Melbourne man found guilty of lying to ASX

He was caught trying to manipulate ASX IPO requirements. Now he's disqualified from managing corporations for 5 years and $30,000 poorer.

asx company executive with multiple fingers all pointing at him

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A Melbourne man has been convicted of dishonest conduct after he was found manipulating the criteria for companies seeking to be listed on the ASX.

In the first criminal prosecution of this kind, Mark Damion Kawecki of Frankston, Victoria has been banned from managing corporations for five years and fined $30,000.

Under ASX rules, a company must have a minimum number of unrelated shareholders before it can be listed. This "spread requirement" is to demonstrate sufficient investor interest and a basic level of liquidity.

According to the Australian Securities and Investments Commission (ASIC), Kaweki applied for shares in four companies that were attempting an initial public offering (IPO) or a relisting.

ASIC alleged that these applications had false information about the beneficial holder of the stocks or false addresses.

Prosecutors told the court that this dishonesty was to artificially meet the ASX's spread requirement.

Kaweki was charged and pleaded guilty to two counts of dishonest conduct, breaching sections 1041G and 1311(1) of the Corporations Act.

He was a financial adviser at the time of the offences, but back in 2018, ASIC banned him from practising for seven years.

ASIC reminded all parties participating in an IPO or relisting of their obligations to follow both the ASX Listing Rules and the Corporations Act 2001.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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