Insider trading case involving Pushpay shares

Background:

The case, brought by the FMA centred around the resignation and sell-down of shares of former Pushpay co-founder and Director Eliot Crowther in June 2018. The FMA considered Mr Crowther’s intention in this regard to be material information, which, if generally available, would be likely to have a material effect on the price of Pushpay’s shares at the time. The FMA alleged that the individual knew of, and used, that information to advise or encourage others to trade in the lead up to Mr Crowther’s announcement. Mr Crowther’s trading was legitimate, and he was not party to the proceedings.

Pushpay was not party to any FMA proceeding. Pushpay cooperated with the FMA during its inquiries.

Timeline:

November 2023

The individual found guilty of insider conduct in relation to the sale of shares in Pushpay Holdings Limited (NZX:PPH) has been sentenced to six months community detention and must pay a fine of $100,000.

The individual, who has interim name suppression, was found guilty by a jury following a four-week trial at the High Court in Auckland in August.

The Crown submitted that the appropriate final sentence for the offender was in the range of 26.5 to 39.5 months’ imprisonment. The maximum penalty for insider trading is a sentence of five years’ imprisonment and/or a fine of $500,000.

Justice Gault imposed a starting point of 18 months’ imprisonment and a final sentence of six months’ community detention and a $100,000 fine.

August 2023

FMA acknowledges today’s guilty verdict in the criminal trial of an individual accused of insider conduct in relation to the sale of shares in Pushpay Holdings Limited (NZX:PPH).

The individual, who has name suppression, was found guilty by a jury following a four-week trial at the High Court in Auckland.

A second, civil, proceeding involving the guilty individual and another person has been filed in the Auckland High Court.

Both proceedings centre around the resignation and sell-down of shares of former Pushpay co-founder and Director Eliot Crowther in June 2018. The FMA considered Mr Crowther’s intention in this regard to be material information, which, if generally available, would be likely to have a material effect on the price of Pushpay’s shares at the time. The FMA alleged that the individual knew of, and used, that information to advise or encourage others to trade in the lead up to Mr Crowther’s announcement. Mr Crowther’s trading was legitimate, and he was not party to the proceedings.

Pushpay was not party to any FMA proceeding. Pushpay cooperated with the FMA during its inquiries.

February 2022

FMA has filed proceedings against two individuals for alleged insider trading in relation to the sale of shares in Pushpay Holdings Limited (NZX:PPH).

The individuals have been granted interim name suppression until the first court appearance.

One individual faces a criminal charge, filed in the Auckland District Court, and both individuals face civil proceedings, filed in the Auckland High Court.

In June 2018, Pushpay announced co-founder and Director Eliot Crowther had resigned and sold down his shareholding in the firm. The FMA is alleging one individual used this material inside information to advise or encourage another person to trade in the lead up to the market announcement, while the other person was involved in the conduct. Mr Crowther’s trading was legitimate and he is not party to the proceedings.

The matter was referred to the FMA by NZX Surveillance (the frontline regulator of NZX, now called NZ RegCo) in July 2018. NZ RegCo and the FMA work closely together to detect and respond to insider trading on licensed markets.

Pushpay has not been the subject of the FMA’s investigation and it is not a party to any FMA proceeding. Pushpay has cooperated with the FMA during its investigation.