FMA files market manipulation case against Kok Ding Cheng for trading of Rua shares

Media Release 
MR No. 2022 – 47

The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko has filed High Court civil proceedings against Kok Ding Cheng, an experienced retail investor based in Auckland, for alleged market manipulation of NZX-listed shares of Rua Bioscience Limited (RUA). 

The case centres on five small orders for RUA’s shares that Mr Cheng made over a 10-day period during late 2020 via a broking account he held with ASB Securities. The FMA alleges that Mr Cheng’s orders lacked a genuine commercial purpose and were instead made for the purposes of increasing the price and/or demand for RUA shares at a time when he held a material shareholding in the company. 

The FMA’s claim contains five causes of action, each alleging contraventions of the trade-based market manipulation prohibitions in the Financial Markets Conduct Act 2013 (FMC Act). The FMA is seeking a declaration of contravention, a civil pecuniary penalty and costs.  

The proceeding follows an investigation by the FMA after NZ RegCo (NZX’s frontline regulatory agency) referred the conduct to the FMA. NZ RegCo referred the conduct after ASB Securities had earlier reported potential concerns about the orders. NZ RegCo and the FMA work closely together to detect and respond to market manipulation on licensed markets. 

RUA is not a party to the proceeding. The case was filed in the Auckland High Court.