MR No. 2015 – 33
31 July 2015
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:
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.
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On 18 June 2015, the FMA announced its conclusions with respect to Milford Asset Management’s responsibilities in relation to this trading conduct. The FMA concluded that the Milford Board failed to ensure that there was the requisite degree of monitoring of the trading activity. Milford accepted responsibility for the inadequate oversight and control of the trading conduct and its failure to intervene. The FMA also reached the view that Milford is liable for the trader’s alleged breaches of the Act. Milford denies that it is liable for any alleged breaches.
Following completion of the FMA investigation, Milford made a payment in lieu of a penalty of $1.1m, has undertaken to implement changes to its internal systems and controls and has contributed $400,000 to the FMA’s cost of the investigation.