Former adviser convicted for dishonest conduct
A former Victorian adviser has been convicted, in what is the first criminal prosecution for attempts at artificially meeting the minimum spread requirement for companies seeking to list on the ASX.
Mark Kawecki from Frankston, Victoria, has been convicted and fined $30,000 in the Melbourne County Court for engaging in dishonest conduct. As a result, he has been disqualified from managing corporations until 4 November 2025.
Under ASX listing rules, the minimum spread requirement specifies a company must hold a minimum number of unrelated shareholders before its shares can be quoted and traded on the ASX, in order to demonstrate sufficient investor interest and ensure adequate liquidity at the time of listing.
Mr Kawecki was charged with, and pleaded guilty to, two counts of dishonest conduct in relation to a financial product in contravention of sections 1041G and 1311(1) of the Corporations Act. It was reportedly the first criminal prosecution for offending of this kind.
ASIC alleged that between 19 January 2015 and 23 December 2016, Mr Kawecki applied for shares in four companies that were undertaking initial public offerings or were in the process of relisting on the ASX, and that the applications for shares in these companies contained false information about the beneficial holder of those shares or false information about the applicant’s address.
The Crown submitted that Mr Kawecki’s conduct was designed to artificially satisfy the minimum spread requirement in the ASX Listing Rules.
The Commonwealth Director of Public Prosecutions prosecuted the matter.
Mr Kawecki was banned from providing financial services for seven years in 2018, following an ASIC investigation into his conduct.
He was charged with dishonest conduct in July last year, before he pleaded guilty to two counts of dishonest conduct in relation to a financial product earlier this year in March.
