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Warminger, FMA withdraw appeals

Mark Warminger has withdrawn his appeal against the High Court judgment that found him guilty of market manipulation, citing health issues and the impact on his career.

Monday, July 31st 2017, 9:52AM

As a result, the FMA has withdrawn its cross-appeal.

In a statement issued by his lawyer, Warminger said: "The FMA and I have agreed to abandon the appeal and cross-appeal filed in the Court of Appeal, the proceedings are now at an end. Whilst I do not agree with the High Court’s decision that in two causes of action (out of ten brought by the FMA), I manipulated the market in certain shares, I must accept the irrevocable impact that the decision has had on any career that I might have continued or pursued in the financial markets. In addition, I face a long recovery from a health issue that makes it sensible to put this matter behind me and allow me to focus on something other than continuing litigation. I will not be making any further comments."

The judgment from March 2017 and penalty decision from June 2017 stand and this brings these civil proceedings to a close.

Justice Venning found that, in relation to two of the causes of action, Warminger had committed market manipulation.

The court found he had engaged in conduct which 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 High Court ordered that Warminger pay a pecuniary penalty of $400,000 for these breaches of the Securities Markets Act 1988.  As a result of the finding, an automatic five-year management ban applies to Warminger.

The penalty judgment notes, “The court has found it was deliberate conduct by a very experienced market trader in an attempt to take advantage of parties on the other side of the transaction.”

The penalty judgment further adds that the “conduct the court found proved was likely to materially damage the integrity or reputation of New Zealand’s securities markets.”

Rob Everett, FMA chief executive, said: “This result demonstrates there are serious consequences for this type of misconduct. Market participants and the public want to know that the law is being upheld, and where there are instances of market manipulation and misconduct, those responsible will be held to account. We are satisfied that our regulatory objectives have been achieved in taking these proceedings. Maintaining and promoting the integrity of New Zealand’s financial markets is a core part of our mandate and we will continue to respond vigorously where we see misconduct.”

The pecuniary penalty of $400,000 imposed on Warminger will go towards the FMA’s costs.

The FMA said it would continue to engage with market participants about the market conduct issues that arose in this case and the lessons that can be taken from it.

 

Tags: conduct FMA Market Manipulation regulation

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