Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZX adviser cuts $10k settlement over dodgy Trade Me deal

NZX adviser cuts $10k settlement over dodgy Trade Me deal, keeps name secret

By Paul McBeth

Dec. 7 (BusinessDesk) - An unnamed adviser at a registered NZX participant firm will pay a $10,000 settlement to the market watchdog after getting found out on a backroom deal to get Trade Me shares when the online auction site was floated last year.

The adviser used a client to get their hands on 1,500 Trade Me shares in the initial public offering, when the stock was sold at $2.70 apiece. The partial float’s structure was unusual because the bookbuild was run before the offer document was registered.

Under NZX rules, employees in a trading participant need sign-off from their boss to buy or sell any listed securities, and aren't allowed to take part in a public offer.

The NZ Markets Disciplinary Tribunal agreed to settle with the adviser, provided they paid $10,000 into the discipline fund, and cover costs incurred by the regulator.

The adviser transferred cash to a client who then bought 1,500 shares in the float worth $4,050, which was then handed back to the adviser in an off-market transfer.

If the adviser had held on to the share parcel, they would have made a paper profit of $2,295 based on Trade Me's current trading price of $4.23, and have received $117 from a first-half dividend. The person could also have looked forward to some $207 in dividends from the next two halves if the auction site meets its forecasts.

Trade Me first listed in December 2011 on the NZX and ASX after Fairfax Media sold down its stake to first 66 percent. It subsequently sold down to 51 percent as it reaped available funds to help shore up its publishing empire. UBS New Zealand was the sole lead manager and underwriter of the float.

The watchdog said the mitigating circumstances for the adviser were that no clients suffered, the breach was a one-off offence, and the adviser owned up early and had already been disciplined by the firm.

The settlement comes as public confidence the country's capital markets has been dented by the investigation into David Ross's Ross Asset Management - a group of funds that have been described as bearing the hallmarks of a Ponzi scheme and putting almost $450 million of investors' cash at risk.

That has put financial advisers back under the microscope, with the Financial Markets Authority taking a look at advisers who recommended their clients join the fund.

The sector has gone through a complete overhaul through the introduction of minimum education and professional standards as policymakers sought to stamp out incompetence and unethical behaviour after several billion dollars of investor wealth was destroyed in the collapse of the country's finance sector.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news