The watchdog has banned a former financial advisor from the industry for three years.

Australia’s financial regulator has banned a former wealth advisor from the industry for three years for manipulating warrants, a form of derivative product.

The Australian Securities and Investments Commission imposed the ban on Tony Davidof. An investigation by ASIC found that Davidoff manipulated the price of MINI warrants issued by Credit Suisse, known as MINIs. They are a form of derivative traded on the Australian stock exchange. The underlying instrument of a MINI may be, among other things, a share, a share price index (including the S&P/ASX 200 Share Price Index), a pair of currencies or a commodity. 

On 21 February and 3 June 2013, Davidof took part in back-to-back buy and sell trades in MINIs with a former employee of Credit Suisse after the pair had pre-arranged the price, volume and approximate timing of the trade. On each occasion, in the preceding days, the former employee had traded SPI Futures on behalf of Davidof resulting in a loss (in February) and a profit (in June) for Davidof.

ASX SPI 200 Index Futures (SPI Futures) are a derivative product which tracks the value of the S&P/ASX 200 Index. 

ASIC found that the prices at which Davidof and the former employee arranged to trade MINIs were designed to transfer the profit/loss from all the preceding trading, without reflecting the SPI Futures that were actually traded. This was likely to have the effect of creating an artificial price for trading in the affected MINIs on the exchange, ASIC said in a statement.

Davidof has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision, ASIC said.

Credit Suisse ceased issuing MINIs on ASX in October 2013, the regulator added.