The Ontario Securities Commission (OSC) is accusing an offshore day trading shop with failing to prevent market manipulation by some of its traders.
The OSC will hold a hearing on Dec. 14 to consider a possible settlement agreement with Zhen (Steven) Pang and his firm, Hamilton, Ont.-based Oasis World Trading Inc., which stands accused of failing to prevent abusive trading tactics, such as intraday “spoofing” by its team of day traders in China. The terms of the settlement will only be revealed if the OSC approves the deal after a hearing.
According to the OSC’s allegations, Oasis hosts approximately 200 day traders at 40 branch offices in China who breached securities laws by engaging in “at least 460 instances” of manipulative trading on Canadian securities markets between November 2013 and December 2014.
“The orders entered by these traders created a false or misleading appearance of market activity which allowed them to trade at artificial prices,” the OSC alleges.
Pang did not know about the manipulative trading, the OSC says, but he nevertheless “ought to have known.” The OSC says that Pang worked with JitneyTrade Inc., which provides Oasis with direct electronic access to the markets, to identify and sanction any manipulative trading — but the OSC says he should have done more.
The OSC alleges that Pang “failed to adequately monitor trading activities at Oasis and ensure there was an adequate compliance structure in place to identify and prevent possible manipulative trading.”
In addition, the OSC says that Pang’s ultimately responsible for Oasis’ compliance with Ontario securities law.