Who is an ASIC target for market manipulation?

Who is spreading the market rumours sending some company’s share prices plummeting has become the subject of more rumour.

The Australian Securities and Investments Commission has refused to name the companies that it has contacted in its inquiries into possible insider trading and market manipulation, but names are in circulation.

The Australian newspaper reports this morning that up to 10 broking firms – which the newspaper understands to include UBS, Merrill Lynch and Austock – have been issued a “please explain” in regard to the trading of yet undisclosed stocks.

ASIC has summoned the trading records of finance houses, searching for breaches of the Corporations Act.

“ASIC’s inquiries are related to conduct which could involve spreading of false or misleading rumours or predatory trading that could amount to market manipulation or insider trading,” read a statement from ASIC on Tuesday.

The Australian Financial Review reports this morning that rumours have been circulating about the vulnerability of Challenger Financial Services Group, Macquarie Group and Babcock & Brown – 63%a of Babcock and Brown’s issued capital has been traded since 1 January.

The price plunges of other firms have also raised eyebrows among market watchers, including ABC Learning, Primary Health Care, Allco Finance Group and Asciano.