12 Jun through 21 August 203

2
COMMSec Activity Before the M&G Sell Down

The following slides highlight trading by CommSec prior to M&G selling its holding. In each case patterns
of non-genuine selling have been prominent in controlling prices.
CuDeco - 12 Feb 2013 Trading
After an initial price surge at the open, prices retraced. Then Downtick trades by COMM pressured prices
over the remainder of the day. Sell trades by CommSec were in the manner of a non-genuine seller.
410
Price
(Cents) 408

406

404

402

400

398
CommSec Downtick Trades
Price Falls 0
(Cents)

-2
All CommSec Sell Trades by Volume
Volume 16
Thousands

12 Small COMM sell trades pressured

8 prices from the moment that the
algorithm was turned on.
4
0
 3

CuDeco - 12 Feb 2013 Trading cont’d

The small trades by COMM that were generated by their selling algorithm are best viewed with a
truncated scale as shown below. The trades were not programmed to maximize the proceeds of sales.
410
Price
(Cents) 408

406

404

402

400

398 CommSec Downtick Trades

Price Falls 0
(Cents)
-1

-2

Volume
All CommSec Sell Trades by Volume (Truncated Scale)
20
Hundreds

18
16
14 Many of these sell trades by
12 COMM were programmed to
10 cause strategic reductions in price.
8
6
4
2
0

74% of COMM DT trades were for less than $500 in value and averaged just 55 shares in size.
Moreover, 97.4% of DT trades averaged just 86 shares in size.

70%Broker Selling Profiles: 12 February 2013

60%

50%
A strong bias towards
40% non-genuine selling by
CommSec The data shows that the CommSec
30% institutional desk algorithms were
responsible for the majority of price
20%
reductions through patterns of selling that
10% identify with being non-genuine.

0%

% of DT Sales
% of All Selling
 4

CuDeco - 13 Feb 2013 Trading

Trading on 13 Feb 2013 was similar to that of 12 Feb in that a rise at the open was taken down and then
CommSec algorithms kicked in to control prices over the rest of the day.
Price 404
(Cents) 403
402

401

400
399

398
397
CommSec Downtick Trades
Price Falls 0
(Cents)
-0.5

-1

5
Thousands

Volume
4
Many of these sell trades by
3 COMM were programmed to
cause strategic reductions in price.
2
1
0

88% of COMM DT trades were for less than $500 in value and averaged just 61 shares in size.
The averaged value of these trades was just $243.

Broker Selling Profiles: 13 February 2013

60%
A strong bias towards
50% non-genuine selling by
The CommSec institutional desk was mainly
CommSec
responsible for controlling prices in the manner
40%
And also by Morgan
of a non-genuine seller. This control is evident
Stanley (MSDW) from the moment that the COMM algorithm
30%
started generating trades.
20%

10%

0%
% of DT Sales
% of All Selling
 5

CuDeco - 22 Feb 2013 Trading

On 22 February 2013 CommSec algorithms dominated in controlling prices across the entire day’s trading;
firstly by clawing back price rises, and then when prices stabilized, by capping prices up until the close.
Price 390
(Cents) 388
386
384
382
380
378
376
CommSec Downtick Trades
Price Falls 0
(Cents) -1
-2
-3
All CommSec Sell Trades by Volume (Truncated Scale)
Volume 400
350
300
250 Many of these sell trades by
200 COMM were programmed to
cause strategic reductions in price.
150
100
50
0

100% of COMM DT trades were for less than $500 in value and averaged just 3 shares in size.
Moreover, these trades averaged just $4.67 each.

Broker Selling Profiles: 22 February 2013

The data shows that the CommSec
70%
institutional desk algorithms were again
A strong bias towards responsible for the majority of price
60%
non-genuine selling by reductions through patterns of selling that
50% CommSec
identify with being non-genuine.
40%

30%
Their trading shows extreme conflicts with
20% the Corporations Act which bans the creation
and maintenance of artificial prices.
10%

0%
% of DT Sales
% of All Selling
 6

CuDeco - 26 Feb 2013 Trading

CommSec algorithms commenced controlling prices around mid-day leading to a slide in afternoon trade.
After a pause later in the day the algorithm returned towards the close to ensure a lower close.
380
Price 378
(Cents)
376 COMM algorithm active
374
372
370
368
366
364
CommSec Downtick Trades
Price Falls
(Cents) -0.5
-1.5
-2.5
All CommSec Sell Trades by Volume (Truncated Scale)
Volume 2000

1500 Many of these sell trades by

COMM were programmed to
1000 cause strategic reductions in price.

500

86% of COMM DT trades were for less than $500 in value and averaged just 45 shares in size.
Moreover, these trades averaged just $169 each.

Broker Selling Profiles: 26 February 2013 It is counterintuitive that two brokers (UBS and
COMM) who accounted for 22.3% of all selling were
45%
able to generate 75.8% of all trades that resulted in
40% A strong bias towards price reductions…
35% non-genuine selling by
30% both UBS and COMM
… while a broker with 38.9% of all selling (MOELIS) was
25%
only responsible for 10.1% of all Downtick trades.
20%
15%
10%
Imbalances in broker profiles highlight how
5%
algorithmic trades, by continually making artificial
0% adjustments to prices, are able to circumvent the
genuine forces of supply and demand.

The result is an artificial or false pricing

% of DT Sales
environment.
% of All Selling
 7

CuDeco - 20 March 2013 Trading

Despite a series of special crossings at much higher prices, prices drifted after early price rises with
CommSec algorithms ensuring that prices remained capped and closed at the day’s lows.
357
Price Special Crossings
(Cents)
352

347

342

337

332
CommSec Downtick Trades
Price Falls 0
(Cents) -0.5
-1
-1.5
All CommSec Sell Trades by Volume (Truncated Scale)
Volume 2000

1500 Many of these sell trades by

COMM were programmed to
1000 cause strategic reductions in price.

500

65% of COMM DT trades were for less than $500 in value and averaged just 86 shares in size.
Moreover, these trades averaged just $290 each.

Broker Selling Profiles: 20 March 2013

The data shows that the CommSec
35% institutional desk algorithms were again
A strong bias towards responsible for the majority of price
30%
non-genuine selling by
reductions through patterns of selling that
25% CommSec
identify with being non-genuine.
20%

15%

10%

5%

0%
% of DT Sales
% of All Selling
 8

CuDeco - 22 March 2013 Trading

Despite a series of special crossings at much higher prices, prices drifted after early price rises with
CommSec algorithms ensuring that prices remained capped and closed at the day’s lows.
357
Price
(Cents) 353

349

345
Strategic but non-genuine
341
sales which had the effect of
337 capping prices.
333
CommSec Downtick Trades

Price Falls 0
(Cents) -1

-2
All CommSec Sell Trades by Volume (Truncated Scale)
Volume 3000
2500
2000 CommSec selling
1500 appeared only when
1000 prices began to increase.
500
0

69% of COMM DT trades were for less than $500 in value and averaged just 76 shares in size.
Moreover, these trades averaged just $261 each.

Broker Selling Profiles: 22 March 2013

45%
Trading by the CommSec institutional desk
40% A strong bias towards on 22 March 2013 was instrumental in
35%
non-genuine selling by
placing an artificial cap on the share price
CommSec
30% the moment that upward momentum
25% And also by Morgan appeared.
Stanley (MSDW)
20%
15%
10%
5%
0%
% of DT Sales
% of All Selling
 9

CuDeco - 26 March 2013 Trading

CommSec began the day by forcing a sharp fall at the opening then after a pause the algorithm functioned as a
342
non-genuine seller throughout the rest of the day to achieve a close at the day’s lows.
Price 340
(Cents)
338

336

334

332

330
Sharp fall at
328 the opening
CommSec Downtick Trades
Price Falls 0
(Cents) -1
-2
-3
All CommSec Sell Trades by Volume
Volume 5
Thousands

Many of these sell trades by COMM

4 were strategic trades rather than
genuine sales. The trades had the
3 effect of controlling prices.
2

40% of COMM DT trades were for less than $500 in value and averaged just 101 shares in size.
Moreover, these trades averaged just $332 each. Moreover, 92.5% of DT trades averaged just
177 shares in size and reveal algorithmic trades, not retail selling

Broker Selling Profiles: 26 March 2013

60%
A strong bias towards
50% non-genuine selling by
The CommSec institutional desk again
CommSec
40% dominated in setting prices as a non-
genuine seller.
30%

20%

10%

0%
% of DT Sales
% of All Selling
 10

CuDeco – 2 April 2013 Trading

Initial price declines were reinforced as soon as the CommSec algorithm started generating small sell
trades. CommSec’s trading again ensured that prices remained capped and closed at the day’s lows.
349
Price
(Cents)
344

339

334

329
CommSec Downtick Trades
Price Falls
0
(Cents)
-1

-2

All CommSec Sell Trades by Volume

Volume 3000

2500
Many of these sell trades by
2000 COMM were strategic
trades rather than genuine
1500 sales. The trades had the Aggressive selling
effect of controlling prices. at the close.
1000

500

100% of COMM DT trades were for less than $500 in value and averaged just 72 shares in size.
Moreover, these trades averaged just $241 each.

Broker Selling Profiles: 2 April 2013

30%
A strong bias towards
25% non-genuine selling by
CommSec CommSec’s focus on controlling prices
20% is brought to attention by the
aggressive selling at the day’s lows
15% coinciding with the close of trade

10%

5%

0%
% of DT Sales
% of All Selling
 11

Concluding Comments