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

 


Brian Henry admits market manipulation

Media release
MR no. 2014 – 26
7 August 2014

Brian Henry admits market manipulation

Brian Peter Henry has admitted all of the Financial Markets Authority’s (FMA) allegations that he breached the market manipulation prohibitions in the Securities Markets Act 1988. FMA’s claims followed a referral from NZX and arose out of Mr Henry’s trading in shares in the NZX-listed Diligent Board Member Services (Diligent).

At the Auckland High Court Mr Henry admitted his trading contravened section 11B of the Securities Markets Act 1988, and a pecuniary penalty of $130,000 has been imposed by the Court today.

Justice Venning said in his judgment, “The conduct that Mr Henry engaged in undermines the development of a fair, efficient, and transparent financial market. Such market manipulation is likely to undermine the integrity of the NZX and jeopardise the confidence of both overseas and domestic investors in the NZ security markets. A pecuniary penalty is appropriate.”

Mr Henry admitted six breaches of the Securities Markets Act 1988. On two occasions he executed ‘wash trades’, namely trading in Diligent shares with himself, which moved the Diligent share price without any change in the ownership of the shares. He admitted to creating a false or misleading appearance of trading in Diligent shares on four other occasions, by:

• placing multiple orders for buying (bids) and selling (offers) Diligent shares without completing the trade - otherwise known as ‘layering’. This is a practice that artificially inflates the share price and gives a false appearance of activity

• giving an artificial impression of the level of trading interest in Diligent shares

• forcing other buyers to bid at higher prices in order to trade

• setting the market closing price of Diligent shares.

Belinda Moffat, FMA Director of Enforcement, said “misconduct like Mr Henry’s undermines the integrity and trust in the fair and orderly operation of the equities market. The public want and deserve to invest in the markets with confidence that any trading activity reflects genuine supply and demand for shares in the market.”

This is the first case of market manipulation brought in New Zealand. Investigating and responding to misconduct in New Zealand’s secondary markets, whether it be insider trading, market manipulation or disclosure breaches is a priority area of focus for the FMA.

“There is a strong public interest in deterring share trading that is false and misleading. Where there is a case that meets the standard of evidence required and where court action satisfies the public interest, then FMA will take proceedings to ensure confidence in the development of fair, efficient and transparent markets,” said Ms Moffat.

ENDS

BACKGROUND

Section 11B of Securities Markets Act 1988

11B False or misleading appearance of trading, etc

A person must not do, or omit to do, anything if—

(a) the act or omission will have, or is likely to have, the effect of creating, or causing the creation of, a false or misleading appearance—

(i) with respect to the extent of active trading in the securities of a public issuer; or

(ii) with respect to the supply of, demand for, price for trading in, or value of those securities; and

(b) the person knows or ought reasonably to know that the person's act or omission will, or is likely to have, that effect.


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news