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

 


UPDATE: Brian Henry admits market manipulation charges

UPDATE: Brian Henry admits market manipulation charges, fined $130,000

(Adds Henry comment)

By Jonathan Underhill

Aug. 7 (BusinessDesk) - Brian Henry, a venture capitalist who helped found Diligent Board Member Services, has admitted breaches of the Securities Markets Act by manipulating the company's shares in early 2010.

At the Auckland High Court, Henry admitted his trading in Diligent shares contravened the law. He was fined $130,000.

Henry admitted that on two occasions he executed what are known as ‘wash trades’, where he was both buyer and seller, moving the stock price without any change of ownership. On four other occasions gave "a false or misleading appearance of trading in Diligent shares" by 'layering,' where multiple buy and sell orders are placed without being completed to give the impression of more activity and force up the price.

“The conduct that Mr Henry engaged in undermines the development of a fair, efficient, and transparent financial market," Justice Venning said in his judgment. "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."

The Financial Markets Authority said it was the first case of market manipulation brought in New Zealand.

US-based Henry had said last year that the FMA's case had no merit, while confirming he had made “errors” in trading the shares in early 2010. He was a former chief executive of Diligent, leaving the company in 2009.

In a statement, Henry said he was satisfied the settlement amount reflected the agreed summary of facts, and that he'd never disputed the trading errors. He sought advice from the FMA's predecessor, the Securities Commission, in 2010 about his obligations, and said he wasn't surprised no action was taken at the time.

“However a year ago – three years after the trades - the FMA decided that they had a valid point to make about the integrity of the market, and I respect that," Henry said. “It is disappointing that it has taken four years and extensive legal fees for both parties to get to this point."

In a separate statement, stock market operator welcomed the High Court decision, saying the successful prosecution "reflects the importance NZX places on upholding the integrity of the markets it operates."

The decision comes a day before Diligent is due to report its first-half results and expected to post reported net profit of $5 million, up from $3.3 million a year earlier, according to analysts at First NZ Capital.

Diligent shares rose 2.4 percent to $4.20 and have gained 7.9 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

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