The former head of trading technology at the Australian Stock Exchange (ASX) is suing the market operator and its chief executive, alleging he was subject to bullying and passive aggression after raising concerns over the doomed CHESS replacement project.

Jamie Halstead lodged a statement of claim in Federal Court late last month, alleging contraventions of workplace laws including discrimination.

Halstead is suing ASX, current chief executive Helen Lofthouse and general manager of markets technology Farid Sammur, claiming he was bullied and belittled after on several occasions raising concerns that the market operator was in breach of its legal obligations.

It comes after the ASX’s botched attempt to replace the Clearing House Electronic Subregister System (CHESS), which records trades on the stock market, with a blockchain-based solution, which cost $250 million and is now subject to legal action brought by the corporate regulator, and a series of damaging market outages.

Bullying and belittling

Halstead’s statement of claim, seen by the Australian Financial Review, states he repeatedly raised concerns ASX was in breach of the Corporations Act requirement that sufficient resources be allocated to operate the market properly, including around the testing and engineering architecture for the CHESS replacement program.

This included in 2019, when he said he was concerned about the network asset technology, and in late 2020, when he said he was concerned ASX was putting commercial interests before more testing of the CHESS replacement, the statement of claim alleges.

By early 2023, Halstead said he told a superior that he was targeted with a toxic work environment, and that he was being bullied and marginalised by Lofthouse, who was the executive general manager of markets at the time.

“Specifically, Ms Lofthouse was frequently passive aggressive and belittling in her demeanour towards Mr Halstead,” the statement of claim said.

Halstead is also alleging that Lofthouse ignored his concerns that he didn’t have a proper position description or contract matching what his duties were, and that he wasn't receiving adequate bonuses given his performance.

He also raised concerns “on several occasions” that ASX had failed to meet the recommendations from a report aiming to ensure there was not a repeat of market outages in November 2020.

Halstead was one of 100 ASX workers made redundant by the market operator following a company restructure in May this year.

An ASX spokesperson said it was “aware” of the claims made in the court filing.

“ASX considers the claim is without merit and accordingly, we will be vigorously defending the matter,” the ASX spokesperson said.

Checkmate

The CHESS project stems back to the start of 2016, when ASX announced plans to replace the ageing system.

By late 2017, tech firm Digital Asset was engaged to build a blockchain-based ledger and application for the new system, but by March 2020 the planned launch date for the following year was pushed back.

In 2022, Accenture was brought in to review the project and found a number of “significant challenges”.

Later that year, ASX scrapped the project entirely, with $250 million already spent on it.

In August last year, corporate regulator ASIC sued ASX, alleging it had made a number of misleading statements about the CHESS project.

These included statements that the project remained “on track for go-live” at a certain date and that it was “progressing” well, despite this not being the case, ASIC has claimed.

ASIC and the Reserve Bank of Australia also earlier this year sent a letter to ASX accusing it of risking the “stability of Australia’s financial system” and downgrading its official assessment of ASX compliance with risk standards.

It came after a group of trades failed in December 2024 due to bad code in CHESS.

The regulators said this was the result of incorrect logic that had “existed since 2014”, and that there was no backup plan in place if this code failed.

In the letter, the regulators said they were “increasingly concerned and deeply disappointed” at the laxness shown by ASX in remedying problems identified previously.