Jarden hit with $40k penalty
In June last year, one of Jarden’s customers with direct market access (DMA) made a series of trades using an algorithm that contributed to pushing down Mainfreight’s price 9.8% in the space of 40 minutes. The order was a mistake and would’ve been picked up had one of Jarden’s filters been activated. However, the company had turned it off a year earlier to address an issue and hadn't realised it failed to turn it back on.
“Jarden had also not conducted regular reviews of its DMA filters as part of its compliance monitoring programme, despite NZ RegCo previously highlighting the need for Jarden to specifically monitor key areas including DMA in its onsite inspection reports of 2018 and 2019,” the markets disciplinary tribunal said.
Algorithmic trading and direct market access for clients have caught out broking houses in the past. In 2019, Macquarie Securities was censured for failing to discover one of its direct market access customers made more than 100 algorithmic trades over 10 months without a change in ownership, and in 2018 Craigs Investment Partners was censured for a similar lapse.
In 2015, Jarden – then called First NZ Capital – was censured for trying to fix a trading error without telling the market operator when an order stopped by a DMA filter was mistakenly put through manually.
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