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

 

Our Fresh Water: Monitoring Report Confirms Serious Challenges For Rivers

• nitrogen levels are getting worse at 55 percent and getting better at 28 percent of monitored river sites across New Zealand • phosphorus levels are getting better at 42 percent and getting worse at 25 percent of monitored river sites across New Zealand More>>

ALSO:

Stats: Wind And Geothermal Emerge As Significant Sources Of Energy

Geothermal’s contribution to New Zealand’s total renewable energy generation increased from 11.5 percent in 2007 to 21 percent in 2015.... The value of wind jumped from $238 million (2 percent of total renewable energy generation) in 2007 to $884 million (6 percent) in 2015. More>>

Errors Found: Electricity Authority Dumps Transmission Pricing Modelling

The Electricity Authority is ditching the cost-benefit analysis at the heart of its controversial attempt to find a new way to divide up costs for the national grid after finding an expanding range of serious computational errors in the work by Australian consultancy Oakley Greenwood. More>>

ALSO:

New Record: Migrant Arrivals At 129,500 A Year

Annual net migration has been steadily increasing since 2012. "This was mainly due to the rising number of migrant arrivals to New Zealand," population statistics senior manager Peter Dolan said. "Fewer migrant departures also contributed to the increase in net migration." More>>

ALSO:

Launched: NASA's Super Pressure Balloon Takes Flight From NZ

NASA successfully launched its football-stadium-sized, heavy-lift super pressure balloon (SPB) from Wanaka, New Zealand, at10:50 a.m. Tuesday, April 25 (6:50 p.m. April 24 in U.S. Eastern Time), on a mission designed to run 100 or more days floating at 110,000 feet (33.5 km) about the globe in the southern hemisphere's mid-latitude band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news