A FORMER Macquarie trader has pleaded guilty to share market manipulation / news.com.au Source: news.com.au

• Trader allegedly inflated company’s share price
• Company eventually collapsed in 2008
• Trader pleads guilty to market manipulation

A FORMER Macquarie Equities senior client adviser is to face the Supreme Court of Victoria for sentencing after pleading guilty to charges of market manipulation.

Newton Chan, of Balwyn in Melbourne’s east, is alleged to have influenced the share price of Bill Express Ltd through hundreds of transaction between May 2006 and March 2008.

Chan pleaded guilty to eight charges of market manipulation contrary to the Corporations Act and one charge of providing false or misleading information to ASIC in the Melbourne Magistrates Court on Friday.

The Australian Securities and Investments Commission (ASIC) alleges Mr Chan used a number of trading accounts held by individuals and entities with Macquarie Equities to buy over 34 million Bill Express shares worth over $6.1 million.

The electronic payments company collapsed in 2008 with $250 million in debt, Fairfax reports.

These transactions created, or were likely to create, an artificial price for the stock, ASIC alleges.

Mr Chan was banned by ASIC in August last year from providing financial services for five years.

He is due to appear for a plea hearing in the Supreme Court of Victoria on June 21.

THE corporate watchdog has obtained orders from the Supreme Court to stop former Macquarie Bank Portfolio Manager Oswyn De Silva from leaving or attempting to leave Australia.

Mr De Silva, 36, a resident of the United Kingdom, was also ordered to surrender his passports to the court, the Australian Securities and Investment Commission said.

ASIC said it applied for the orders as part of its investigation of Mr De Silva’s trading activity between 2006 and 2007.

The watchdog did not specify the nature of the investigation or the alleged offences.

On March 1 of this year Mr De Silva attempted to leave Australia from Perth but was stopped by the Australian Federal Police, ASIC said.

On March 8 Mr De Silva pleaded guilty to a charge of being in contempt of the court’s orders and his sentence hearing has been listed for 15 March 2010.

The restraint orders will continue until Monday 15 March 2010 when the matter returns to court.

news.com.au

Colin Brinsden – The Courier-Mail

Economists say the latest housing data is likely to prompt the RBA to lift its official cash rate / File

• Housing data points to rate rise 
• “Biggest monthly price hike in five years”
• Experts predict rate rise

RISING house prices and improving credit demand could sway the Reserve Bank of Australia to resume lifting its official cash rate at its meeting next Tuesday.

New data released today showed house prices posted their biggest monthly increase in at least five years in January, while consumers appeared to be regaining confidence in taking on credit despite last year’s interest rate rises, The Courier-Mail reports.

The reports came on top of this week’s stronger-than-expected construction and capital expenditure data, upbeat business investment plans for the next 18 months and recent robust labour force data.

Still, pricing on financial markets suggests the rate decision will be a line-ball call as to whether the central bank lifts the cash rate by 25 basis points to 4.0 per cent at its meeting.

“On balance we expect the Reserve Bank to lift rates next week, but we don’t hold the view with supreme confidence,” Commonwealth Securities (CommSec) chief economist Craig James said.

Likewise, JP Morgan chief economist Stephen Walters viewed the decision as “something of a coin toss”.

“Our forecast is that the RBA will leave policy steady on Tuesday although, like that of the market, our level of conviction is low,” Mr Walters said.

“The case for a further rate rise is convincing, but it was even stronger back in February when the RBA bucked unanimous expectations for a fourth straight hike.”

Still, whether or not the there is a rate rise next week, RBA Governor Glenn Stevens has made it clear that there will be further increases this year given that lending rates are still 50 to 100 basis points below their decade average.

Despite the three rate rises in as many months late last year, there was a modest improvement in credit demand in January, RBA data showed.

Total credit rose by 0.4 per cent in the month, double economists’ expectations and the fastest pace of monthly growth in a year.

Demand for housing loans lead the way, rising 0.7 per cent and matching December’s growth despite the end of the government’s increased first home owners grant at the end of last year.

Other personal loans rose by 0.5 per cent, lifting the annual rate to 0.2 per cent, the first positive yearly rate since September 2008.

But business credit growth fell a twelfth consecutive month.

Also released was the RP Data-Rismark Hedonic Australian Home Value Index – Australia’s largest property database – which showed home prices rose by 1.8 per cent in January, the biggest increase in the five-year history of the series.

Home prices were up 11.8 per cent on a year ago, the fastest rate in 22 months, although CommSec’s Mr James pointed out that prices are coming off a low base.

He said the strong gains represent “great news” for homeowners, serving to boost wealth levels and confidence.

“While budding home buyers would prefer prices were a little lower, its clear that they wouldn’t be keen to get in the property market if prices were going backwards.”

By Ilya Gridneff

An Australian banker in Papua New Guinea has escaped conspiracy charges but will be tried for misappropriation in a messy feud with controversial PNG businessman and former politician Peter Yama.

John Maddison, a senior executive of Bank South Pacific (BSP), was charged with 50 counts of conspiracy to defraud and 45 counts of misappropriation in a case that has caused great concern across the business community in PNG.

At a committal hearing in Port Moresby on Wednesday, Magistrate Sinclair Gora said there was “no evidence” of conspiracy and the charges lacked credibility.

Magistrate Gora said, however, there were grounds for Maddison’s misappropriation charges to go to trial.

New Zealand-born lawyer Erik Anderson, whose law firm Gadens Lawyers worked for BSP in their attempts to recoup money they say is owed to them since the early 2000s, also had his conspiracy charges dismissed.

Mr Yama, a former government minister, last December won 7.6 million kina ($A3 million) in a legal battle against a motor vehicle insurance company, but BSP moved to secure the money, claiming Mr Yama had millions in outstanding loans.

Mr Yama, a former police officer and serial litigator, claimed that BSP, their lawyers and two employees tried to defraud him because of a vendetta dating back to 2001.

“I was the main man against the sale of the bank in 2001, I called an inquiry against the bank (now BSP),” he said.

Maddison and his BSP colleague Robin Fleming, also a senior executive, were subsequently arrested then released on bail.

Fleming will face similar charges to Maddison at a later date.

Mr Yama, who denies owing the bank, claimed the two BSP executives and others conspired to defeat the course of justice, charges BSP has rejected as “ridiculous”.

Earlier this month, PNG’s National Court overturned a district court decision to issue arrest warrants for Australian accountant James Kruse, PNG Law Society president Kerenga Kua, Motor Vehicle Insurance Company boss John Mua and BSP company secretary Mary Johns.

All are involved in the ongoing BSP Yama dispute.

There are reports that Mr Yama has used his influence in the judicial system, with police and in politics, and that several people connected to the case have gone into hiding for fear for their lives.

Gadens Lawyers has since stopped representing BSP in the Yama case after several of their junior lawyers were assaulted and threatened outside their Port Moresby homes.

PETER MARTIN

The Reserve Bank has produced the first public estimate of the number of times it expects to raise interest rates in the coming months.

Its governor, Glenn Stevens, told the Parliament’s economics committee yesterday he expects to do it between two and four more times.

Declaring the financial crisis over, and telling the committee it had only ever been a global crisis for six to eight weeks, Mr Stevens said the cash rate had to move away from its ”emergency settings” and increase by 0.5 to 1 percentage points so that consumer and business rates would return to their long-term average, ”which I think is the appropriate place to be”.

Another two to four rises of 0.25 points would add a further $95 to $190 to the monthly cost of servicing a $300,000 mortgage, but would, importantly, leave repayments several hundred dollars below where they were before the crisis began.

The future of rates beyond that would depend on the bank’s assessment of wage and inflationary pressures and the institutions with which borrowers had their accounts.

”We have really had 3½ rate moves so far, or if you are a customer of Westpac, four,” the governor told the committee.

Mr Stevens was relaxed about government debt, saying it was so low that on one reading of proposed new international banking standards Australia did not have enough government debt to sell the banks the safe securities they would need.

Asked to respond to a claim by the Coalition frontbencher Barnaby Joyce that Australia was at risk of defaulting on government debt, he said there were ”few things less likely than Australia defaulting”.

Reminded that Senator Joyce was the shadow finance minister, he said he had ”yet to meet a finance minister who has ever mused any possibility about debt default of his own country”.