need to raise cash quickly because of unit holder redemptions associated with the M&G fund ;
M&G becoming frustrated with delays to commence production;
the appointment of a new fund manager resulting in a change of investment focus with dividend
paying stocks being the preferred investment vehicle of the fund <Reference Link>
All explanations dont satisfactorily explain what occurred. Firstly, M&G bought around $27 million worth
of shares in OZ Minerals between May and August for an average price of $4.16, after liquidating $59
million worth of CuDeco shares over the same period for an average price of $1.76. The OZ Minerals
acquisitions were announced on July 17, Aug 5 and Aug 26, 2013. It suggests that unit holder redemptions
werent driving the activity as they were spending money elsewhere.
Secondly and thirdly, CuDeco is rapidly approaching a cash flow situation with the likelihood of mining
direct shipping ore ahead of full scale mining and processing, and with the likelihood of very strong returns
over the initial years of mining. The exceptionally high grades of ore that will be processed in the first years
of mining should translate into extremely robust returns. To opt out of their holding for very significant
losses on the cusp of CuDeco becoming a mining company, and with the outlook for its products very
promising, doesnt make logical sense, especially given that OZ Minerals appears to have continuing
operational difficulties with one of its major operations (i.e., Prominent Hill) .
It makes absolutely no sense given that on October 21, the CuDeco share price closed at $2.34 which is
33% above the average price received for selling the holding, and OZ Minerals closed at $3.71 representing
a loss of 11% on the average price of recent purchases.
The approach to the disposal of the CuDeco holding by M&G certainly doesnt appear to be connected to a
profit motive which raises concerns on many levels.

33

8.4.2.5.1 SELLING DATA
The substantial escalation in ASX selling volumes accompanying the M&G disposal of shares is reflected in
the table which compares M&G selling volumes to ASX volumes and also shows Vanguard sales. The ratio is
simply (ASX Volumes) (M&G Volumes). Also noted are short sales and the changes to outstanding open
short positions. Open short positions at best provide a guide to short sales and the covering of shorts but
also reflect substantial off-market adjustments which avoid price discovery.
Day
M&G Total
Sales
Vanguard
Sales
ASX Selling
Volumes
Ratio Declared
Short Sales
Shorts cf. ASX
Volumes %
Change to
Open Shorts
Jun 12 219,186 108,530 532,349 2.4 37,306 7.0% 662,725
Jun 13 170,000 84,175 549,328 3.2 172,721 31.4% -557,696
Jun 14 120,000 59,418 332,178 2.8 68,626 20.7% -15,714
Jun 17 143,648 71,127 459,047 3.2 73,588 16.0% 60,364
Jun 18 256,352 126,932 1,272,786 5.0 304,144 23.9% 86,469
Jun 19 170,000 84,176 586,348 3.4 61,580 10.5% 21,400
Jun 20 500,000 247,575 1,650,125 3.3 631,050 38.2% 387,056
Jun 21 657,316 324,432 1,041,400 1.6 160,223 15.4% -125,678
Jun 24 405,684 200,233 1,023,300 2.5 149,567 14.6% -202,024
Jun 25 240,000 118,457 903,100 3.8 275,927 30.6% 309,538
Jun 26 160,000 78,972 547,300 3.4 128,071 23.4% -49,534
Jun 27 220,000 108,586 661,300 3.0 118,122 17.9% 37,539
Jun 28 582,746 287,626 2,380,100 4.1 480,339 20.2% 189,167
Jul 1 387,254 210,214 1,313,500 3.4 454,863 34.6% 8,279
Jul 2 500,000 271,417 1,446,141 2.9 466,232 32.2% 788,349
Jul 3 200,000 108,567 1,237,856 6.2 460,556 37.2% 809,015
Jul 4 360,000 195,420 1,379,944 3.8 403,840 29.3% 492,975
Jul 5 430,000 233,418 1,386,629 3.2 444,685 32.1% 22,655
Jul 8 451,325 244,993 1,207,318 2.7 266,019 22.0% -255,895
Jul 9 645,275 350,277 1,577,061 2.4 466,107 29.6% -1,205,225
Jul 10 366,000 198,677 1,308,447 3.6 290,886 22.2% 291,277
Jul 11 392,548 213,087 1,052,577 2.7 110,535 10.5% 12,841
Jul 12 297,452 161,466 916,240 3.1 70,137 7.7% 948,771
Jul 15 165,000 89,569 599,902 3.6 116,752 19.5% -58,640
Jul 16 281,266 152,681 563,226 2.0 26,944 4.8% -79,932
Jul 17 223,734 121,449 625,747 2.8 17,192 2.7% 57,647
Jul 18 280,000 151,992 662,798 2.4 29,261 4.4% -60,936
Jul 19 600,000 325,701 1,257,549 2.1 90,338 7.2% 33,884
Jul 22 1,045,717 567,649 1,401,576 1.3 116,538 8.3% -3,520
Jul 23 484,283 262,884 1,564,052 3.2 326,251 20.9% -79,245
Jul 24 277,979 150,898 977,215 3.5 118,915 12.2% 210,904
Jul 25 322,021 174,803 1,114,901 3.5 215,514 19.3% -190,263
Jul 26 310,000 168,278 962,952 3.1 217,447 22.6% 286,252
Jul 29 324,662 176,239 1,095,189 3.4 197,348 18.0% 44,730
Jul 30 235,338 127,748 856,407 3.6 198,016 23.1% -1,280,626
Jul 31 314,963 170,973 962,904 3.1 235,078 24.4% 395,397
Aug 1 185,037 100,444 645,414 3.5 159,832 24.8% -317,869
Aug 2 450,000 244,278 806,125 1.8 117,102 14.5% -71,125
Aug 5 350,000 189,991 800,068 2.3 210,020 26.3% -1,964,748
Aug 6 200,000 108,568 649,314 3.2 180,387 27.8% 2,226,801
Aug 7 240,000 130,282 1,195,244 5.0 366,408 30.7% -88,523
Aug 8 510,000 276,845 2,394,546 4.7 791,171 33.0% 675,599
Aug 9 549,120 298,078 1,788,628 3.3 435,599 24.4% 298,109
Aug 12 1,620,880 879,863 3,919,116 2.4 324,649 8.3% 351,154
Aug 13 905,000 491,266 2,556,847 2.8 421,741 16.5% -580,515
Aug 14 745,000 404,410 2,303,642 3.1 278,817 12.1% 113,605
Aug 15 311,343 303,987 1,624,503 5.2 393,402 24.2% 373,029
Aug 16 522,609 510,262 1,844,313 3.5 251,956 13.7% 607,524
Aug 19 239,336 233,683 1,428,396 6.0 162,618 11.4% 38,836
Aug 20 898,000 487,467 1,741,165 1.9 338,956 19.5% -98,289
Aug 21 305,388

2,590,940 8.5 1,529,509 59.0% -2,005,939
Totals 33,567,582 17,960,000 76,493,173 13,962,885

1,549,955
Ratio values are
defined by:
[ASX Sales]
[M&G Sales]
Ignoring Aug 21
when a large
crossing was put
through the market,
ratio values range
from 1.3 times M&G
selling volumes to
double, to triple and
up to 6 times M&G
selling volumes.
The amounts of non-
genuine selling
accompaning M&G
sales is quite
extraordinary and
requires a thorough
investigation.
34

The August 21 data only includes the volumes associated with live trading, not the large crossing of 12.8
million shares put through the market after the close of trade representing the last of M&Gs selling.
The escalation in selling volumes accompanying M&G selling is brought to attention in the chart below
which shows the variations in the ratio that compares ASX Volumes to M&G Selling Volumes.



As mentioned, the register throughout the period M&G sold their holding clearly shows M&G as the
primary seller in the market, with the bulk of additional selling representing shorting activity and churning
activity. Both activities necessarily involve collusion between willing participants with short sellers knowing
that shares will be easily retrieved back from the market via co-operative sellers. The process is able to
continue ad infinitum as indicated by the trading volumes being multiples of that of the one primary seller.
The trading is decidedly artificial and manipulative and has resulted in grossly undervalued prices.
The following chart provides a direct comparison of ASX Selling Volumes and M&G Sales to further
highlight the extent of non-genuine selling activity accompanying the sell down of the M&G holding. The
term non-genuine draws attention to the minimal changes to beneficial ownership associated with it.

0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
ASX Selling Volumes compared to M&G Selling Volumes
Jun Jul Aug Aug
12 1 1 21 2013
ASX Selling volumes were
often 3 to 4 times M&G sales
and occasionally much higher

ASX Volumes 8.5 times higher than
M&G, the only genuine seller.


0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
M
i
l
l
i
o
n
s

M&G Selling Volumes versus ASX Selling Volumes
Jun 12 Jul 1 Aug 1 Aug 21

2013

M&G Sales

Total ASX Sales



Research has revealed that algorithms enable volumes to be ramped up to very
high levels with non-genuine buying and selling between interests colluding with
their trading. The result is an artificial market with minimal changes to beneficial
ownership despite the large volumes put through the market.
35

8.4.2.5.2 SHORTING ACTIVITY versus MSDW SELLING
The extensive short selling that accompanied M&G selling is summarized by the following charts. Short sales
are seen to correlate strongly with the total volumes of shares sold by M&G and average 41.6% overall.


The correlation is even more marked when compared to the selling by M&Gs Affiliate, the Vanguard Fund.


0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
Short Sales versus Total M&G Selling Volumes
Short Sales versus Vanguard Selling Volumes

M&G Sales

Short Sales




Vanguard Sales

Total ASX Sales



As mentioned in Section 8.4.1.6.3, there is an anomaly concerning the level of short selling on Aug 21. Short
sales totalled 1.53 million shares (i.e., 59% of all ASX selling) which represented 5 times the number of shares
sold by the M&G Group in active trading that day. The heavy short selling looks to be the result of insider
trading, based on the knowledge that a large crossing would take place which they could participate in. The
situation strongly identifies with share market manipulation and resulted in an extremely artificial market.
Also, open short positions actually fell by 2 million shares on August 21 further suggesting that the crossing
did facilitate short covering and that insider knowledge was responsible for the anomalous trading activity.
78% of the number of Vanguard sales were
matched by the Short Sales of other institutions.

Short Selling was additional to selling by M&G. It represents a lot of
additional selling. Short sales equate to 42% of all the selling by the M&G
Group.

Highly dubious shorting
activity on Aug 21
Jun 12 Jul 1 Aug 1 Aug 21

Jun 12 Jul 1 Aug 1 Aug 21

2013
2013
36

8.4.2.6 INSIDER ACTIVITY
A key issue regarding trading is the increased trading volumes that have accompanied M&G selling. A
similar phenomenon also occurred when M&G accumulated their major stake late 2010. Their on-market
buying back then resulted in trading volumes leaping multiples of those of the days when they didnt have
a buying presence. (Refer ASIC Complaint 2013-2 Sections 8.2.8.3 and 8.4)
Quite clearly, a genuine buyer standing anonymously in the market to accumulate shares, or a genuine
seller looking to dispose of shares, is no reason for volumes to suddenly escalate. Yet that is what has
occurred when M&G acquired, then disposed of, a major holding. Disclosure requirements meant that the
buying and selling needed to be divulged to the market and it is those disclosures that enable a clearer
assessment of what has taken place with trading. The disclosures in effect draw back the curtain on high
levels of insider activity that has resulted in a substantially compromised market. Insider activity and
collusion by entities either close to the M&G Group itself, or its broker, or both, is the only plausible
explanation for the frenzied trading that resulted in widespread trading anomalies.
A reoccurring outcome with the research into ASX companies has been the prevalence of trading issues
when company disclosures are looked into - issues not picked up by Regulatory authorities. Certainly there
have been no press announcements by ASIC concerning abnormalities with Billabong trading or the leaking
of information to the press, or about trading anomalies concerning Lynas Corporation or LINC Energy when
trading anomalies abound. All have been brought to attention by published research and have been
alerted to regulatory authorities, but no proactive response or investigation was undertaken by them.
<Refer: Chapter 7 Research Papers>.
CuDeco is no different, in that disclosures by M&G raise many issues that require clarification. The
situation casts great doubt about the integrity of all trading given that the majority of trading in companies
across the ASX takes place with zero disclosure. Mandatory reporting levels for substantial holders are
generally avoided by keeping accumulation in check as shares are washed back and forth.
The extensive levels of short selling accompanying M&G sales are a case in point regarding insider
knowledge. Certainly, the confidence to implement extreme levels of short sales had to come from
somewhere. The situation raises the possibility of, say, the Vanguard Fund heavily shorting with advance
knowledge of the Groups intentions and thereby front running the sell-down of the holding for its
exclusive benefit. If not Vanguard, then perhaps affiliates of M&G or acquaintances of M&G or its broker
could have acted similarly. The direct losers in the selling exercise are the M&G unit holders whose shares
have been sacrificed for a fraction of their true worth, both from the selling that took place, and the
possible lending of shares to support the short selling activity.
Also suffering collateral losses are all other CuDeco shareholders through the massive devaluation of their
holdings, and of course the Company itself, especially as close to $0.5 billion dollars has been erased from
CuDecos market capitalization. The losses came at a time, when arguably, the company was already
undervalued prior to the M&G selling, despite company fundamentals advancing strongly.
The weight of background issues supported by empirical trading data make the situation regarding M&G
sales highly questionable and deserving of a proper investigation. However, even putting background to
one side, the overwhelming extent of data anomalies cited in Section 3 still require a proper investigation.

37

8.4.2.6 REGISTRY CONSIDERATIONS
The tables provide a summary of registry activity over the period M&G sold out of their holding. The data
spans June 12, 2013 to August 26, 2013 which allows for shares to be settled following M&G trading on
August 21 (i.e., T plus 3 coincided with August 26).
The buying and selling by institutions as judged by registry share flows is also complicated by a large off-
market transfer involving 23 million shares that occurred on August 6 between JP Morgan Nominees and
Citigroup Nominees. It has been removed from the data, as shown in the adjusted table below, so that
share movements associated with on-market buying and selling can be more accurately assessed.
INSTITUTIONAL TRADING SUMMARY
Registry Movements for Trading from Jun 12 to Aug 21
Institutions OFF ON NET
Citicorp Nominees 4,418,790 27,218,546 22,799,756
HSBC Nominees 35,890,384 23,886,259 -12,004,125
J P Morgan Nominees 15,951,351 2,529,227 -13,422,124
JP Morgan Nominees 24,191,249 5,780,371 -18,410,878
National Nominees 1,661,968 2,367,802 705,834
Totals 82,113,742 61,782,205 -20,331,537



Details for the JP Morgan and Citicorp Crossing on August 6
Citicorp Nominees 0 23,150,968 23,150,968
JP Morgan Nominees 23,000,000 0 -23,000,000



ADJUSTED INSTITUTIONAL SHARE FLOWS
Institutions OFF ON NET
Citicorp Nominees 4,418,790 4,067,578 -351,212
HSBC Nominees 35,890,384 23,886,259 -12,004,125
J P Morgan Nominees 15,951,351 2,529,227 -13,422,124
JP Morgan Nominees 1,191,249 5,780,371 4,589,122
National Nominees 1,661,968 2,367,802 705,834
Totals 59,113,742 38,631,237 -20,482,505

RETAIL TRADING SUMMARY
Retail Broker
PID
OFF ON NET
Commonwealth (COMM) 2604 1,432,973 6,480,702 5,047,729
Etrade (ETRD) 1442 609,176 2,068,826 1,459,650
State One (SOSL) 6788 485,107 977,510 492,403
AIEX (AIEX) 12767 278,589 1,502,069 1,223,480
Wealthhub (WEALTH) 1227 189,609 1,035,542 845,933
Morgan Smith Barney (SBAR) 3383 119,975 2,116,930 1,996,955
Macquarie Retail (MACP) 2442 94,984 911,773 816,789
Bell Securities (BELL) 1543 86,592 488,038 401,446
Other - 586,136 2,820,016 2,233,880
Totals 3,883,141 18,401,406 14,518,265

OTHER
Entities OFF ON NET
Combination 171,140 1,495,257 1,324,117


Broker Nominees (Refer Appendix 1)
Entities OFF ON NET
Various Nominees 15,917,946 18,576,513 2,658,567
M&G holdings have been held in the
custodial accounts of HSBC and JP Morgan
Nominees. However following their selling,
only 20.5 million shares have moved out of
the accounts managed by institutions.
Large crossing between
Citicorp and JP Morgan
Commonwealth was clearly the
dominant retail broker although
when compared to all of COMM
trades, retail transactions
account for 75% of their buying
but only 32% of their selling.

Institutions directed around 3.1
million sells and around 2.4
million buys through COMM.
Retail transactions accounted
for the balance which amounted
to 6.5 mill buys and 1.4 mill sells
Entities classified as other include purchases by the
Company Employee scheme and by New Apex Asia, as
well as a variety of small fund transactions such as by
BT Portfolio Services, UBS Wealth etc

Broker Nominee accounts largely represent custodial
settlement flows on behalf of lenders and institutional
traders involved with short selling, however it is
institutional movements that reflect the buys (i.e., short
covers) & sells (i.e., short sales) involved
Note: JP Morgan Nominees
and J P Morgan Nominees
are two separate entities.
38

A reconciliation of the register to account for M&G selling is as follows.
Entity OFF ON NET
Institutions 59,113,742 38,631,237 -20,482,505
Retail
3,883,141 18,401,406 14,518,265
Other
171,140 1,495,257 1,324,117

-4,640,123

Of the 33.57 million shares owned by M&G prior to selling commenced on June 12, the register shows that
some changed hands but remained under institutional custodianship, while 20.483 million shares
transferred out of institutional ownership. They were taken up by small retail investors (i.e., 14.5 million)
and others such as New Apex Asia and the Company through its Employee scheme (i.e., 1.32 million).

The 4.64 million shares that are not accounted for by retail investors or other entities, as defined above,
were sitting in broker nominee accounts as at August 26 which allowed for T plus 3 from August 21. Market
related share flows showed nominee accounts holding 2,658,567 shares as stated previously, and a check
of broker settlement accounts shows a further 2,007,438 siting in broker settlement nominee accounts,
74% of which resided in the nominee account of UBS Securities . It is likely that most/all of the shares
sitting in nominee accounts represent shares belonging to institutions pending settlements.

If the nominee shares were to end up with institutions then the net drain out of institutional holdings
coinciding with M&G selling, would effectively move from 20.48 million shares to around 15.84 million
shares. It suggests that shares retained by institutional interests, after the sale of 33.57 million shares by
M&G, was around 17.7 million or 52.8% of the holding.

Retail investors have managed to pick up the balance which is around 15.8 million shares or 47.2% of the
M&G holding.

The final destinations of shares in many instances were arrived at only after being churned back and forth
by waves of institutional churn washing back and forth. To clarify the churning of shares, the register
reveals that the retail clients of the largest retail broker Commonwealth Securities net-bought 5.05 million
shares representing 35% of the 14.52 million shares purchased by retail interests. The breakdown of
COMM retail buying and selling from a retail perspective was as follows.

COMM Retail
OFF ON Net
Entities that only bought shares 0 4,898,582 4,898,582
Entities that only sold shares 226,597 0 -226,597
Entities who bought & sold shares 1,206,376 1,582,120 375,744
Totals 1,432,973 6,480,702 5,047,729

Shares traded back and forth by COMM clients (1.2 million shares) represented around 22% of the 6.48
million shares purchased. If that level of churn was applied to all of the 33.57 million sales by M&G, churn
volumes from trading would have seen volumes of around 41 million shares, not the 76.5 million that
occurred. Given that COMM is by far the largest retail broker, clearly it has been institutional trading not
retail activity that has forced volumes so high as M&G sold.




The non-genuine trading churn by institutions, a substantial amount of which represented short sales and
short covering purchases, would have severely compromised the markets ability to provide fair price
discovery, and would have contributed to prices being maintained at artificial levels.

Also buying and selling distributed across a range of brokers but representing the same interests, invariably
balances out when it is reconciled for settlement. Such trading represents a zero sum game where profitable
trades by some brokers are balanced by loss-making trades by others, but the net result can deliver unfair
control over pricing levels.

COMM
Traders

COMM retail traders
effectively traded 1.2
million shares back &
forth, and retained
375,744 shares
39

8.4.2.7 A FULL BREAKDOWN OF RETAIL SALES
Registry activity associated with retail investors (i.e., holdings registered in personal names or in the names
of small private companies) accounted for 14.518 million of net purchases.
OFF ON NET
Retail Registry Movements 3,883,141 18,401,406 14,518,265

A summary of brokers involved with retail buying and selling is provided below with the list in order of net-
purchases. The net-buying of brokers is compared to total buying which provides an indication of the
extent of trading back and forth by retail clients. The net-buying is also compared to total net-purchases so
broker comparisons can be observed.
Broker
Code
Broker
PID
Total OFF
(Sells)
Total ON
(Buys)
NET Buys
Net Buys Versus
Total Buys
% of Net
Buys
COMM 1402 1,432,973 6,480,702 5,047,729 77.9% 34.8%
SBAR 3383 119,975 2,116,930 1,996,955 94.3% 13.8%
ETRD 1442 609,176 2,068,826 1,459,650 70.6% 10.1%
AIEX 6381 278,589 1,502,069 1,223,480 81.5% 8.4%
WEALTH 1227 189,609 1,035,542 845,933 81.7% 5.8%
MACP 2442 94,984 911,773 816,789 89.6% 5.6%
SOSL 6788 485,107 977,510 492,403 50.4% 3.4%
BELL 1543 86,592 488,038 401,446 82.3% 2.8%
BAIL 3118 1,750 213,910 212,160 99.2% 1.5%
CMCS 2662 59,928 267,545 207,617 77.6% 1.4%
WILS 4125 11,050 197,900 186,850 94.4% 1.3%
ORDS 2338 4,375 186,870 182,495 97.7% 1.3%
TPPM 2552 40,613 199,757 159,144 79.7% 1.1%
RBSM 4064 40,367 170,288 129,921 76.3% 0.9%
PERSH 1791 55,000 154,743 99,743 64.5% 0.7%
BBY 1124 2,000 66,155 64,155 97.0% 0.4%
Other - 371,053 1,362,848 991,795 72.8% 6.8%

Totals 3,883,141 18,401,406 14,518,265 78.9% 100.0%

Commonwealth Securities is the leading net buyer by a wide margin with COMM clients also leading as
sellers. However, selling by retail investors (i.e., 3.88 million shares) is extremely minor when compared to
the institutional selling that occurred accompanying M&G sales.
Broker Morgan Smith Barney (SBAR) is also a standout performer, both with its 2 milion shares bought for
retail clients, and the fact that very little trading occurred. The SBAR trading in that sense appears to be
extremely well informed, as might be expected from its relationships with MSDW and CITI. A summary of
Morgan Smiths trading is also provided below.



0
100,000
200,000
300,000
400,000
500,000
600,000

SBAR Buys

SBAR Sells



Morgan Smith (SBAR) Buying & Selling as M&G Disposed of their substantial holding
Buying for New Apex Asia
Institutional
Selling
Major levels of selling didnt appear on the
register, so is assumed to be for institutions.
It would also serve to inform SBAR as well.
Retail Buying & Selling
Jun 12 21 28 Jul 4 Jul 24 Aug 12 19
Informed
buying?
40

8.4.2.8 LEADING BROKERS
The table summarizes the buying and selling activity of the leading brokers accompanying the M&G selldown.
The overall market share column compares the buying and selling of brokers to all buying and selling.
Morgan Stanley was supremely dominant in trading both as a buyer and seller. Commonwealth Securities
had a strong retail presence on the buying side. The institutional brokers within the shaded block were
responsible for churning large volumes of stock as M&G sold into the market.
Ignoring the large crossing of 12.796 million shares which occurred after the close of trading on August 21,
the market shares of brokers regarding all other trading are provided in the adjusted table. The crossing
completed M&Gs selling. A full list of broker trading data is available as Appendix 2.
All Trading June 12 to August 21 Adjusted Market Shares

Broker Sells Sells % Buys % %Buys Overall Share
MSDW 36,349,517 46.4% 18,247,021 23.3% 34.9%
COMM 4,558,817 5.8% 8,906,103 11.4% 8.6%
DMG 3,986,528 5.1% 4,834,651 6.2% 5.6%
CSUI 3,801,753 4.9% 2,963,360 3.8% 4.3%
MERL 3,512,918 4.5% 4,104,636 5.2% 4.9%
CITI 3,505,150 4.5% 4,230,512 5.4% 4.9%
MACQ 3,495,156 4.5% 3,615,244 4.6% 4.5%
UBS 2,486,318 3.2% 4,540,334 5.8% 4.5%
GS 2,066,849 2.6% 2,342,984 3.0% 2.8%
INST 1,889,401 2.4% 1,872,567 2.4% 2.4%
VIRT 1,608,813 2.1% 1,536,240 2.0% 2.0%
SUSQ 1,606,466 2.1% 1,641,316 2.1% 2.1%
GETCO 1,281,967 1.6% 1,281,967 1.6% 1.6%
SOSL 986,343 1.3% 1,541,417 2.0% 1.6%
CITADEL 913,600 1.2% 910,477 1.2% 1.2%
ETRD 1,218,315 1.6% 2,818,219 3.6% 2.6%
AIEX 815,707 1.0% 1,943,689 2.5% 1.8%
SBAR 806,636 1.0% 3,221,215 4.1% 2.6%
RBSA 535,111 0.7% 577,348 0.7% 0.7%
ABNA 437,809 0.6% 449,803 0.6% 0.6%
JPM 374,610 0.5% 264,681 0.3% 0.4%
Others (27) 2,024,232 2.6% 6,418,232 8.2% 5.4%
Totals 78,262,016 100% 78,262,016 100% 100%
8.4.2.9 SETTLEMENT ACCOUNT SHARE FLOWS
The most active brokers regarding settlements are listed in the table. UBS Securities is the clear leader at
22.1% of all ON and OFF share flows concerning broker settlement accounts.
Entity Broker PID CODE Off On Net Share %
Warbont Nominees UBS Securities 1505 UBS 8,495,017 9,959,553 1,464,536 22.1%
Comsec Nominees Commonwealth 1402 COMM 6,016,286 6,101,142 84,856 14.5%
Bainpro Nominees Deutsche Bank 2104 DMG 4,638,863 4,718,678 79,815 11.2%
MLEQ Nominees Merrill Lynch 3663 MERL 4,393,550 4,387,294 -6,256 10.5%
Ecapital Nominees JP Morgan 2972 JPM 4,101,089 4,192,282 91,193 9.9%
Etrade Nominees Etrade 1442 ETRD 1,997,751 1,999,251 1,500 4.8%
Netshare Nominees AIEX 6381 AIEX 1,955,933 1,979,610 23,677 4.7%
Bow Lane Nominees Morg Smith Barney 3383 SBAR 1,749,523 1,780,523 31,000 4.2%
Woodross Nominees Macquarie Insto 1572 MACQ 1,526,682 1,555,233 28,551 3.7%
Pershing Nominees Pershing 1791 PERSH 943,208 962,208 19,000 2.3%
State One Nominees State One 6788 SOSL 909,497 909,497 0 2.2%
Wealthhub Nominees Wealthhub 1227 WEALTH 763,072 763,072 0 1.8%
Cs Fourth Nominees Credit Suisse 1103 CSUI 762,920 762,920 0 1.8%
Idameneo (No 79) Macquarie Retail 2442 MACP 762,685 773,785 11,100 1.8%
BBY Nominees BBY 1124 BBY 241,753 246,053 4,300 0.6%
Other

1,476,702 1,650,868 174,166 3.7%



Totals 40,734,531 42,741,969 2,007,438 100%
Broker Sells % Buys % Overall
MSDW 36.0% 8.3% 22.2%
COMM 7.0% 13.6% 10.3%
DMG 6.1% 7.4% 6.7%
CSUI 5.8% 4.5% 5.2%
MERL 5.4% 6.3% 5.8%
CITI 5.4% 6.5% 5.9%
MACQ 5.3% 5.5% 5.4%
UBS 3.8% 6.9% 5.4%
GS 3.2% 3.6% 3.4%
INST 2.9% 2.9% 2.9%
VIRT 2.5% 2.3% 2.4%
SUSQ 2.5% 2.5% 2.5%
GETCO 2.0% 2.0% 2.0%
SOSL 1.5% 2.4% 1.9%
CITADEL 1.4% 1.4% 1.4%
ETRD 1.9% 4.3% 3.1%
AIEX 1.2% 3.0% 2.1%
SBAR 1.2% 4.9% 3.1%
RBSA 0.8% 0.9% 0.8%
ABNA 0.7% 0.7% 0.7%
JPM 0.6% 0.4% 0.5%
Others 3.1% 9.8% 6.4%
Totals 100% 100% 100%


41

The dominant role of UBS Securities in terms of settlements (22.1%) as M&G sold down their holding, is
disproportionate to its market share of buying and selling in active trading (i.e., 4.5%). (The corresponding
figures from January through May 2013 were 5.4% in regards to buying and selling and 37.2% regarding
settlements. It draws attention to why there should be such a dramatic change). Also, a 4.5% market share
of buying and selling activity didnt translate into the names of private clients on the register so it is
assumed that UBS activity is institutionally based.
UBS Nominee accounts represented 7% of all broker nominee share movements which are normally
associated with custodial share flows in relation to short selling and short covering. (Short sales and short
covering purchases are reflected by movements in relation to institutional accounts). The 7% compares to
only 0.5% in the period January through May 2013, and to 65.9% back in November 2010 coinciding with
M&G accumulating shares. Again, it raises the questions about why there has been a difference. To further
confuse the issue, Merrill Lynch accounted for 43.4% of all nominee share flows but had a market share in
relation to buying and selling about the same as UBS. (Refer Appendix 1 for broker nominee share flows)
Discrepancies between market shares regards buying & selling compared to their proportion of settlement
activity might be suggesting that trading by other brokers is funnelled through UBS regarding settlements
or it might be suggesting that UBS is acting as the conduit for a substantial amount of securities lending
share flows. Whatever the arrangement, it draws attention to the anomalous trends in UBSs own buying
and selling, particularly in regard to strong participation in auctions and also in regard to selling on days
that has targeted Downticks in price.
Certainly, the trading anomalies demonstrated by research are much more likely to be reflecting trading in
support of corporate objectives, not genuine buying and selling for clients. They are also likely to represent
trading issues stemming from attempts to exert unfair control over the share price as alluded to by the
Company itself in a request to be removed from the ASX short selling list.
Genuine trading doesnt result in wide scale trading anomalies and isnt associated with companies being
chronically undervalued or Companys having a share price that is virtually unresponsive to positive news.



0%
5%
10%
15%
20%
25%

% of Settlements

% of All Buys & Sells



Broker Settlement Profiles versus their Buying and Selling Profiles
June 12 to August 21, 2013 as M&G Sold
The settlement
anomaly coincides
with strong DT
anomalies by JPM
The settlement
anomaly coincides
with strong auction
anomalies by UBS
The settlement
anomaly coincides
with broker nominee
anomalies by MERL
Wide variations
between
settlements and
market profiles
are regarded as
anomalous
42

8.4.2.10 MORGAN STANLEY SELLING versus COMMONWEALTH SECURITIES BUYING
Selling by Morgan Stanley amounted to 36.35 million shares which compares to total disposals by the M&G
Group of 33.57 million shares. Selling for M&G therefore represents 92% of all of MSDWs selling activity.
Morgan Stanley also purchased 18.25 million shares with a single crossing of 12.8 million shares accounting
for 70.1% of their buying. Other crossings in active trading represented a further 3.647 million shares.
Ignoring the large after market crossing on August 21, the active selling by MSDW between June 12 and
August 21 was distributed to brokers as shown in Table 1. Table 2 shows all brokers who sold to COMM.














It is somewhat counterintuitive that the largest buyer in the market, represented by the pool of
Commonwealth Securities retail clients, only managed to secure 11% of the shares sold by Morgan Stanley
who represented the largest seller in the market. The COMM buying (Table 2) is made up from purchases
from MSDW, COMM crossings and smaller amounts of buying from a number of brokers. Of the 8.91
million shares purchased , around 73% of the COMM buying or 6.48 million shares found its way to the
register for retail clients. MSDW sales to COMM represent only 40% of the shares that showed as retail
purchases. The balance of COMM retail purchases came from sales by other brokers representing short
sales, sales by other instituions or sales by institutions who had previously purchased shares from MSDW
and re-cycled them back into the market. The situation involving large volumes of stock churn was always
going to deliver low returns for M&G sales, and both M&G and MSDW would have known that. Yet they
chose that method of disposing of the large holding in favour of a traditional approach that would most
likely have resulted in subtantially increased returns.


Buyers from
MSDW
Number % of Sales
MSDW XTs 3,647,102 15.5%
COMM 2,595,121 11.0%
DMG 1,779,184 7.6%
UBS 1,613,990 6.9%
MERL 1,605,906 6.8%
CITI 1,481,954 6.3%
SBAR 1,291,524 5.5%
MACQ 1,170,039 5.0%
ETRD 806,977 3.4%
SUSQ 691,163 2.9%
INST 644,805 2.7%
SOSL 640,303 2.7%
CSUI 606,523 2.6%
GS 572,875 2.4%
GETCO 517,546 2.2%
VIRT 468,534 2.0%
AIEX 459,975 2.0%
MACP 450,054 1.9%
CITADEL 382,068 1.6%
NATO 349,384 1.5%
RBSA 213,050 0.9%
BELL 193,924 0.8%
BBY 187,156 0.8%
BTIG 170,904 0.7%
Other 1,013,336 4.3%
Totals 23,553,397 100%



Sellers to
COMM
Number
% of COMM
Buys
MSDW 2,595,121 29.1%
COMM 750,728 8.4%
MERL 586,277 6.6%
DMG 577,719 6.5%
CITI 441,687 5.0%
SUSQ 404,521 4.5%
VIRT 401,223 4.5%
UBS 388,996 4.4%
MACQ 368,783 4.1%
GETCO 356,475 4.0%
CSUI 269,129 3.0%
GS 243,517 2.7%
INST 210,411 2.4%
CITADEL 192,133 2.2%
SOSL 173,486 1.9%
Other 945,897 10.6%
Totals 8,906,103 100%

COMM Retail Purchases (from the register)
6.48 million

Shares bought from MSDW
2.595 million (as above)

Only 40% of COMM Retail purchases came
from MSDW sales
Table 1: MSDW Selling Table 2: COMM Buying
COMM buys from
MSDW represent
only 11% of the
23.55 million shares
sold by MSDW
COMM retail net
purchases
accounted for 34.8%
of all retail net
purchases.
Ignores the
large off-
market
crossing on
August 21
As mentioned in the introduction, applying Occams razor to a situation that makes no logical sense, might
suggest that the M&G sales were intended to cause maximum disruption to the share price, rather than
the most profitable exit price. If so, then the selling was extremely successful.
43

8.4.2.11.1 AUCTION TRADES
The table monitors the buying and selling by brokers during auctions based on the volumes traded. It also
compares auction activity as buyers and as sellers with broker market shares regarding their buying and
selling in normal trading. (The comparisons are based on the information in the adjusted table of Section
8.4.2.7, which ignores the impact of the large off-market placement)
Where there have been noticeable differences between auction activity and normal trading activity the
data has been highlighted (i.e., pink for increases and blue for decreases). Such data provides a window
into manipulative activity as increased exposures can suggest motivations to impact pricing levels.
Broker
Auction
Sells
Auction
% Sells
Live Trades
% Sells

Auction
Buys
Auction
% Buys
Live Trades
% Buys
MSDW 1,887,662 36.9% 47.1%

435,702 8.5% 24.3%
UBS 614,196 12.0% 2.6%

581,242 11.4% 5.4%
COMM 546,290 10.7% 5.5%

696,613 13.6% 11.2%
CITI 414,823 8.1% 4.2%

364,756 7.1% 5.3%
MACQ 267,720 5.2% 4.4%

723,783 14.2% 4.0%
CSUI 246,235 4.8% 4.9%

318,617 6.2% 3.6%
DMG 210,379 4.1% 5.2%

254,595 5.0% 6.3%
SBAR 162,620 3.2% 0.9%

172,982 3.4% 4.2%
MERL 143,592 2.8% 4.6%

233,857 4.6% 5.3%
SOSL 117,227 2.3% 1.2%

103,367 2.0% 2.0%
GS 78,394 1.5% 2.7%

176,911 3.5% 3.0%
INST 61,416 1.2% 2.5%

34,028 0.7% 2.5%
JPM 51,289 1.0% 0.4%

62,340 1.2% 0.3%
SUSQ 45,720 0.9% 2.1%

163,843 3.2% 2.0%
ETRD 45,232 0.9% 1.6%

213,852 4.2% 3.6%
BBY 29,741 0.6% 0.4%

116,018 2.3% 0.8%
Others 21 189,449 3.7% 9.7%

459,479 8.6% 16.4%
Totals 5,111,985 100.0% 100.0%

5,111,985 100% 100%

MSDW was prominent during auctions as a seller and a buyer but at reduced levels compared to their
prominence regarding live trading.
Brokers with substantially different trading profiles during auctions may be summarized as:
INCREASED SELLING ACTIVITY: UBS by a wide margin then COMM, CITI, and SBAR
DECREASED SELLING ACTIVITY: MSDW by a wide margin, then MERL
INCREASED BUYING ACTIVITY: MACQ and UBS by substantial amounts then CSUI
DECREASED BUYING ACTIVITY: MSDW, by a wide margin
The prominence of brokers during auctions over extended periods of time suggests intent to control pricing
outcomes rather than genuine trading. Audits are required to establish whether or not buying and selling
by the same interests (or interests affiliated with their trading) was spread across the more influential
brokers. If so, then the trades need to be regarded as wash trades or trades that have had the same effect
(i.e., no change to beneficial ownership). Auction pricing in that scenario would constitute attempts to fix
and maintain artificial prices, which based on the recent High Court decision, must be regarded as non-
genuine and therefore manipulative.
44

8.4.2.11.2 FURTHER TRADING ISSUES
The following screen snapshot captures trading at 3.59 pm on July 19, just prior to the closing auction
commencing. Bids and offers have been highlighted that might represent phony or non-genuine bids in
order to control prices through propping and capping. With prices going through at 174.5 cents many of the
Bids and Asks are well out of harms way in terms of being executed. On the other hand if they do get caught
up in a large buy order or a large sell order they may represent transactions at opportune levels provided
they stay long enough for a hostile order to execute. The term hostile is used because the majority of
buying and selling is generated by institutional algorithms able to direct transactions to brokers within an
inner circle. It is why retail investors are often frustrated in trying to get an order fill, as target orders often
disappear by the time the retail order reaches the exchange. <Refer: HFT Trading is Cuckoo>

Likely prop
bids
Likely price
caps
The anonymous nature of order placement in active trading means that entities looking to unfairly influence
the market can do so. Bids and Asks can be applied then withdrawn, or placed and retained where there is
not much chance of executing, but the structure of the market is nevertheless impacted.

The anonymous nature of auction bidding however can be brought to light by observing screen snapshots at
the auction close and then comparing to broker data when IDs become known (i.e., after T plus 3). Some
comparisons are made in the next sections.
The size of some of the Asks
and the repeat nature of the
Asks demonstrate the
artificial nature of sell orders
that are most likely placed in
an attempt to control prices.
The contrived nature of
order placement, is again
evident when the Asks are
summarized using colour
coding.
The results are as follows:
2 @ 15,000
5 @ 2,564
2 @ 1,442
2 @ 1,495
10 @ 900

The splitting of bids to
disguise the orders is highly
dubious and so too are the
matching Bids and Asks that
are a prominent trend in the
data. It suggests that trading
can be extremely non-
genuine and artificial.
The size of some of the
Bids, the repeat nature of
the Bids and the match up
with Asks (see opposite)
suggest non-genuine
bidding and a somewhat
contrived, artificial market.
The repeat nature of Bids
has been summarized using
colour coding.
The results are as follows:
3 @ 13,385
3 @ 2,564
3 @ 1,442
2 @ 1,495
4 @ 900
2 @ 5,000

The splitting of bids is also
highlighted by the red
rectangles.
Bids
Asks

45

8.4.11.3 ANALYSIS OF AUCTION ORDERS Closing Auction July 19, 2013
The charts compare Bids and Asks from when the auction commenced and two minutes later.
The remarkable feature of the auction is the arrival of a purchase order for 365,643 shares. Up until the
auction commenced the number of shares that had traded over the course of the entire day was 835,413.
The single auction bid represented 43.8% of all shares that had traded in the previous 5 hours. It is a highly
unusual situation deserving of close regulatory scrutiny.
The auction closed 2 cents up from the price immediately before the auction commenced, but still
represented a fall of 6 cents from the opening price for the day.
The large buy order which was pitched at 177.5 cents was filled at 176.5 cents due to the selling that came
in to meet it. It would be helpful to know who the order was for, and what relationship, if any, existed
between the entity placing the order and interests associated with M&G. It would be also helpful to know
if the order represented an attempt to cover for short sales made during the day or whether it was a
genuine purchase order by someone looking to invest in the company. Audits would clarify the situation.





















Immediately after 4.00 pm

Screen Snaphot 4.02 pm

Dubious
prop bids?
Dubious Asks
to cap prices?
Auction Orders
Pending the Close
Dubious
prop bid
added?
The
dubious
Asks
became
part of the
auction at
4.02 pm


4.05 pm Snapshot 4.09 pm Snapshot
Further selling
added late
The sell orders (i.e., the Asks) all changed with large Asks appearing in response to the large buy order (refer 4.05 pm
snapshot below) and then further selling appeared late in the auction at 4.09 pm, which tended to cap prices.
2 large sell
orders added
46

The following screen snapshots compare Bids and Asks just before the close, and then on the close, which
occurred at 4.10.45 pm. As the close drew near, the 50,000 buy order is seen to split into two orders but
for only 40,000 shares. Also, a new 12,000 buy order appeared almost simultaneously.













By comparing the 4.10.40 pm snapshot to the disclosed auction trading data which became available at T plus 3, the
brokers associated with the various Bids and Asks can be identified. The results have been added to the auction close.













Just before the close at 4.10.00 pm, July 19, 2013

Immediately prior to the close 4.10.40 pm

Immediately Prior to the Close

Buyers
(Iress Broker Data)
Buyer Volume
DMG 1,493
JPM 28
DMG 828 (2 Orders)
MERL 145
MACQ 1,999 (2)
MSDW 40,000 (2)
MACQ 365,643
COMM 12,000
MSDW 47,048
Total 422,136

Notes:

Some orders have been
split as indicated in the
brackets.
The MERL Bid and Asks
were adjusted slightly in
the instant between the
screen snapshot and the
close. The changed
orders are shown using
red font.

Sellers
(Iress Broker Data)
Buyer Volume
COMM 894
MACQ 182
CITI 577
UBS 149
MERL 547 (3)
CLSA 4,794
SOSL 13,510
SUSQ 11,620
MSDW 251,443 (2)
CITI 20,000
CSUI 2,900
UBS 5,634
MSDW 3,221
INST 2,694
MSDW 3,221
CITI 31,979
MSDW 2,564
CSUI 3,112
MACQ 1,333
CSUI 3,246
COMM 3,000
MSDW 55,516 (3)
Totals 422,136

Only 55,516 shares of
the MSDW price
capping orders filled
Price Cap
47

COMMENT 8.4.11.3 contd
The auction trading reveals manoeuvring by brokers that suggest attempts to control the auction process
rather than genuine buying and selling. Broker Morgan Stanleys adjustment to orders provides a good
example of the constant jockeying for position that takes place in deciding final pricing outcomes.
In particular Morgan Stanley on July 19 was noted for:
o providing the initial selling to counter the substantial buy order placed by Macquarie;
o adjusting orders on both the buying and selling side as the auction progressed;
o rapidly adjusting a 50,000 order down to 40,000 just before the final auction deadline. The action
was instrumental in setting/controlling the final pricing outcome (i.e. 176.5 cents);
o crossing less than a third of its buying when it actually had a seller for the remainder in M&G.
The 100,000 shares put up by MSDW for sale only got a fill for 55,516 shares demonstrating that the 3
orders had the effect of capping the auction. The balance of shares (47,048) was crossed after the
market closed via a special crossing.
MSDWs selling is likely to have been for the M&G Group although their buying and the after-market
crossing are less certain. So too is the buying by Macquarie.
The data as it stands is highly suggestive of control over prices rather than genuine buying and selling. The
trends evident on July 19, is for institutional brokers to dominate using tactics such as:
o placing influential bids as both buyers and sellers but not crossing the bulk of orders when they
clearly have a capacity to do so;
o placing multiple bids continuously as the auction progresses;
o using dubious small orders that cannot possibly represent genuine client orders;
o the placement of large orders to cap prices;
o the placement of large orders to prop prices;
o active trading at auction with volumes inordinately larger than trading for the entire day;
o the holding back of orders to deal though auctions rather than in the active market;
o the sudden withdrawal of prominent bids and asks; and
o the placement of orders and the re-adjustment of orders precisely on the close.
The interplay between institutional brokers suggests that the auction trades in many cases could be wash
trades, or trades that have the same effect of wash trades with no changes to beneficial ownership when
considered as a group. Certainly the register at T plus 3 showed no activity whatsoever associated with
Macquarie, despite their large buying during the auction. Audits would clarify the situation.
The auction to fix prices at the close of the day is a necessary part of trading however the tactics used
continuously by particular brokers, strongly resembles attempts to control prices through collusive activity
rather than the genuine closing out of orders at the end of the day.
The same cartel-like level of control is also observed during opening auctions. Further examples follow.

48

8.4.11.4 ANALYSIS OF AUCTION ORDERS Closing Auction July 16, 2013
The screen snapshot below was taken an instant before the close. In the fractions of a second between the
snapshot and the close, changes occurred to some orders which are shown in the chart as follows:
o orders that have disappeared and so didnt actually form part of the final auction have been shown
ruled out;
o orders that have been altered micro-seconds before the close are indicated by the broker being
shown using a red font;
o where orders have undergone changes, the final amount processed is shown in the yellow shaded
areas; and
o multiple bids placed one after the other that have gone through as a single order are shown
bracketed.
The final auction buys and sells as revealed by broker data after T plus 3 are listed separately. Where
changes have occurred at the close compared to the screen snapshot brokers have been shown in red font.





Spurious or non-
genuine prop Bids?
Asks placed to
help cap prices?
Final Auction
Buyers
Broker Volume
DMG 2945
MACQ 10074
UBS 24895
SUSQ 8070
CSUI 3008
MERL 575
Totals 49567

Final Auction
Sellers
Broker Volume
JPM 1669
MACQ 151
MERL 1341
MSDW 500
MACQ 300
GETCO 949
MSDW 108
COMM 5079
CITI 5148
MSDW 34322
Totals 49567

The activity suggests non-genuine trading for the following reasons:
o The large cap by MSDW with only 24% of the order getting filled.
o The adding of orders by DMG and MERL progressively through the auction and then DMG suddenly
withdrawing one at the close.
o The frivolous nature of tiny orders which were withdrawn on the close.
o The spurious nature of BIDS and ASKS outside of the auction that indirectly shaped the auction process.
Further
dubious Bids?
49

8.4.11.5 ANALYSIS OF AUCTION ORDERS Closing Auction July 17, 2013
Once again the screen snapshot was taken just an instant before the auction close. The auction was only
lightly bid with 23,095 shares changing hands but the process was similar to July 19 with institutional
brokers again managing proceedings through the placement of orders best described as contrived.

A slightly earlier screen snapshot also draws attention to the likely non-genuine nature of orders represented by
the repeat Asks of parcels involving 1,493 sharess, 3 of which were quickly withdrawn as the close drew near








Final Auction Buyers
Broker Volume
CITI 3732
MACQ 4676
UBS 88
CSUI 1497
ETRD 8350
SUSQ 4752
Total 23095

Final Auction Sellers
Broker Volume
DMG 7465
COMM 525
JPM 1196
DMG 69
JPM 308
CITI 324
MACQ 1504
CITI 1045
GETCO 546
MSDW 7908
CITI 2193
MERL 12
Total 23095

Spurious or non-
genuine prop bids?
Asks placed to
help cap prices?

Other non-genuine
prop bids?
Other Repeat Bids
8 repeat Asks were placed
by the same broker then 3
were quickly withdrawn
Other Repeat Bids
Broker IDs are not available
until after the close when
trades are executed
50

8.4.11.6 ANALYSIS OF AUCTION ORDERS Closing Auction July 22, 2013







Easily identified
repeat Asks which
appear to be added
to weigh down the
market in favour of
the close. A close that
was mostly
controlled by the two
MSDW capping bids

Final Auction Buyers
Broker Volume
DMG 1501
MACQ 131
DMG 192
MACQ 2955
UBS 178
MACQ 9076
MSDW 7581
CITI 3516
CSUI 9491
COMM 6676
CSUI 4080
MERL 1
Total 45378

Final Auction Sellers
Broker Volume
COMM 165
JPM 76
CITI 896
UBS 1283
INST 2241
MSDW 40717
Total 45378

Spurious or non-
genuine prop bids?
Asks placed to
help cap prices?
Again, the auction activity suggests non-genuine trading for the following reasons:
o The large cap (compared to all other orders) by MSDW split into 2 orders with not all of the 2
nd

order getting filled.
o The orders by DMG of 8 shares at 189.5 cents followed by 1493 shares at 194.5 cents at the top
of the buying queue, appear to be designed to impact pricing levels rather than dealing
genuinely for 2 clients or even the same client.
o The frivolous nature of tiny orders such as Merril Lynchs one share Bid, and the selling by CITI
and JPM.
o The spurious nature of BIDS and ASKS outside of the auction that again indirectly shaped the
auction process and which were withdrawn before trading resumed the next day.
Price Caps

BIDS ASKS
51

8.4.11.7 ANALYSIS OF AUCTION ORDERS Closing Auction July 23, 2013
The screenshots show adjustments made at the close of the auction with the auction extending to include
COMM as a part buyer, MERL as a part seller, CSUI suddenly appearing as a large seller together with MSDW
suddenly increasing its selling by 10,000 shares as well. Adjustments have been added to the 2
nd
screen
capture to reflect the changes. Small orders that were withdrawn have been ruled out, and the yellow
shading highlights instantaneous changes that were made.













Auction Orders Approaching the Close Auction Adjustments at the Close
AUCTION BUYERS

AUCTION SELLERS




DMG 1317

JPM 665
CITI 465

MACQ 316
UBS 54576

COMM 62420
MACQ 16242

CITI 896
UBS 91

BBY 6000
VIRT 56

MSDW 49488
UBS 5391

COMM 62581
INST 1583

CSUI 8984
MERL 17164

MERL 514
SUSQ 11720


SBAR 15000

Total 191864
COMM 8000


ETRD 5000


SOSL 20000


MSDW 17164


CSUI 4320


MACQ 3019


COMM 667





MACQ 384


CITI 9705

Total 191864

Two buy orders that
appeared
instantaneously at
the close and didnt
show in the screen
capture
COMMENTS
The substantial changes to orders immediately prior
to the auction close, again suggest non-genuine
trading. The changes include:
o The increased selling by CSUI.
o The increased selling by MSDW
o Adjustments to buying orders by DMG and UBS
Also of concern are the following observations
concerning the auction:
o The selling by MSDW which effectively acted
as a a price cap.
o The buying by MSDW with two identical orders
of 8,582 shares which were put through the
market rather being crossed. MSDW obviously
had access to selling that would enable them
to be crossed.
o The two large selling orders by COMM which in
total represented 65% of all auction selling.


Spurious
Asks ?
Also adds
to 3622
Auction
extended
52

Further issues that raise concerns:
1. The COMM selling was not reflected on the register in relation to its retail clients. It means that it
was institutionally based and likely to be strategic selling designed to help control the auction,
rather than genuine selling for a large client or clients. Audits would clarify the situation.

The tendency for COMM to camouflage institutional activity amongst its retail clients has been
observed in trading over a period of 3.5 years. By so doing it is effectively acting in a predatory
manner against the interests of its retail clients and in support of sophisticated investors. That is
because many of the trading actions by sophisticated investors have produced panic amongst retail
investors who are either forced out of their holdings through margin or panic. It also crosses
internal orders using its dark pool facility where panic driven retail selling is snapped up.

Examples of COMM being used in this way include the days where lower prices have been targeted
with repetitive small selling transactions designed to cause Downticks. Refer Sect 8.4.3.10. Another
example is on August 18, 2010 when sophisticated investors acting through COMM were responsible
for much of the share price volatility that occurred and which caused retail investors to panic.

2. Further market integrity issues relate to selling above the auction market with five repeated orders
of 3,622 shares each, and another double order also equating to 3,622 shares. The orders strongly
suggest attempts to manipulate pricing outcomes. The behaviour is a regular feature of trading as is
indicated by the previous examples brought to attention for July trading.

8.4.11.8 ANALYSIS OF AUCTION ORDERS Closing Auction July 24, 2013
The screen snapshot just prior to the close on July 24 has been adjusted to show the final auction outcome.

The multiple Asks by DMG, which were adjusted right at the close and adjustments to Asks by INST and CITI
again show the likely targeting of pricing outcomes rather than genuine selling. The adjustment by DMG, its
buy orders, and the sudden appearance of the small buy order by UBS and the sell by MACQ not present in
the screen capture, can be regarded similarly. The selling by Susquehanna (SUSQ), which is likely to
represent institutional dealings, represents a cap on prices with only 101 shares actually trading.
Final Auction Buyers
Broker Volume
COMM 1424
MSDW 770
JPM 178
CITI 427
DMG 494
MACQ 324
MERL 51
UBS 148
MACQ 3806
MERL 304
UBS 255
ORDS 2000
SBAR 8501
CSUI 101
Total 18783

Final Auction Sellers
Broker Volume
DMG 2799
MERL 298
MACQ 989
UBS 2548
INST 986
CITI 1871
CSUI 2887
MSDW 6304
SUSQ 101
Total 18783

Price Cap
53

8.4.11.9 ANALYSIS OF AUCTION ORDERS Closing Auction July 25, 2013
Screenshots approaching the close on July 25, again show the spurious sell orders for parcels of 1,493
shares (refer July 24). On this occasion they disappeared by the close.





















Auction Orders Approaching the Close Auction Adjustments at the Close
Spurious
Asks?
Price
Cap?
Asks that were
suddenly
withdrawn
AUCTION BUYERS

AUCTION SELLERS




COMM 406 (2)

MACQ 194 (2 orders)
CITI 5985 (2)

MSDW 1402
JPM 1311

COMM 15408
MERL 1615 (4)

GS 5966
DMG 292

MSDW 14367
MACQ 4636(2)

CITI 3908
UBS 18

INST 1752
AIEX 3600


UBS 268 (2)

Total 42997
COMM 3000


SOSL 3000


UBS 1000


COMM 5730


CSUI 3115


DMG 200


CSUI 5847 (2)


AIEX 2974





Total 42997

Control over auctions has been
observed and documented over a
period exceeding 3.5 years.

So too have attempts to minimize
the impact of all positive
announcements
COMMENTS
Again, the substantial changes to orders immediately prior
to the auction close are suggestive of non-genuine trading.
The changes include:
o The removal of the 3 sell orders for 1493 shares
o The increased buying by MERL
o The adding of the CITI sell order of 3908 shares
Also of concern are the following observations concerning
the auction:
o The splitting of orders and the failure to cross orders
when brokers have access to both buying and selling
clients. E.g., COMM, CITI and MACQ.
o The large sell order sitting above the auction of
47,676 shares
o Spurious orders are out of range of the auction but
also serve to help control the market. The orders
referred to are the five 3,154 Ask parcels, and the
three 8,309 Asks also highlighted ( ). The repeat of
these orders above the market appears to be an
obvious attempt to add selling pressure to the
auction process. Similar buying below the auction
means that the auction price is heavily locked into a
narrow price band.

Also adds
to 3154
54

8.4.11.10 ANALYSIS OF AUCTION ORDERS Closing Auction August 14, 2013

Once again there are a number of concerns with the auction trading for the close on August 24, 2013.
They are as follows.
The progressive buy orders by DMG and the splitting of two of their orders into frivolous trades.
Particularly since DMG is associated with institutions who are the large players in the market.
The dubious small sell by MSDW (192 shares) presumably to assist with establishing a closing price
rather than genuinely dealing for its large client M&G.
The propping of the share price with large buys, and repeated buys (i.e., parcels of 18,648 twice,
and 9,871 shares twice), and similarly, repeated capping Asks to help force a closing outcome.
The capping of the share price with large sells and also parcels of 9,871 shares being repeated.
The buying matched by selling of parcels of 9,871 shares (two lots), 10,000 shares (one pair) and
10,270 shares (one pair).


Spurious or non-
genuine prop bids?
Spurious Asks with
matching Bids
FINAL AUCTION
BUYERS
Broker Volume
DMG 2984 (2)
CSUI 2994
ITG 468
DMG 32 (2)
COMM 748
JPM 126
MACQ 58
DMG 711
MERL 440
MACQ 2349
UBS 492
COMM 2900
SBAR 25000
CSUI 1704
UBS 535
Total 41541

FINAL AUCTION
SELLERS
Broker Volume
DMG 1530
INST 762
COMM 1885
MERL 612
DMG 2
MSDW 192
MACQ 2531 (2)
UBS 1370 (2)
CITI 3618
UBS 29
MSDW 16449
ETRD 10561
INST 1650
VIRT 10
INST 340
Total 41541

Matched Buys
and Sells
Repeat Bids
The tendency for brokers to get involved with an auction process and then to generate multiple buys and
sells (Bids and Asks) in support of a desired pricing outcome, many of which sit outside the auction
parameters, amounts to share price manipulation as there is no expectation that the spurious orders will
even execute in the market. Essentially the orders are non-genuine and their placement contributes to the
establishment of artificial pricing levels.
55


Section 8.4.3

DOWNTICK TRENDS ACCOMPANYING M&G SALES
56

8.4.3.1 JUNE TRADING 2013: Downtick Sales versus All Selling for the Period June 12 to June 28


















JUNE TRADING 2013: Downtick Purchases versus All Buying for the Period June 12 to June 28











Broker DTs DT % % Buys
MSDW 382 22.6% 33.0%
MERL 198 11.7% 5.8%
CSUI 161 9.5% 3.1%
UBS 137 8.1% 5.8%
VIRT 113 6.7% 2.8%
INST 106 6.3% 4.2%
MACQ 84 5.0% 5.2%
DMG 79 4.7% 2.9%
GS 76 4.5% 4.3%
CITI 67 4.0% 6.5%
COMM 63 3.7% 6.2%
GETCO 55 3.3% 4.0%
SBAR 24 1.4% 3.6%
SUSQ 18 1.1% 2.4%
AIEX 17 1.0% 1.4%


0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
MERL and CSUI were active in forcing downward
movements in price from low volumes of sales,
while MSDW who were clearly the most active
selling broker tended to avoid Downticks with the
bulk of their selling. The trends are contrary to
those expected from genuine selling

DT Involvement as Sellers

% of DTs as Sellers

% of All Selling




Broker DTs DT % % Buys
COMM 204 12.1% 15.9%
VIRT 189 11.2% 2.8%
GETCO 151 8.9% 4.0%
CITI 145 8.6% 7.8%
JPM 141 8.3% 0.3%
UBS 116 6.9% 4.3%
INST 103 6.1% 3.0%
GS 98 5.8% 6.1%
CSUI 72 4.3% 3.5%
DMG 59 3.5% 5.4%
MERL 58 3.4% 6.0%
SBAR 56 3.3% 7.9%
AIEX 46 2.7% 3.2%
MACQ 38 2.2% 4.0%
ETRD 37 2.2% 4.2%


0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
DT Involvement as Buyers

% of DTs as Buyers

% of All Buying



VIRT , GETCO and JPM are all associated with
high levels of DT purchases but result from
comparitively low levels of buying in the
market. Again the trends are highly suspicious.

Combined, MERL, CSUI and
VIRTU accounted for 27.9 % of
all Downtick trades with only
11.7 % of all selling. Yet MSDW
recorded 22.6% of DT trades
with 33% of all selling, and was
the genuine seller in the market
representing M&G. The situation
is implausible from a perspective
of genuine trading.
The success enjoyed by Virtu
Financial, Getco Australia and
JPM Morgan in picking up large
numbers of cheaper Downtick
purchases, with only minor
buying profiles, demonstrate the
selective dealings made possible
through algorithms.
JUNE TRADING, 2013 as M&G SOLD
57

8.4.3.2 JULY TRADING 2013: Downtick Sales versus All Selling for the Period July 2 to July 31


















JULY TRADING 2013: Downtick Purchases versus All Buying for the Period July 2 to July 31











Broker DTs DT % % Sells
MSDW 557 16.0% 36.4%
CSUI 516 14.8% 5.6%
COMM 477 13.7% 7.6%
UBS 271 7.8% 3.0%
MACQ 206 5.9% 5.9%
JPM 198 5.7% 0.3%
VIRT 195 5.6% 3.1%
MERL 188 5.4% 7.8%
INST 184 5.3% 2.9%
DMG 171 4.9% 3.7%
CITI 94 2.7% 5.5%
GS 68 1.9% 3.0%
RBSA 65 1.9% 1.5%
GETCO 38 1.1% 1.3%
ETRD 36 1.0% 1.5%


0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
CSUI, COMM, UBS and JPM were active in forcing
downward movements from low volumes of sales,
while MSDW who were clearly the most active selling
broker managed to avoid Downticks with the bulk of
their selling. Again the trends are counterintuitive.

DT Involvement as Sellers

% of DTs as Sellers

% of All Selling




Broker DTs DT % % Buys
CSUI 518 14.8% 5.4%
VIRT 429 12.3% 2.9%
JPM 381 10.9% 0.6%
COMM 337 9.7% 12.9%
UBS 243 7.0% 9.2%
CITI 230 6.6% 5.2%
INST 193 5.5% 3.3%
GETCO 133 3.8% 1.3%
DMG 120 3.4% 5.2%
ETRD 111 3.2% 4.0%
SOSL 106 3.0% 2.6%
MSDW 100 2.9% 9.3%
GS 98 2.8% 2.6%
MERL 84 2.4% 9.0%
AIEX 81 2.3% 3.0%


0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
DT Involvement as Buyers

% of DTs as Buyers

% of All Buying



CSUI, VIRT and JPM were all associated with high levels of
DT purchases based on comparitively low levels of buying
in the market. The trends are highly suspicious as is MSDW
and MERL buying that has missed out on DT purchases.

Combined, CSUI, UBS, JPM and
VIRT accounted for 33.9 % of all
Downtick trades with only 12 %
of all selling. Yet MSDW
recorded only 16% of DT trades
with 36.4% of all selling, and was
again the genuine seller in the
market. July trading was also
highly suspicious in terms of fair
trading.
Again the prominence by CSUI,
VIRT and JPM in buying cheaper
Downtick trades, is because
algorithms distribute trades
designed to lower prices from
designated sellers to preferred
buyers. The process appears
non-genuine and manipulative.
JULY TRADING, 2013 as M&G SOLD
58

8.4.3.3 AUGUST TRADING 2013: Downtick Sales versus All Selling for the Period August 2 to August 21


















AUGUST TRADING 2013: Downtick Purchases versus All Buying for the Period August 2 to August 21











Broker DTs DT % % Sells
CSUI 536 20.3% 7.4%
COMM 518 19.6% 6.7%
MSDW 381 14.4% 37.0%
JPM 230 8.7% 1.1%
MERL 175 6.6% 2.7%
DMG 135 5.1% 10.1%
UBS 87 3.3% 3.7%
INST 82 3.1% 2.2%
MACQ 80 3.0% 4.9%
VIRT 68 2.6% 1.7%
CITI 53 2.0% 4.7%
ETRD 48 1.8% 2.5%
SOSL 36 1.4% 0.8%
GS 35 1.3% 2.7%
NATO 20 0.8% 0.3%


0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
CSUI ,COMM, JPM and MERL were active in
forcing downward movements from low volumes
of sales, while MSDW who were clearly the most
active selling broker tended to avoid Downticks
with the bulk of their selling.

DT Involvement as Sellers

% of DTs as Sellers

% of All Selling




Broker DTs DT % % Buys
CSUI 425 16.1% 4.2%
COMM 348 13.2% 13.2%
INST 206 7.8% 2.3%
CITI 196 7.4% 7.0%
JPM 148 5.6% 0.3%
VIRT 147 5.6% 1.5%
MERL 143 5.4% 3.6%
MSDW 139 5.3% 10.6%
DMG 98 3.7% 10.6%
GETCO 95 3.6% 1.6%
GS 91 3.4% 3.3%
ETRD 85 3.2% 4.7%
SBAR 75 2.8% 6.7%
UBS 75 2.8% 6.0%
NATO 64 2.4% 1.6%


0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
DT Involvement as Buyers

% of DTs as Buyers

% of All Buying



CSUI, INST, JPM and VIRT are all associated with
high levels of DT purchases based on
comparitively low levels of buying in the
market while MSDW and DMG missed out on
DT purchases with strong levels of buying.
Again the trends are highly counterintuitive.

The large crossing put through the market after the close of trade on August 21 and which completed the M&G selling has
been excluded from the data. It means that the Downtick data is based on volumes related to active trading.
Combined, CSUI, COMM, JPM
and MERL accounted for 55.2 %
of all Downtick trades with only
17.9 % of all selling. Yet MSDW
recorded only 14.4% of DT
trades with 37% of all selling.
August trading is also seen to be
highly dubious.
CSUI, VIRT and JPM were joined
by INST in August in buying
cheaper Downtick trades, at
levels far above what would be
reasonably expected given their
buying profiles.
AUGUST TRADING, 2013 as M&G SOLD
59

8.4.3.4 ALL M&G SELLING: Downtick Sales versus All Selling for the Period June 12 to Aug 21, 2013


















ENTIRE M&G SELL DOWN: Downtick Purchases versus All Buying for the Period June 12 to Aug 21, 2013











Broker DTs DT % % Sells
CSUI 1015 13.0% 4.5%
COMM 889 11.4% 13.6%
VIRT 765 9.8% 2.3%
JPM 670 8.6% 0.4%
CITI 571 7.3% 6.5%
INST 502 6.4% 2.9%
UBS 434 5.5% 6.9%
GETCO 379 4.8% 2.0%
GS 287 3.7% 3.6%
MERL 285 3.6% 6.3%
DMG 277 3.5% 7.4%
MSDW 273 3.5% 8.3%
ETRD 233 3.0% 4.3%
SOSL 181 2.3% 2.4%
AIEX 173 2.2% 3.0%


0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
CSUI, COMM and JPM were the most prominent brokers
in targeting price falls despite comparitively low selling
volumes. The dominant selling by MSDW tended to avoid
Downticks given their high volumes of sales.
DT Involvement as Sellers

% of DTs as Sellers

% of All Selling




Broker DTs DT % % Buys
CSUI 1015 13.0% 3.8%
COMM 889 11.4% 11.4%
VIRT 765 9.8% 2.0%
JPM 670 8.6% 0.3%
CITI 571 7.3% 5.4%
INST 502 6.4% 2.4%
UBS 434 5.5% 5.8%
GETCO 379 4.8% 1.6%
GS 287 3.7% 3.0%
MERL 285 3.6% 5.2%
DMG 277 3.5% 6.2%
MSDW 273 3.5% 23.3%
ETRD 233 3.0% 3.6%
SOSL 181 2.3% 2.0%
AIEX 173 2.2% 2.5%


0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
DT Involvement as Buyers

% of DTs as Buyers

% of All Buying



CSUI, VIRT and JPM all show a high degree of anomalism as do
MSDW, DMG and MERL, but for different reasons
The large crossing put through the market after the close of trade on August 21 has again been removed trading volumes
to ensure that Downtick trends relate to the trading volumes associated with active trading.
Brokers such as CSUI and COMM, each accounting
for similar numbers of DTs to a broker with around
7 times their respective selling volumes, represents
a serious statistical aberration for markets meant
to be genuine and fair.

The anomalous data is highly suggestive of
manipulative forces at work, not genuine selling.
The highly skewed data for DT buying along with
anomalies with DT selling, strongly suggests that
algorithms have directed designated sellers of trades,
designed to lower prices, towards preferred buyers.
Such activity involves collusion and the artificial setting
of prices in short, share price manipulation.

JUNE to AUGUST TRADING as M&G SOLD
60

8.4.3.5 DAILY ANOMALOUS TRADING TRENDS REGARDING DOWNTICK SALES
Anomalous sellers of Downticks are those brokers who have recorded large numbers of DT sales with
comparitively small market shares as sellers. Their trading appears non-genuine as it appears to have
deliberately targeted lower prices. The charts highlights anomalism on a day by day basis for the period
M&G sold their substantial holdings.




























0%
10%
20%
30%
40%
50%
60%
70%
80%
Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jul Jul Jul Jul Jul Jul Jul Jul Jul
13 14 17 18 19 19 20 21 24 24 25 26 27 28 28 28 28 1 2 2 3 4 5 5 8

Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul
9 10 10 11 11 11 12 12 15 16 16 16 17 17 18 18 19 22 22 23 23 24 25 26 27
Daily Selling Downtick Profiles versus Overall Selling Profiles of Leading Brokers June 13 through July 8
Daily Downtick Profiles versus Selling Profiles of Leading Brokers July 8 through July 27

% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling



Each day features high levels of anomalism whether by brokers acting
alone, or brokers acting in concert. Audits are required to establish
who brokers were dealing for with non-genuine trades that appear to
have deliberately targeted lower prices.
61

DAILY DT SELLING ANOMALOUS contd














The charts clearly reveal the extent of daily anomalism accompanying M&Gs selling. The prominent
brokers each day in terms of anomalism (i.e. wide variations between DT profiles and Selling profiles) are
summarized in the table below. Occasionally there were days featuring multiple prominent brokers.
Credit Suisse for example was a prominent broker on 28 occasions out of the 75 most anomalous trading
profiles reviewed. Yet its selling profile across all trading was only 5.8%. It is a remarkable statistic. As is JP
Morgans performance as the prominent seller of Downticks on 15 occasions yet its share of all selling was
a meagre 0.6%. The data points to highly unusual trading activity and selling not motivated to achieve the
best possible returns from shares sold.
The performance of MSDW is equally remarkable in that it hardly featured, with most of its selling tending
to avoid Downticks. Strangely, the broker representing the only genuine and motivated seller in the market
was able to avoid Downticks to a large extent, even though prices collapsed.
Broker Prominence % of All Selling
CSUI 28 times 5.8%
JPM 15 0.6%
COMM 9 7.0%
UBS 5 3.8%
INST 4 2.9%
MERL 3 5.4%
VIRT 3 2.5%
DMG 2 6.1%
MACQ 2 5.3%
MSDW 2 36.0%
CLSA 1 0.1%
TIMR 1 0.2%

Jul Jul Jul Aug Aug Aug Aug Aug AugAug Aug Aug Aug Aug Aug AugAug Aug Aug Aug Aug Aug Aug Aug Aug
30 31 31 2 2 5 5 6 6 7 7 8 8 9 12 13 13 14 15 15 16 19 20 20 21
Daily Selling Downtick Profiles versus Overall Selling Profiles of Leading Brokers July 30 through Aug 21

% of DTs as Sellers

% of All Selling



62

8.4.3.6 DAILY ANOMALOUS TRADING TRENDS REGARDING DOWNTICK PURCHASES
Anomalous buyers of Downticks are those brokers who have recorded large numbers of DT buys with
comparitively small market shares as buyers. Their trading is reflective of trading agendas that are delivered
by algorithms rather than superior luck or skill with trading. To be consistently able to make high levels of
purchases at reduced prices day after day is statistically highly unlikely, at least from a perspective of fair
trading . The charts highlight anomalous DT purchases over the period M&G sold their substantial holding.



























Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jul Jul Jul Ju l Jul Jul Jul Jul Jul Jul Jul
13 14 17 17 19 19 20 25 25 26 27 27 28 28 1 1 3 3 4 5 5 8 8 9 9

Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul
10 10 10 11 11 11 12 15 16 16 17 17 18 18 18 19 22 22 23 23 24 24 25 26 26
Daily Downtick Buying Profiles versus Overall Buying Profiles of Leading Brokers Jun13 through July 9

% of DTs as Buyers

% of All Buying



Daily Downtick Buying Profiles versus Overall Buying Profiles of Leading Brokers July 10 through July 26

% of DTs as Buyers

% of All Buying



63

8.4.3.6 DAILY ANOMALOUS TRADING TRENDS REGARDING DOWNTICK PURCHASES contd














The charts again reveal the extent of daily anomalism accompanying M&Gs selling where prominent
brokers as buyers of DT sell trades are not the ones logically expected (i.e., the brokers with strong buying
profiles). Brokers successful in picking up cheaper trades on a regular basis with only minor levels of
buying in the market are JP Morgan, Credit Suisse and Virtu Financial.
Again, the highly skewed trading data makes little sense in terms of genuine trading activity conducted in a
fair market. It does make sense however from a perspective that brokers were effectively colluding with
their trading through algorithms designed to co-ordinate sales between designated sellers and preferred
buyers. However even though it makes sense, it doesnt excuse share price manipulation which is what it
equates to.
The table summarizes brokers who were able to secure high levels of DT purchases from small buying
profiles in the trading that accompanied M&G sales. Again, some days featured multiple brokers.
Broker Prominence % of All Buying
JPM 24 times 0.4%
CSUI 23 4.5%
VIRT 13 2.3%
INST 6 2.9%
GETCO 3 2.0%
AIEX 1 3.0%
CITI 1 6.5%
ETRD 1 4.3%
MERL 1 6.3%
SOSL 1 2.4%
UBS 1 6.9%


27 27 30 31 31 2 2 5 6 6 6 9 9 12 12 13 14 14 15 15 16 19 20 20 21
July August
Daily Downtick Buying Profiles versus Overall Buying Profiles of Leading Brokers July 27 through Aug 21

% of DTs as Buyers

% of All Buying



Brokers with strong
buying profiles are
generally noticeable
by their absence.
(Refer Section 8.4.2.8)

64

8.4.3.7.1 MORGAN STANLEY (MSDW) SELLING ON BEHALF OF THE M&G GROUP
The chart compares daily sales by MSDW to declared sales by the M&G group.





0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
M
i
l
l
i
o
n
s

0%
10%
20%
30%
40%
50%
60%
70%
Jun
12
Jun
13
Jun
14
Jun
17
Jun
18
Jun
19
Jun
20
Jun
21
Jun
24
Jun
25
Jun
26
Jun
27
Jun
28
Jul
1
Jul
2
Jul
3
Jul
4
Jul
5
Jul
8
Jul
9
Jul
10
Jul
11
Jul
12
Jul
15
Jul
16

% of DTs as Sellers

% of All Selling



Morgan Stanley (MSDW) SELLING FOR M&G - Downtick Sales versus All Selling Profile

M&G Sales

MSDW Selling



Morgan Stanley (MSDW) Selling versus M&G Sales: Jun 12 to Aug 21, 2013

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Jul
17
Jul
18
Jul
19
Jul
22
Jul
23
Jul
24
Jul
25
Jul
26
Jul
27
Jul
30
Jul
31
Aug
2
Aug
5
Aug
6
Aug
7
Aug
8
Aug
9
Aug
12
Aug
13
Aug
14
Aug
15
Aug
16
Aug
19
Aug
20
Aug
21

% of DTs as Sellers

% of All Selling



Jun 12 to July 16, 2013
July 17 to Aug 21, 2013
Morgan Stanley (MSDW) SELLING FOR M&G - Downtick Sales versus All Selling Profile
Again, a paucity of Downticks in
disposing of a major holding.
A paucity of Downticks in
disposing of a major holding.
Morgan Stanley was the active broker for M&G
with most of their selling each day exclusively
for M&G as revealed by the chart.
Jun 12 Jul 1 Aug 1 Aug 21
Highly dubious
selling profiles
29
65

8.4.3.7.2 HISTORICAL TRADING PATTERNS FOR MORGAN STANLEY (MSDW) VERSUS M&G SELLING
The selling by MSDW on behalf of the M&G Group is put into perspective when compared to MSDWs
selling profile established in the five months leading up to the M&G disposals. MSDW was an active seller
of Downticks as mentioned in ASIC Complaint 2013-3 and as shown by the monthly charts below.
















0%
10%
20%
30%
40%
50%
60%
Jan
2
Jan
3
Jan
4
Jan
7
Jan
8
Jan
9
Jan
10
Jan
11
Jan
14
Jan
15
Jan
16
Jan
17
Jan
18
Jan
22
Jan
24
Jan
25
Jan
31

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Feb
1
Feb
4
Feb
5
Feb
6
Feb
7
Feb
8
Feb
12
Feb
13
Feb
14
Feb
15
Feb
18
Feb
19
Feb
20
Feb
21
Feb
22
Feb
25
Feb
26
Feb
27
Feb
28
Morgan Stanley (MSDW) JANUARY 2013 Downtick Selling Profile versus All Selling

% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling



Morgan Stanley (MSDW) FEBRUARY 2013 Downtick Selling Profile versus All Selling

Morgan Stanley (MSDW) MARCH 2013 Downtick Selling Profile versus All Selling

% of DTs as Sellers

% of All Selling



66





The contradiction between MSDWs established selling profile spanning January to May 2013 and their
profile accompanying M&G sales, presents as a conundrum. If genuine selling occurred with M&G disposals
then clearly their historical selling activity was non-genuine, or if the historical activity was somehow
legitimate, then the selling by M&G was unorthodox in the extreme. Of particular relevance is who MSDW
were acting for with their strong attempts to set lower prices in trading from January to May.
The most likely explanation to account for the selling profiles is that that both periods were likely to be
subject to manipulative influences as defined by the High Court. Perhaps trading from January to May was
not designed to achieve the best returns from selling so was therefore non-genuine and manipulative.
Secondly, a large seller being able to avoid Downticks in a market showing daily price declines is likely to be
because of collusion, with other brokers playing a part in taking prices lower. In fact the emboldened short
selling that accompanied M&G disposals identifies strongly with insider knowledge and collusion. Certainly
there is nothing to suggest that any attempt was made to achieve the best returns from the disposal of the
major holding belonging to M&G.
Share price manipulation and trading agendas that have required lower prices, for whatever reason, are the
only plausible explanations to account for widespread trading anomalies.
0%
5%
10%
15%
20%
25%
30%
Apr
2
Apr
3
Apr
4
Apr
5
Apr
8
Apr
9
Apr
10
Apr
11
Apr
12
Apr
15
Apr
16
Apr
17
Apr
18
Apr
19
Apr
22
Apr
23
Apr
24
Apr
26
Apr
29
Apr
30
0%
10%
20%
30%
40%
50%
60%
May
1
May
2
May
3
May
7
May
8
May
13
May
14
May
15
May
16
May
17
May
20
May
21
May
22
May
23
May
24
May
27
May
29
May
30
May
31
Morgan Stanley (MSDW) MAY 2013 Downtick Selling Profile versus All Selling
Morgan Stanley (MSDW) APRIL 2013 Downtick Selling Profile versus All Selling

% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling



67

8.4.3.7.3 MSDW SELLING PROFILES COMPARED Jan to May Trends versus Selling Trends while Acting for M&G
The situation is further put into perspective by comparing all selling by MSDW from January to May with
all of their selling as M&G sold out between June and August 2013.






0%
10%
20%
30%
40%
50%
60%
MORGAN STANLEY (MSDW) Daily Downtick Sells versus Daily Selling Profile - January through May 2013
Generally, MSDW was associated
with high levels of Downtick Sales
that corresponded to reduced
selling profiles
Jan Feb Mar Apr May Jun
Unusually, a large selling
volume but where
Downticks were avoided

% of DTs as Sellers

% of All Selling



Generally, MSDW was
associated with high levels of
selling that has tended to
avoid Downticks in price
% of DTs as Sellers

% of All Selling



The radically different selling profiles of MSDW between the two periods demonstrates the
influence over trading able to be achieved through the fine tuning of HFT algorithms.

Jun 12 Jul 1 Aug 2 Aug 21 2013

MORGAN STANLEY (MSDW) Daily Downtick Sells versus Daily Selling Profile while Selling for M&G
However, non-genuine influences over trading identifies with share price manipulation

Generally, MSDW was
associated with high levels of
selling that tended to avoid
Downticks in price
Period Coinciding with M&G Sales

% of DTs as Sellers

% of All Selling



June 12 to August 21, 2013
January through May 2013
68

8.4.3.8 PROMINENT BROKERS REGARDING DOWNTICK ANOMALISM AS SELLERS





0%
5%
10%
15%
20%
25%
30%
35%
40%
Jun
12
Jun
13
Jun
14
Jun
17
Jun
18
Jun
19
Jun
20
Jun
21
Jun
24
Jun
25
Jun
26
Jun
27
Jun
28
Jul
1
Jul
2
Jul
3
Jul
4
Jul
5
Jul
8
Jul
9
Jul
10
Jul
11
Jul
12
Jul
15
Jul
16
0%
5%
10%
15%
20%
25%
30%
35%
Jul
17
Jul
18
Jul
19
Jul
22
Jul
23
Jul
24
Jul
25
Jul
26
Jul
27
Jul
30
Jul
31
Aug
2
Aug
5
Aug
6
Aug
7
Aug
8
Aug
9
Aug
12
Aug
13
Aug
14
Aug
15
Aug
16
Aug
19
Aug
20
Aug
21



0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Jun
18
Jun
24
Jul
1
Jul
3
Jul
9
Jul
10
Jul
11
Jul
12
Jul
15
Jul
16
Jul
17
Jul
18
Jul
22
Jul
23
Jul
24
Jul
26
Jul
31
Aug
2
Aug
5
Aug
6
Aug
7
Aug
8
Aug
9
Aug
12
Aug
13
Aug
14
Aug
15
Aug
16
Aug
19
Aug
21
JP MORGAN (JPM) Downtick Sell Profile versus All Selling Profile
CREDIT SUISSE (CSUI) Downtick Sell Profile versus All Selling Profile

% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling



29
9
June 18 to Aug 21, 2013
July 17 to Aug 21, 2013
June 12 to July 16, 2013
69

8.4.3.9 OCCASIONAL ANOMALOUS SELLING ACCOMPANYING SELLING BY M&G



0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Jun
12
Jun
13
Jun
14
Jun
17
Jun
18
Jun
19
Jun
20
Jun
24
Jun
25
Jun
26
Jun
27
Jun
28
Jul
1
Jul
2
Jul
3
Jul
4
Jul
5
Jul
8
Jul
9
Jul
10
Jul
11
Jul
12
Jul
15
Jul
16
Jul
17
0%
5%
10%
15%
20%
Jul
18
Jul
19
Jul
22
Jul
23
Jul
24
Jul
25
Jul
26
Jul
27
Jul
30
Jul
31
Aug
2
Aug
5
Aug
6
Aug
7
Aug
8
Aug
9
Aug
12
Aug
14
Aug
15
Aug
16
Aug
19
Aug
20
Aug
21
MERRILL LYNCH (MERL) Downtick Sell Profile versus All Selling Profile


0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Jun
12
Jun
13
Jun
14
Jun
18
Jun
19
Jun
20
Jun
21
Jun
25
Jun
26
Jun
27
Jun
28
Jul
1
Jul
2
Jul
3
Jul
4
Jul
5
Jul
8
Jul
9
Jul
10
Jul
11
Jul
12
Jul
15
Jul
16
Jul
17
Jul
19
0%
5%
10%
15%
20%
25%
30%
35%
40%
Jul
23
Jul
24
Jul
26
Jul
27
Jul
30
Aug
2
Aug
5
Aug
6
Aug
7
Aug
8
Aug
9
Aug
12
Aug
13
Aug
14
Aug
15
Aug
19
Aug
20
Aug
21
UBS SECURITIES (UBS) Downtick Sell Profile versus All Selling Profile

% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling



June 12 to July 19, 2013
July 22 to Aiug 21, 2013
June 12 to July 17, 2013
July 18 to Aiug 21, 2013
Extremely
aggressive selling
Extremely
aggressive selling
70

8.4.3.9 OCCASIONAL ANOMALOUS SELLING ACCOMPANYING SELLING BY M&G contd
































0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Jun
19
Jun
20
Jun
21
Jun
28
Jul
2
Jul
3
Jul
8
Jul
9
Jul
12
Jul
22
Jul
23
Jul
25
Aug
2
Aug
5
Aug
9
Aug
12
Aug
13
Aug
14
Aug
19
INSTINET (INST) Downtick Sell Profile versus All Selling Profile



0%
5%
10%
15%
20%
25%
30%
J
u
l

2
J
u
n

2
6
J
u
n

2
5
J
u
n

1
4
J
u
l

1
1
J
u
n

2
4
J
u
n

1
2
J
u
n

1
7
A
u
g

7
A
u
g

8
A
u
g

9
A
u
g

1
2
A
u
g

1
4
A
u
g

1
5
A
u
g

1
9
A
u
g

2
0
A
u
g

2
1
DEUTSCHE BANK (DMG)
Downtick Sell Profile versus All Selling Profile



0%
5%
10%
15%
20%
25%
30%
J
u
n

1
2
J
u
n

1
3
J
u
n

1
7
J
u
n

1
9
J
u
n

2
0
J
u
n

2
1
J
u
n

2
8
J
u
l

2
J
u
l

3
J
u
l

9
J
u
l

1
0
J
u
l

1
5
J
u
l

2
6
A
u
g

6
A
u
g

9
A
u
g

2
1
CITIGROUP GLOBAL (CITI)
Downtick Sell Profile versus All Selling Profile

% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling



Occasionally aggressive
selling by INST
Occasionally aggressive
selling by DMG
Selling by CITI also tended
to avoid Downticks
Selling that tended
to avoid Downticks
71

8.4.3.10 COMMONWEALTH BANK DOWNTICK TRENDS
The selling profile of Commonwealth Securities (COMM) across the entire period M&G disposed of their
substantial holding (i.e., June 12 to August 21) is provided below. Downtick selling involvement is again
compared to all selling each day. The anomalous Downtick spikes are suggestive of highly dubious trading
activity in that a large impact on pricing levels has been achieved far out of proportion with the amount of
selling supplied to the market. On these days entities within COMM actively targeted lower prices with
non-genuine selling. It is non-genuine as selling in markets that demonstrate integrity is meant to achieve
the best returns possible for sales, not maximum impact regarding the forcing of lower prices.

The days coinciding with anomalous Downtick spikes are summarized below. The table compares COMM
sales each day to the corresponding impact on the register associated with retail sales (i.e., retail client
movements OFF the register). The low proportion of registry movements by retail clients signifies that
sophisticated investors were responsible for the majority of selling that forced Downticks, where such
transactions have been settled elsewhere, not by Commonwealth Securities. It provides a pointer to
manipulative influences within COMM taking place under the camouflage offered by retail clients.











0%
10%
20%
30%
40%
50%
60%

% of DTs as Sellers

% of All Selling




Commonwealth Bank (COMM) Anomalous Downtick Sales
Day
COMM
Sales
Retail Registry
OFF Movements
%
Jul 1 224,090 47,000 21.0%
Jul 2 138,566 28,500 20.6%
Jul 4 182,108 10,640 5.8%
Jul 5 79,257 4,050 5.1%
Jul 25 125,500 24,738 19.7%
Jul 30 144,311 17,511 12.1%
Jul 31 75,706 3,970 5.2%
Aug 1 132,144 10,000 7.6%
Aug 7 197,977 16120 8.1%
Aug 8 192,953 18,928 9.8%
Aug 21 173,534 33,005 19.0%

Low levels of retail selling indicate that institutional
selling is responsible for high levels of DT sales
COMMONWEALTH BANK (COMM) Downtick Sell Profile versus All Selling Profile as M&G Sold
Jun 12 to August 21, 2013
Jun 12 July Aug Aug 21

% of DTs as Sellers

% of All Selling




% of DTs as Sellers

% of All Selling



72

To put matters further into perspective for the period when M&G disposed of their holding, the table
summarizes all Commonwealth Securities retail sell trades as revealed by the register, and the
corresponding sell transactions by COMM as reported by Iress. Retail trades are contrasted as a
percentage of COMM selling.
Low proportions of retail selling are seen to be more of an occasional phenomenon which is to be expected
as retail investors were strong net buyers over the period. However, low levels of retail involvements
(shown highlighted) tend to correspond to the days where anomalous levels of Downtick sales occurred.
Day
COMM
Sales
Retail
Portion
Retail
%
Day
COMM
Sales
Retail
Portion
Retail
%
Day
COMM
Sales
Retail
Portion
Retail
%
Jun-12 19,836 14,600 73.6%

Jul-05 79,257 4,050 5.1%

Jul-30 144,311 17,511 12.1%
Jun-13 22,547 10,810 47.9%

Jul-08 27,532 10,155 36.9%

Jul-31 75,706 3,970 5.2%
Jun-14 17,263 7,750 44.9%

Jul-09 36,387 12,965 35.6%

Aug-01 132,144 10,000 7.6%
Jun-17 14,080 1,250 8.9%

Jul-10 94,219 66,938 71.0%

Aug-02 30,981 6,144 19.8%
Jun-18 146,373 104,800 71.6%

Jul-11 63,602 30,200 47.5%

Aug-05 34,154 16,481 48.3%
Jun-19 68,422 10,013 14.6%

Jul-12 45,929 34,600 75.3%

Aug-06 21,848 3,000 13.7%
Jun-20 51,218 17,804 34.8%

Jul-15 35,758 17,640 49.3%

Aug-07 197,977 16,120 8.1%
Jun-21 24,864 21,658 87.1%

Jul-16 36,639 18,269 49.9%

Aug-08 192,953 18,928 9.8%
Jun-24 71,502 61,286 85.7%

Jul-17 16,475 3,950 24.0%

Aug-09 110,940 47,172 42.5%
Jun-25 112,162 111,445 99.4%

Jul-18 19,930 4,005 20.1%

Aug-12 268,004 95,999 35.8%
Jun-26 30,256 4,500 14.9%

Jul-19 31,691 4,120 13.0%

Aug-13 107,740 47,172 43.8%
Jun-27 26,366 500 1.9%

Jul-22 35,958 9,442 26.3%

Aug-14 172,445 55,050 31.9%
Jun-28 136,069 30,000 22.0%

Jul-23 261,765 41,860 16.0%

Aug-15 49,856 21,470 43.1%
Jul-01 224,090 47,000 21.0%

Jul-24 89,350 74,000 82.8%

Aug-16 66,123 11,230 17.0%
Jul-02 138,566 28,500 20.6%

Jul-25 125,500 24,738 19.7%

Aug-19 147,928 39,390 26.6%
Jul-03 57,063 9,136 16.0%

Jul-26 55,954 10,644 19.0%

Aug-20 47,950 7,700 16.1%
Jul-04 182,108 10,640 5.8%

Jul-29 92,624 22,465 24.3%

Aug-21 173,534 33,005 19.0%
Totals 1,342,785 491,692 Totals 1,148,570 390,041 Totals 1,974,594 450,342


The parcel sizes of COMM Downtick sales further draws attention to institutional influences within COMM
who have targeted lower prices with their selling. Small parcel sizes are the preserve of algorithms used by
institutional investors, not retail investors. Prohibitive transaction costs prevent small retail sales.
Transaction details for the days where anomalous levels of Downticks occurred are analysed below.
COMM selling has been dissected trade by trade so that the proportion of all selling transactions (which
includes DT sales) less than (or equal) to 400 shares can be determined. Large proportions of small
transactions relate to institutional activity. Similarly the number of DT sales for parcels less than or equal to
400 shares has been compared to all DT transactions to again monitor institutional selling that has
impacted prices. Finally, the number of registry movements for parcels less than 400 shares has also been
noted to check for retail activity.





The data overwhelmingly suggests that a
strong institutional presence has been
responsible for anomalous DT trades where
lower prices have been targeted.

Also quite telling is the fact that of all
COMM sales (i.e., 4.5 million shares), retail
share movements only account for 29.8%
of the selling or 1.3 million shares. It again
demonstrates a strong institutional selling
presence within COMM.

On the other hand retailers were strong
buyers of stock through COMM, accounting
for 71.1% of all buying.
Day
Sales for
<=400 shares
Downticks for
<= 400 shares
Register
Sales<=400 shares
July 1 60.1% 68.4% 0
July 2 79.7% 86.3% 0
July 4 80.8% 78.4% 0
July 5 84.9% 90.6% 0
July 22 50.0% 28.6% 2
July 25 88.1% 90.6% 0
July 30 62.2% 74.1% 2
July 31 73.8% 84.1% 1
Aug 1 85.7% 84.5% 0
Aug 8 56.8% 68.6% 1
Aug 20 40.9% 42.9% 0
Aug 21 83.9% 85.5% 0

Total Sales by Commowealth Securities COMM: 4,465,949 shares
Total Retail OFF Movements (i.e. retail sales): 1,335,075 shares
Large numbers of
small (i.e., trades <
400 shares) suggest an
institutional influence
over trading. Large
proportions of DTs
amongst these trades
suggest deliberate
attempts to lower
prices.
73

8.4.3.11 PROMINENT BROKERS REGARDING DOWNTICK ANOMALISM AS BUYERS
The leading brokers in terms of capturing large numbers of Downtick trades from small buying profiles in
the market are brought to attention in the charts below, which span the period while M&G were selling
their substantial holding.
A few brokers proved very successful in being able to purchase trades at reduced prices (i.e., they were the
leading buyers of Downtick selling transactions). The success was due to the actions of algorithms, not luck
or skilful trading. Algorithms are able to link designated sellers of Downticks (as per the charts in Section
8.4.3.8) to preferred buyers as represented in the charts below. How they accomplish it is irrelevant. The
fact they can, and do, is the central issue as it provides control over prices which has led to an artificial
pricing environment - share price manipulation by another name.



















0%
5%
10%
15%
20%
25%
30%
35%
0%
5%
10%
15%
20%
25%
30%
Jun 17 Jul 1 Aug 2 Aug 21

% of DTs as Buyers

% of All Buying




% of DTs as Buyers

% of All Buying



INSTINET (INST) Downtick Buying Profile versus All Buying
JP MORGAN (JPM) Downtick Buying Profile versus All Buying
Jun 12 Jul 2 Aug 2 Aug 21
All Sells Avg. Sell All Buys Avg. Buy Net
374,610 $1.548 264,681 $1.819 -109,929

JPMs success in achieving DT
purchases is extraordinary
given its minor trading profile
over the entire period.

Trading Data
All Sells Avg. Sell All Buys Avg. Buy Net
1,889,401 $1.942 1,872,567 $1.907 -16,834

Trading Data
Marginally
profitable trading?

It comes about because
many of the trades were
often for only 1 or 2 shares
74

























0%
5%
10%
15%
20%
25%
30%
35%
40%
0%
5%
10%
15%
20%
25%
30%
35%

% of DTs as Buyers

% of All Buying




% of DTs as Buyers

% of All Buying



CREDIT SUISSE (CSUI) Downtick Buying Profile versus All Buying
VIRTU FINANCIAL (VIRT) Downtick Buying Profile versus All Buying
Jun 12 Jul 2 Aug 2 Aug 21
Jun 12 Jul 2 Aug 2 Aug 21
All Sells Avg. Sell All Buys Avg. Buy Net
3,801,753 $1.770 2,963,360 $1.852 -838,393

Trading Data
Marginal profit levels
despite all of the trading

Consistently
high levels of
anomalism.

Sells Avg. Sell Buys Avg. Buy Net
1,608,813 $1.896 1,536,240 $1.907 -72,573

Trading Data
High levels of
anomalism

Selling prices are well below buying
prices although the cost of the
additional shares sold is unknown.

75


Section 8.4.4

A DAY BY DAY SUMMARY OF TRADING AS M&G DISPOSED OF THEIR
SUBSTANTIAL HOLDING

JUNE 12, 2013 THROUGH AUGUST 21, 2013

The monthly trading data (Sections 8.3.1, 8.3.2 & 8.3.3) and indeed the 3 monthly trends (Section 8.3.4)
reveal the brokers who have been prominent regarding sales that caused Downticks in price, as well as the
prominent brokers who have facilitated Downtick trades as buyers.
However, a day by day analysis reveals just how biased trading data has really been as the long term data
shows an averaging-out effect because the influence of brokers who have tended to be prominent with
their trading has been rotated from one day to the next.
The charts that follow highlight the distortions present in daily data. They demonstrate how effective
algorithms have been in distributing Downtick sell trades to preferred buyers. By doing so, it demonstrates
collusion between brokers, a high degree of co-ordination and control over pricing levels.
Some of the charts feature JP Morgan as a buyer and as a seller of Downtick trades, however their buying
and selling has been so light, that their market share often doesnt even register on the scale provided. To
be involved in so many Downtick trades as both a seller and as a buyer but with very small buying and
selling volumes demonstrates how aggressive JPM has been in attempting to force prices lower, often
using trades involving only 1 or 2 shares to accomplish price falls.
Fair trading between genuine buyers and genuine sellers, randomly executing their trades in a market that
is able to facilitate fair price discovery, should over time, generally show Downtick involvements
commensurate with the volumes of buying and selling put through the market. The overwhelming feature
of the daily charts is the extent of imbalances. These imbalances effectively translate to artificial pricing
levels that are delivered by high frequency trading algorithms.
Crucially, control over prices, and the setting of artificial prices, equates to share price manipulation that
needs to be addressed in the strongest possible terms, particularly as HFT algorithms are insidiously
working to deliver dubious trading agendas across the entire market.
NOTE:
In the charts that follow attention has been drawn to anomalism where it has occurred, by noting where;
o Downticks recorded by brokers have far exceeded their selling profiles;
o large selling profiles of brokers have been accompanied by surprisingly few Downtick trades;
o the buying of Downtick trades by brokers has far exceeded their buying profiles generally; and
o the strong buying profiles of brokers havent been accompanied by commensurate Downtick
purchases.
76

8.4.4.1 JUNE 2013 CHARTS






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%

0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Jun 13 - DT Involvement as Sellers

Jun 13 - DT Involvement as Buyrs

Jun 12 - DT Involvement as Sellers

Jun 13 - DT Involvement as Buyers

Jun 14 - DT Involvement as Sellers

Jun 14 - DT Involvement as Buyers


% of DTs as Sellers

% of All Selling




% of DTs as Buyers

% of All Buying



Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
77

JUNE 2013 CHARTS contd






























0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Jun 18 - DT Involvement as Sellers

Jun 18 - DT Involvement as Buyrs

Jun 17 - DT Involvement as Sellers

Jun 17 - DT Involvement as Buyers

Jun 19 - DT Involvement as Sellers

Jun 19 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous

% of DTs as Buyers

% of All Buying



Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
Anomalous
78

JUNE 2013 CHARTS contd






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%

0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Jun 21 - DT Involvement as Sellers

Jun 21 - DT Involvement as Buyrs

Jun 20 - DT Involvement as Sellers

Jun 20 - DT Involvement as Buyers

Jun 24 - DT Involvement as Sellers

Jun 24 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly
Anomalous
Anomalous
79

JUNE 2013 CHARTS contd






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Jun 26 - DT Involvement as Sellers

Jun 26 - DT Involvement as Buyrs

Jun 25 - DT Involvement as Sellers

Jun 25 - DT Involvement as Buyers

Jun 27 - DT Involvement as Sellers

Jun 27 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Anomalous
Highly Anomalous
Anomalous
Anomalous
Highly Anomalous
Anomalous
80

JUNE 2013 CHARTS contd











0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Jun 28 - DT Involvement as Sellers

Jun 28 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
81

8.4.4.2 JULY 2013 CHARTS






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
July 3 - DT Involvement as Sellers

July 3 - DT Involvement as Buyrs

July 2 - DT Involvement as Sellers

July 2 - DT Involvement as Buyers

July 4 - DT Involvement as Sellers

July 4 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
82

JULY 2013 CHARTS contd






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
July 8 - DT Involvement as Sellers

July 8 - DT Involvement as Buyers

July 5 - DT Involvement as Sellers

July 5 - DT Involvement as Buyers

July 9 - DT Involvement as Sellers

July 9 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly
Anomalous
Highly Anomalous
83

JULY 2013 CHARTS contd






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
July 11 - DT Involvement as Sellers

July 11 - DT Involvement as Buyers

July 10 - DT Involvement as Sellers

July 10 - DT Involvement as Buyers

July 12 - DT Involvement as Sellers

July 12 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
84

JULY 2013 CHARTS contd






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
10.0%
20.0%
30.0%
40.0%
50.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%

0.0%
5.0%
10.0%
15.0%
20.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
July 16 - DT Involvement as Sellers

July 16 - DT Involvement as Buyers

July 15 - DT Involvement as Sellers

July 15 - DT Involvement as Buyers

July 17 - DT Involvement as Sellers

July 17 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Anomalous
Highly
Anomalous
Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Highly
Anomalous
Highly Anomalous
Highly Anomalous
Highly
Anomalous
85

JULY 2013 CHARTS contd






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%

0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%

0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
v

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
July 19 - DT Involvement as Sellers

July 19 - DT Involvement as Buyers

July 18 - DT Involvement as Sellers

July 18 - DT Involvement as Buyers

July 22 - DT Involvement as Sellers

July 22 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly
Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
86

JULY 2013 CHARTS contd






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
v

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
July 24 - DT Involvement as Sellers

July 24 - DT Involvement as Buyers

July 23 - DT Involvement as Sellers

July 23 - DT Involvement as Buyers

July 25 - DT Involvement as Sellers

July 25 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Anomalous
Highly Anomalous Highly Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Highly Anomalous Highly Anomalous
Anomalous
87

JULY 2013 CHARTS contd






























0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
v
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
July 27 - DT Involvement as Sellers

July 27 - DT Involvement as Buyers

July 26 - DT Involvement as Sellers

July 26 - DT Involvement as Buyers

July 30 - DT Involvement as Sellers

July 30 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous Highly Anomalous
Anomalous
Highly Anomalous
88

JULY 2013 CHARTS contd


















0.0%
5.0%
10.0%
15.0%
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30.0%
35.0%
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v

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
July 31 - DT Involvement as Sellers

July 31 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Highly Anomalous
89

8.4.4.3 AUGUST 2013 CHARTS























0.0%
10.0%
20.0%
30.0%
40.0%
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60.0%

0.0%
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50.0%
60.0%

0.0%
5.0%
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0.0%
5.0%
10.0%
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30.0%
35.0%
40.0%
August 2 - DT Involvement as Sellers

August 2 - DT Involvement as Buyers

August 1 - DT Involvement as Sellers

August 1 - DT Involvement as Buyers


0.0%
5.0%
10.0%
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50.0%
v

0.0%
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20.0%
25.0%
30.0%
35.0%
August 5 - DT Involvement as Sellers

August 5 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Anomalous
Highly anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous Highly Anomalous
Highly Anomalous
90

AUGUST 2013 CHARTS contd


















444











0.0%
5.0%
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15.0%
20.0%
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30.0%
35.0%
40.0%

0.0%
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30.0%
35.0%
40.0%

0.0%
5.0%
10.0%
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20.0%
25.0%
30.0%
35.0%

0.0%
5.0%
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0.0%
5.0%
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12.0%
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18.0%
August 7 - DT Involvement as Sellers

August 7 - DT Involvement as Buyers

August 6 - DT Involvement as Sellers

August 6 - DT Involvement as Buyers

August 8 - DT Involvement as Sellers

August 8 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying



% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Anomalous
Anomalous
Anomalous
Highly Anomalous
Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
91

AUGUST 2013 CHARTS contd






























0.0%
5.0%
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0.0%
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August 12 - DT Involvement as Sellers

August 12 - DT Involvement as Buyers

August 9 - DT Involvement as Sellers

August 9 - DT Involvement as Buyers

August 13 - DT Involvement as Sellers

August 13 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Anomalous
Highly Anomalous
Anomalous Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
Anomalous
Highly Anomalous
Anomalous
92

AUGUST 2013 CHARTS contd






























0.0%
10.0%
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August 16 - DT Involvement as Sellers

August 16 - DT Involvement as Buyers


0.0%
5.0%
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0.0%
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0.0%
5.0%
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August 20 - DT Involvement as Sellers

August 20 - DT Involvement as Buyers

August 19 - DT Involvement as Sellers

August 19 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous Highly anomalous
Anomalous
Anomalous
Highly Anomalous
Highly anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Highly Anomalous
Anomalous
93

AUGUST 2013 CHARTS contd










0.0%
5.0%
10.0%
15.0%
20.0%
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35.0%
40.0%
45.0%

0.0%
5.0%
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August 21 - DT Involvement as Sellers

August 21 - DT Involvement as Buyers


% of DTs as Buyers

% of All Buying




% of DTs as Sellers

% of All Selling



Highly Anomalous
Highly Anomalous
Anomalous
Anomalous
94

8.4.5 APPENDIX 1 ASIC Complaint Concerning Short Selling On August 21, 2013
August 21, 2013
Mr XXXXXXXXXXXXXXXXX
ASIC Analyst
Misconduct and Breach reporting

Dear Sir
Further to my complaint of last Friday (i.e., Aug 16), in which Section 9 pointed out serious anomalies
concerning the system of short selling, I would like to draw your attention to the shorting activity that took
place yesterday (i.e., Aug 21) in relation to CuDeco.
Trading volumes totalled 15,387,060 shares for the day which comprised special crossings of 12,817,058
shares put through after the close of trade.
Of the 2,570,002 shares sold in the course of normal trading, short sales amounted to 1,529,509 shares.
Short sales therefore represented an astonishing 59.5% of all selling transactions.
The short selling is clearly an indication of insider activity, with the entities responsible in all likelihood
knowing that a large crossing was about to hit the market. The situation needs to be followed up on
immediately as the buyers of shares, or their associates, may also have been responsible for the high levels
of shorting. The short selling would have hugely impacted the market and created an artificial trading
environment for all other investors.
Also, the level of short selling yesterday is highly anomalous compared to the levels of short selling on all
other days that M&G sold-down their holding. The accompanying table shows that short sales averaged
19.7% of daily ASX volumes on the days that M&G sold shares with a prior maximum of 38.2% on June 20.
Day ASX Daily Volume Short Sales Shorts % M&G Sell Volumes Shorts cf M&G Sales
Jun 12 532,349 37,306 7.0% 219,186 17.0%
Jun 13 549,328 172,721 31.4% 170,000 101.6%
Jun 14 332,178 68,626 20.7% 120,000 57.2%
Jun 17 459,047 73,588 16.0% 143,648 51.2%
Jun 18 1,272,786 304,144 23.9% 256,352 118.6%
Jun 19 586,348 61,580 10.5% 170,000 36.2%
Jun 20 1,650,125 631,050 38.2% 500,000 126.2%
Jun 21 1,042,183 160,223 15.4% 657,316 24.4%
Jun 24 1,023,391 149,567 14.6% 405,684 36.9%
Jun 25 903,145 275,927 30.6% 240,000 115.0%
Jun 26 547,345 128,071 23.4% 160,000 80.0%
Jun 27 661,315 118,122 17.9% 220,000 53.7%
Jun 28 2,380,102 480,339 20.2% 582,746 82.4%
Jul 1 1,313,567 454,863 34.6% 387,254 117.5%
Jul 2 1,446,141 466,232 32.2% 500,000 93.2%
Jul 3 1,237,856 460,556 37.2% 200,000 230.3%
Jul 4 1,379,944 403,840 29.3% 360,000 112.2%
Jul 5 1,386,629 444,685 32.1% 430,000 103.4%
Jul 8 1,207,318 266,019 22.0% 451,325 58.9%
Jul 9 1,577,061 466,107 29.6% 645,275 72.2%
Jul 10 1,308,447 290,886 22.2% 366,000 79.5%
Jul 11 1,052,577 110,535 10.5% 392,548 28.2%
Jul 12 916,240 70,137 7.7% 297,452 23.6%
95

Day ASX Daily Volume Short Sales Shorts % M&G Sell Volumes Shorts cf M&G Sales
Jul 15 599,902 116,752 19.5% 165,000 70.8%
Jul 16 563,226 26,944 4.8% 281,266 9.6%
Jul 17 625,747 17,192 2.7% 223,734 7.7%
Jul 18 662,798 29,261 4.4% 280,000 10.5%
Jul 19 1,257,549 90,338 7.2% 600,000 15.1%
Jul 22 1,401,576 116,538 8.3% 1,045,717 11.1%
Jul 23 1,564,052 326,251 20.9% 484,283 67.4%
Jul 24 977,215 118,915 12.2% 277,979 42.8%
Jul 25 1,114,901 215,514 19.3% 322,021 66.9%
Jul 26 962,952 217,447 22.6% 310,000 70.1%
Jul 29 1,095,189 197,348 18.0% 324,662 60.8%
Jul 30 856,407 198,016 23.1% 235,338 84.1%
Jul 31 962,904 235,078 24.4% 314,963 74.6%
Aug 1 645,414 159,832 24.8% 185,037 86.4%
Aug 2 806,125 117,102 14.5% 450,000 26.0%
Aug 5 800,068 210,020 26.3% 350,000 60.0%
Aug 6 649,314 180,387 27.8% 200,000 90.2%
Aug 13 2,556,847 421,741 16.5% 905,000 46.6%
Aug 14 2,303,642 278,817 12.1% 745,000 37.4%
Aug 15 1,624,503 393,402 24.2% 311,343 126.4%
Aug 16 1,844,313 251,956 13.7% 522,609 48.2%
Aug 19 1,428,396 162,618 11.4% 239,336 67.9%


A dramatic escalation in short sales to 59.5% of daily volumes yesterday, is seen to be a clear indicator of
entities attempting to capitalize on something taking place behind the scenes; something obviously not
known to the general investing public.
Additionally, high levels of short selling has accompanied nearly all selling by M&G as shown by the column
comparing the levels of daily short sales to the levels of M&G selling. It appears that M&G interests, their
affiliates or even their associates, have been front running the sell-down of the M&G holding. Entities are
likely to have profited by short selling by selling into the market ahead of the M&G selling, with the M&G
selling then providing an opportunity to cover.
Even so, all short sales havent been covered as the open short interest increased by 2,438,979 shares
between June 12 when the M&G selling started, and August 12, (i.e., a period of 2 months). The trend
suggests that insiders were confident that shares would always be available to cover, again suggesting a
compromised, unfair market.
Importantly, the entire sell-down of the substantial holding undertaken by M&G, is contrary to the recent
High court decision in respect of the actions normally associated with genuine sellers.
Refer Appendix 1, Pg 132 of last Fridays complaint
The forces of genuine supply and demand are those which are created in a market by buyers whose
purpose is to acquire at the lowest available price and sellers whose purpose is to sell at the highest
realisable price.
It would appear that the selling was serving purposes other than attempting to obtain maximum value for
the holding, and therefore identifies strongly with share price manipulation as defined by the High Court.
I again seek an urgent resolution to all matters raised including a full investigation into yesterdays highly
dubious trading activity, and indeed, the selling engaged in by M&G over the period June 12 to August 22,
2013.
Average 19.7%
96

8.4.6 APPENDIX 2 Broker Trading Data June 12, 2013 through August 21, 2013
The table summarizes the trading activity of brokers coinciding with M&G disposing their substantial
holding. It includes the large off-market crossing put through the market after the close on August 21.
BROKER CODE SELLS SELL AMOUNT AVG. SELL BUYS BUY AMOUNT AVG, BUY NET
ABN AMRO
Clear
ABNA 437,809 $856,081 $1.955 449,803 $871,295 $1.937 11,994
AIEX AIEX 815,707 $1,565,896 $1.920 1,943,689 $3,692,598 $1.900 1,127,982
Baillieu BAIL 1,750 $4,430 $2.531 213,910 $340,622 $1.592 212,160
BBY BBY 337,539 $605,930 $1.795 671,697 $1,262,486 $1.880 334,158
Bell Potter BELL 143,352 $259,907 $1.813 605,398 $1,017,611 $1.681 462,046
Bridges BRID 0 $0 #DIV/0! 59,161 $107,597 $1.819 59,161
BTIG BTIG 22,746 $51,189 $2.250 315,000 $733,864 $2.330 292,254
Burrell BRLL 6,000 $9,420 $1.570 30,000 $51,750 $1.725 24,000
CITADEL CITADEL 913,600 $1,713,621 $1.876 910,477 $1,717,637 $1.887 -3,123
Citigroup CITI 3,505,150 $6,812,567 $1.944 4,230,512 $8,092,038 $1.913 725,362
CLSA CLSA 80,079 $139,838 $1.746 13,098 $38,087 $2.908 -66,981
CMC Markets CMCS 84,201 $133,288 $1.583 298,286 $598,706 $2.007 214,085
Commonwealth COMM 4,558,817 $8,543,829 $1.874 8,906,103 $17,024,450 $1.912 4,347,286
Credit Suisse CSUI 3,801,753 $6,729,478 $1.770 2,963,360 $5,487,887 $1.852 -838,393
D2MX Pty Ltd D2MX 1,000 $1,660 $1.660 4,000 $6,920 $1.730 3,000
Deutsche DMG 3,986,528 $7,070,132 $1.774 4,834,651 $8,747,800 $1.809 848,123
E-Trade ETRD 1,218,315 $2,185,489 $1.794 2,818,219 $5,212,622 $1.850 1,599,904
Euroz EURO 20,000 $34,850 $1.743 41,428 $77,584 $1.873 21,428
Evans Partner EVAN 9,000 $29,807 $3.312 20,000 $27,997 $1.400 11,000
GETCO Aust GETCO 1,281,967 $2,660,166 $2.075 1,281,967 $2,660,778 $2.076 0
Goldman Sachs GS 2,066,849 $4,130,255 $1.998 2,342,984 $4,744,717 $2.025 276,135
Hartleys HART 25,000 $48,700 $1.948 20,000 $40,000 $2.000 -5,000
Instinet INST 1,889,401 $3,669,528 $1.942 1,872,567 $3,570,515 $1.907 -16,834
Interactive IABL 42,874 $74,183 $1.730 33,120 $57,864 $1.747 -9,754
ITG Aust. ITG 58,967 $169,488 $2.874 54,979 $110,210 $2.005 -3,988
JPMorgan JPM 374,610 $580,010 $1.548 264,681 $481,573 $1.819 -109,929
Lonsec NDAL 0 $0 #DIV/0! 11,900 $20,043 $1.684 11,900
Macquarie
Insto
MACQ 3,495,156 $6,533,636 $1.869 3,615,244 $6,715,342 $1.858 120,088
Macquarie
Retai
MACP 151,124 $282,898 $1.872 1,098,480 $2,364,899 $2.153 947,356
Merrill Lynch MERL 3,512,918 $6,786,998 $1.932 4,104,636 $7,750,627 $1.888 591,718
Morg Smith SBAR 806,636 $1,541,864 $1.911 3,221,215 $6,553,176 $2.034 2,414,579
Morgan Stanley MSDW 36,349,517 $64,270,144 $1.768 18,247,021 $29,401,511 $1.611 -18,000,000
Ord Minnett ORDS 14,875 $27,690 $1.862 199,075 $358,714 $1.802 184,200
Patersons PSL 18,000 $36,290 $2.016 156,700 $323,975 $2.067 138,700
Pershing PERSH 121,890 $234,401 $1.923 256,327 $507,006 $1.978 134,437
Phillip Capital PCAP 0 $0 #DIV/0! 62,251 $126,645 $2.034 62,251
RBS Morgans RBSM 281,972 $547,971 $1.943 347,370 $609,072 $1.753 65,398
RBS Securities RBSA 535,111 $974,434 $1.821 577,348 $1,049,579 $1.818 42,237
Shaw SHAW 1,315 $3,551 $2.700 66,805 $111,631 $1.671 65,490
State One Stock SOSL 986,343 $2,001,550 $2.029 1,541,417 $3,140,218 $2.037 555,074
Susquehanna SUSQ 1,606,466 $2,972,206 $1.850 1,641,316 $3,039,589 $1.852 34,850
Taylor TAYL 50,000 $115,329 $2.307 0 $0 #DIV/0! -50,000
Third Party TPPM 134,107 $224,963 $1.677 292,274 $503,949 $1.724 158,167
Timber Hill Aus TIMR 163,553 $289,241 $1.768 165,480 $295,309 $1.785 1,927
UBS UBS 2,486,318 $4,948,882 $1.990 4,540,334 $8,290,517 $1.826 2,054,016
Virtu Financial VIRT 1,608,813 $3,051,003 $1.896 1,536,240 $2,929,212 $1.907 -72,573
Wealthhub Sec NATO 243,098 $472,840 $1.945 1,177,393 $2,189,772 $1.860 934,295
Wilson WILS 11,790 $25,748 $2.184 204,100 $365,383 $1.790 192,310

BROKER NOMINEE SHARE FLOWS (Market share (%) compares ON & OFF movements against all nominee movements)
Broker OFF ON NET Share% Broker OFF ON NET Share%
Merrill Lynch 6,637,336 8,353,021 1,715,685 43.4%

Morgan Stanley 521,098 512,358 -8,740 3.0%
Credit Suisse 6,068,675 6,564,947 496,272 36.6%

Commonwealth 248,792 176,424 -72,368 1.2%
UBS Securities 1,092,163 1,333,679 241,516 7.0%

BBY Ltd 54,299 54,299 0 0.3%
Macquarie 738,628 707,832 -30,796 4.2%

JP Morgan 25,217 36,741 11,524 0.2%
ABN AMRO 531,738 817,332 285,594 3.9%

Bell Potter 0 50,000 50,000 0.1%

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