Home News 2013 Penny Stock Crash

Wash-trading of BAL shares prevalent in months leading up to crash: expert witness

The Edge Singapore
The Edge Singapore5/7/2021 7:0 AM GMT+08  • 10 min read
Wash-trading of BAL shares prevalent in months leading up to crash: expert witness
Expert witnesses take the stand in John Soh's trial, give evidence showing BAL stocks could have been manipulated before big crash
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Expert witnesses testifying on behalf of the prosecution told the court there were signs that the trading of the three penny stocks was subjected to manipulation and that the prices they were trading at just before the crash of October 2013 were as much as more than 3,000% overvalued.

“If a market is not fair, it can be rigged and if that happens, people will shy away from the market,” said Australia-based Michael Aitken, who was engaged by the Monetary Authority of Singapore (MAS) in September 2016 to analyse the trading pattern of Blumont Group, Asiasons Capital and LionGold Corp shares before the crash.

“And if investors shy away from the market, then effectively you have lower liquidity that, in turn, leads to higher transaction costs for investors and higher cost of capital for companies. So, it is very important that markets are fair,” said Aitken, founder and chief financial architect of the market-trading surveillance system, SMARTS, which is used by bourses such as Nasdaq and the Singapore Exchange. He was previously CEO and chief scientist at the Capital Markets Cooperative Research Centre but has retired from that job and is now working three days a week at Macquarie University.

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