tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, March 5th, 6:23PM

Investments

rss
Investment News

FMA issues formal warning for market manipulation

The Financial Markets Authority (FMA) has issued a formal warning to an individual for conduct that was likely to have amounted to market manipulation.

Friday, December 11th 2020, 7:48AM

 

Following an investigation, the FMA concluded that the individual had likely created a false or misleading appearance regarding the demand for, and price of, shares of a listed company, which is a breach of the Financial Markets Conduct Act.

The alleged misconduct occurred in April 2020, with the individual trading on their own behalf via an online trading account. It involved the individual buying a small parcel of shares at a price materially higher than the last traded price, while attempting to sell a larger parcel of the same shares at the higher price.

Trading of this nature is likely to trigger surveillance alerts, which it did in this case, the FMA says in a statement.

The NZX regulatory agency, NZ RegCo, referred the case to the FMA, having been alerted to the activity by the person’s trading account provider as well as by its own surveillance activities.

Nick Kynoch, FMA General Counsel, said market manipulation is a serious breach of the law, even if the volume and value traded is low.

“New Zealand’s market manipulation provisions seek to ensure our equity markets reflect genuine supply and demand, and play a critical role in preserving the integrity of the share market,” he said.

“We know there are many relatively new investors participating in New Zealand’s share market and we want to remind all investors that they are responsible for their own actions. Ignorance of the law is no excuse. All trades must be for legitimate purposes.

“The trading by this individual illustrated conduct that can undermine the integrity and reputation of our markets and have a serious impact on investor confidence. The FMA will continue to investigate and take appropriate action against this type of activity.”

The FMA determined a formal warning was the appropriate and proportionate response, after taking into account the small size and low value of the trade, the individual’s personal circumstances and trading history, the public interest in issuing court proceedings, and that this was a single act of potential misconduct by the individual. The person will not be named.

“Formal warnings are an important part of our regulatory toolbox where we have concerns about particular behaviour. We did not believe the circumstances of this case warranted the use of significant costs, resources and the courts,” Kynoch said.

 

“A warning sends a strong message to this individual and reinforces the provisions set out in the law to investors and the industry.”

 

In some circumstances, market manipulation may amount to a criminal offence and the most serious instances can result in imprisonment (maximum of five years) or a substantial fine ($500,000 for an individual or $2.5 million for a company). This reflects the gravity of the offending and the serious harm that market manipulation can cause.

Tags: Code

« Charge of the lite (advice) brigadeTop 10 investment lessons »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend

Good Returns Investment Centre is brought to you by:

Subscribe Now

Keep up to date with the latest investment news
Subscribe to our newsletter today

Edison Investment Research
  • Georgia Capital
    5 March 2021
    Solid positive revaluations in Q420
    Georgia Capital (GCAP) posted a 27.2% NAV total return (TR) in local currency terms in Q420 on the back of solid valuation uplifts across all key portfolio...
  • Fidelity Japan Trust
    3 March 2021
    Outperformance driven by skilled stock selection
    Fidelity Japan Trust (FJV) targets long-term capital growth, via investment in Japanese companies. Manager Nicholas Price adopts a bottom-up stock -picking...
  • Termination of coverage
    1 March 2021
    Termination of coverage
    Edison Investment Research is terminating coverage on China Water Affairs Group (855), CREALOGIX Group (CLXN), FCR Immobilien (FC9), HarbourVest Global...
© 2021 Edison Investment Research.

View more research papers »

Today's Best Bank Rates
Rabobank 0.75  
Based on a $50,000 deposit
More Rates »
Cash PIE Rates

Cash Funds

Institution Rate 33% 39%
ANZ 0.10    0.10    0.11
ASB Bank 0.05    0.41    0.42
ASB Bank 0.05    0.59    0.56
ASB Bank 0.05    0.61    0.64
ASB Bank 0.08    0.66    0.69
ASB Bank 0.08    0.72    0.75
BNZ 0.10    0.10    0.10
Heartland Bank 0.40    0.40    0.40
Kiwibank 0.05    -    -
Kiwibank 0.25    -    -
Nelson Building Society -    -    -
SBS Bank -    -    -
TSB Bank 0.25    0.25    0.26
Westpac 0.35    0.36    0.38
Westpac 0.05    0.05    0.05
Westpac 0.35    0.36    0.38

Term Funds

Institution Rate 33% 39%
ANZ Term Fund - 90 days 0.35    0.36    0.37
ANZ Term fund - 12 months 0.80    0.82    0.85
ANZ Term Fund - 120 days 0.45    0.46    0.48
ANZ Term fund - 6 months 0.80    0.82    0.85
ANZ Term Fund - 150 days 0.55    0.56    0.59
ANZ Term Fund - 9 months 0.80    0.82    0.85
ANZ Term Fund - 18 months 0.85    0.87    0.91
ANZ Term Fund - 2 years 0.85    0.87    0.91
ANZ Term Fund - 5 years 0.90    0.92    0.96
ASB Bank Term Fund - 90 days 0.35    0.36    0.37
ASB Bank Term Fund - 6 months 0.80    0.82    0.85
ASB Bank Term Fund - 12 months 0.80    0.82    0.85
ASB Bank Term Fund - 18 months 1.00    1.02    1.07
ASB Bank Term Fund - 2 years 1.00    1.02    1.07
ASB Bank Term Fund - 5 years 1.75    1.81    1.89
ASB Bank Term Fund - 9 months 0.80    0.82    0.85
BNZ Term PIE - 120 days 0.45    0.45    0.47
BNZ Term PIE - 150 days 0.55    0.56    0.59
BNZ Term PIE - 5 years 0.90    0.91    0.95
BNZ Term PIE - 2 years 0.85    0.87    0.91
BNZ Term PIE - 18 months 0.80    0.82    0.85
BNZ Term PIE - 12 months 0.80    0.82    0.85
BNZ Term PIE - 9 months 0.80    0.82    0.85
BNZ Term PIE - 6 months 0.80    0.82    0.85
BNZ Term PIE - 90 days 0.35    0.35    0.37
Co-operative Bank PIE Term Fund - 6 months -    -    -
Heartland Bank Term Deposit PIE - 12 months 1.00    1.02    1.07
Heartland Bank Term Deposit PIE - 6 months 0.90    0.92    0.96
Heartland Bank Term Deposit PIE - 9 months 0.90    0.92    0.96
Heartland Bank Term Deposit PIE - 18 months 0.95    0.97    1.02
Heartland Bank Term Deposit PIE - 2 years 1.00    1.02    1.07
Heartland Bank Term Deposit PIE - 5 years 1.00    1.02    1.07
Kiwibank Term Deposit Fund - 90 days 0.35    0.36    0.37
Kiwibank Term Deposit Fund - 6 months 0.90    0.91    0.95
Kiwibank Term Deposit Fund - 12 months 1.00    1.02    1.07
Kiwibank Term Deposit Fund - 150 days 0.60    0.61    0.64
Kiwibank Term Deposit Fund - 120 days 0.45    0.46    0.47
Kiwibank Term Deposit Fund - 9 months 0.80    0.82    0.85
Westpac Term PIE Fund - 150 days 0.55    0.56    0.59
Westpac Term PIE Fund - 120 days 0.45    0.46    0.47
Westpac Term PIE Fund - 18 months 0.80    0.81    0.84
Westpac Term PIE Fund - 12 months 0.80    0.81    0.84
Westpac Term PIE Fund - 6 months 0.80    0.81    0.84
Westpac Term PIE Fund - 9 months 0.80    0.81    0.84
Westpac Term PIE Fund - 90 days 0.35    0.36    0.37
Westpac Term PIE Fund - 2 years 0.85    0.87    0.91
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com