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FMA takes action against Milford trader

The FMA has issued civil proceedings in the High Court against Milford Asset Management portfolio manager Mark Warminger.

Friday, July 31st 2015, 12:52PM 1 Comment

It comes after the FMA reached a $1.5 million settlement with Milford over breaches of market manipulation provisions.

At the time, the FMA said trading by one of Milford's staff had broken the rules and the Milford board had insufficient monitoring of activity. It said it was still conducting enforcement activity with the person in question.

Today, it announced the action against Warminger for trading between December 2013 and august 2014.

It said: "Following a thorough investigation, the FMA has reached the view that trading undertaken by 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.

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.”

In a release, counsel acting for Warminger, Marc Collett, said he denied the accusation."When the facts are traversed in court the public will be able to draw its own conclusions on both the FMA and this particular claim. The fact that the FMA asserts something does not of course make it so and we fully expect that fair-minded people will wait until the court process is complete before drawing any conclusions about Mr Warminger’s trading. With regard to the categories of trading activity specified in the FMA’s news release today, it should be noted that it is a matter for interpretation, firstly whether the activity was as suggested; and secondly whether, even if that were so, (which is denied) it would constitute market manipulation."

 

 

Tags: FMA Milford Asset Management

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Comments from our readers

On 31 July 2015 at 2:36 pm Brent Sheather said:
Goodness me, if the FMA are going to prosecute for “trading that manipulates the closing price” and “trading conducted in order to set the price” then half the fund managers and stockbrokers in NZ will be getting a letter from the FMA.

Regards
Brent

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