Another Perth investment industry player has raised doubts at an insider trading trial about the credibility of sources cited by stockbrokers as they drum up business.
Corporate adviser Simon McDonald said stockbrokers were driven by turnover and brokerage, and were known to find sources of information that sometimes lacked credibility.
Mr McDonald, a former investment manager with Lehman Brothers and Merrill Lynch in London, said brokers tended to give tips from such sources to share traders. "Professional investors are known to ignore such things," he said.
He made the comments on Friday while testifying at the Supreme Court trial of former Citigroup stockbroker Robert Catena, who is fighting 20 charges of insider trading.
Mr Catena's client Flemming Nielsen, a keen share trader, has pleaded not guilty to 13 insider trading charges over his purchases of shares in diagnostic technology company Vision Systems.
The jury has been played tapes of Mr Catena telling clients, including Dr Nielsen, of takeover rumours up to four weeks before a bid for Vision was launched on August 14, 2006.
Prosecutors pointed to Mr Catena saying he had a contact, a source and "his mail".
Defence lawyers say the men knew no more than was discernible from publicly available information, including broker reports.
Under cross-examination by defence lawyer David Grace last week, a prosecution witness conceded brokers spoke of rumours when there might not be a rumour and claimed to have a source when there might not be one.
Bell Potter adviser Rocco Tassone agreed a source might not be a person but research, a news article or the broker's opinion. Mr Tassone agreed brokers were salesman. "It is our job to convince people to buy and sell," he said.
As the first witness in Mr Catena's defence case on Friday, Mr McDonald, described Mr Catena as having integrity and an excellent character.
Mr Grace asked Mr McDonald whether he was familiar with stockbrokers using the word "source".
Mr McDonald raised his doubts about broker sources and said information that did not have credibility was important to traders.
When asked by prosecutor Sam Vandongen whether Mr Catena was the sort of person to lie to a client about the existence of a contact or source, Mr McDonald said the broker had acted in an honest and professional manner in all dealings. "He is an honest person, I would not say he would lie," Mr McDonald said.The trial continues today.
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