FMA files civil proceedings against portfolio manager

MR No. 2015 – 33
31 July 2015

FMA files civil proceedings against portfolio manager for alleged market manipulation

The Financial Markets Authority (FMA) has issued civil proceedings in the High Court seeking pecuniary penalties against Mr Mark Warminger for trading carried out while employed by Milford Asset Management Limited (Milford). The trading occurred between December 2013 and August 2014.

Following a thorough investigation, the FMA has reached the view that trading undertaken by Mr Warminger amounted to market manipulation in breach of s11B of the Securities Markets Act.

The FMA alleges the trading falls into the following categories:
· placing small trades directly on market in one direction, followed by large off-market trades in the opposite direction;
· trading that manipulates the closing price; and
· trading conducted in order to set the price, rather than for a genuine commercial purpose.

The FMA alleges that the trading had, or was likely to have had, the effect of causing the creation of a false or misleading appearance relating to the extent of active trading in the relevant securities or the supply of, demand for, price for trading in, or value of those securities.

The FMA’s director of enforcement and investigations, Belinda Moffat said, “the issues raised in this case are of significant importance to New Zealand’s secondary markets and the FMA’s focus on ensuring that our markets are seen as fair and transparent places to do business. We are committed to raising confidence in financial markets and where we see conduct of concern we will take appropriate action.”

As this matter is currently before the court, the FMA is not able to comment further on the details of these proceedings.

The FMA’s investigation commenced after a referral from NZX in August 2014.

ENDS

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