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FMA Accuses CEO Of Market Manipulation For Anonymous Posts On Investor Forum

The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko – has filed civil High Court proceedings against Matthew Geoffrey Hill, the Chief Executive Officer of 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 Mr Hill allegedly made about the company on the Sharetrader website’s online investor forum.

The FMA claims that between February 2013 and July 2020, Mr Hill made dozens of posts on Sharetrader in a thread about New Talisman under two usernames, “bullish” and “Epithermal”. Mr 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. Mr 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.

Karen Chang, FMA Head of Enforcement, 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 proceedings have been filed in the Auckland High Court and the claim is yet to be served.

The FMA claim is based on two causes of action for alleged market manipulation under the Financial Markets Conduct Act 2013 and the Securities Markets Act 1988 (as some of the posts precede the implementation of the FMC Act in mid-2014) and an alternative cause of action for alleged false or misleading representations (a breach of fair dealing provisions in the FMC Act).

The FMA is seeking from Mr Hill a declaration of contraventions, a pecuniary penalty and costs.

The FMA has information for investors about market manipulation (both information- and trading-based) on its website.

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