A Bell Potter investment adviser yesterday testified at an insider trading trial that stockbrokers told clients about rumours when there were none.
Rocco Tassone admitted brokers claimed to have a source when they did not have one and to be hearing things when they were not.
Under questioning from defence lawyer David Grace, Mr Tassone agreed that brokers were like salesmen and they earned money from brokerage paid by clients.
"Hopefully they make money too," Mr Tassone said. "It is our job to convince people to buy and sell."
He had been called as a prosecution witness in the insider trading trial of former colleague Rob Catena, who had been a mentor of Mr Tassone's at Citigroup.
Mr Catena has pleaded not guilty to 20 insider trading charges, while his client Flemming Nielsen is fighting 13 charges at a joint trial.
The charges relate to trading in the shares in technology company Vision Systems in the four weeks before a takeover bid was launched for the Melbourne-based company on August 14, 2006.
The jury has been played Citigroup tapes in which Mr Catena told clients of rumours of a takeover of Vision. Prosecutors have pointed to Mr Catena saying he had a source, a source and "his mail" as evidence he had more information than was generally available.
Defence lawyers say the accused men had no more information that was known in the market.
After communicating with Mr Catena on July 18, Mr Tassone and a client bought shares in Vision.
Mr Tassone said he was a momentum trader and a spike in the Vision share price and comments made by the company had made him think it was a takeover target.
When the Australian Securities and Investments Commission began an inquiry, Mr Tassone was called by an investigator.
He told her there were rumours about a takeover before the bid was launched. Mr Grace, heading Mr Catena's defence, raised the investigator's notes with Mr Tassone yesterday.
Mr Tassone testified he had not heard of any rumours at the time and he had made the incorrect statements to the female investigator because he initially thought the ASIC call was a practical joke.
He thought the woman had been put up to it by mates. "Lots of jokes go on in broking," Mr Tassone.
When asked how the mates would have known about his email exchanges with Mr Catena on July 18, Mr Tassone said: "I don't know."
He agreed with Mr Grace that he discussed rumours with other brokers. When asked whether a broker could use the word "source" when in fact it was research, Mr Tassone said: "It could be a news article or his own opinion."The trial continues today.
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