Australia's corporate watchdog yesterday confirmed that it has launched an investigation following concerns that listed companies had been hit by short selling and false rumours.
Last week, the Australian Securities and Investments Commission (Asic) and the Australian Securities Exchange, in its role as regulator, issued a joint statementwarning against spreading false or misleading rumours through the market.
"Today, Asic confirmed that its inquiries have now extended to making formal requests for information from a number of market participants about trading in certain securities over the past weeks," it said.
"Asic's inquiries are related to conduct which could involve spreading of false or misleading rumours or predatory trading that could amount to market manipulation or insider trading."
Asic did not identify whom it was questioning or companies that may have been subject to rumour or manipulation.
The commission is also contacting the Securities and Exchange Commission in the United States, the Financial Services Authority in the United Kingdom and the Securities and Futures Commission in Hong Kong for assistance with "any international aspects" of the probe.
In its warning last week, Asic pointed out that the penalty for spreading false rumours was up to A$220,000 ($255,000). "The technique is used by investors who try to profit from the falling price of a stock," Asic said.
Short selling involves borrowing shares and selling for a profit before buying the stock back at a lower price and returning them to the broker.
ABC Learning Centres, Allco Finance Group, and Primary Health Care in its takeover of Symbion Health have been the subjects of reports that they may have been targeted by rumours and short selling.
