The Financial Markets Authority has filed civil High Court proceedings against Matthew Geoffrey Hill, the chief executive NZX-listed New Talisman Gold Mines Limited (NTL), for alleged information-based market manipulation and making false and misleading representations.
The case relates to anonymous posts Hill allegedly made about the company on the Sharetrader website’s online investor forum.
The FMA claims that between February 2013 and July 2020, Hill made dozens of posts on Sharetrader in a thread about New Talisman under two usernames, “bullish” and “Epithermal”.
Hill, who is also a director and shareholder of New Talisman, did not, at any point, disclose his involvement in the company, the FMA asserts in the claim. Hill’s conduct was revealed in July 2020 when Sharetrader publicly identified him as the person behind the usernames.
The company, New Talisman Gold, is not party to the proceedings. Nor is Sharetrader's owner Tarawera Publishing Ltd.
FMA Head of Enforcement Karen Chang said: “Market manipulation undermines confidence in financial markets, especially if it is by a senior executive at a listed company. We considered Mr Hill’s conduct warranted a strong response to demonstrate that such actions will not be tolerated, and to maintain confidence in New Zealand’s markets.”
“This case is an important reminder that information-based market manipulation can occur on social media and forums, where investors are increasingly gathering to discuss stocks. Investors should be careful when using forums to inform their investing decisions as they can be exploited by vested interests.
“We acknowledge Sharetrader’s efforts to moderate its forum and for bringing this issue to light.”
The FMA is seeking from Hill a declaration of contraventions, a pecuniary penalty and costs.
New Talisman chair, Charbel Nader said in a statement to the NZX that he was not aware of any further details about the FMA’s claim, other than what was contained in the announcement.
“This civil claim is now before the courts who will ultimately decide its merits. In the meantime, it would be premature for us to prejudge the outcome,” he said.
Nader alleged Sharetrader moderation was contrary to the website’s terms and conditions.
“We remain hopeful that FMA will take appropriate action in respect of our complaints,” he said.
Nadar called for online publishers to be regulated and for proactive regulatory guidance to be issued on the use of social media by market participants.
Tarawera Publishing managing director Philip Macalister said Sharetrader enforced robust moderation policies and had acted responsibly in dealing with this matter.
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