The Financial Markets Authority is accusing Matthew Hill, the CEO of NZX-listed New Talisman Gold Mines of market manipulation via anonymous posts made on an online investor forum.
The regulator has filed civil High Court proceedings against Hill.
Here's the FMA's statement.
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.
Below is a response from New Talisman Gold Mines.
ANNOUNCEMENT BY NEW TALISMAN GOLD MINES LIMITED (ASX, NZX:NTL)
New Talisman Gold Mines Ltd notes the announcement recently by the FMA, and confirm we are not aware of any further details about the FMA’s claim, other than what was contained in the announcement.
This civil claim is now before the courts who will ultimately decide its merits. In the meantime it would be premature for us to prejudge the outcome.
We have previously complained to FMA and Tarawera Publishing Limited, operator of the Sharetrader website, about lack of moderation on the Sharetrader website, contrary to Sharetrader’s own terms and conditions. We remain hopeful that FMA will take appropriate action in respect of our complaints.
We continue to call for online publishers to be regulated, and proactive regulatory guidance to be issued, on the use of social media by investors, issuers, intermediaries, and other market participants and their employees.
The Company does not intend at this stage to make any further comments in relation to this matter.
And here's a statement from the Shareholders' Association.
NZSA SUPPORTS FUTURE GOVERNANCE CHANGES AT NEW TALISMAN MINES
The NZ Shareholders Association (NZSA) has been working with concerned shareholders of New Talisman Mines (NZX: NTL) for some time in relation to the conduct of its CEO, Matthew Hill, the current governance of the company and ongoing performance issues.
This has included a representation to New Talisman Mines that NZSA does not support Matthew Hill remaining on the Board of the company.
We note that today, the Financial Markets Authority (FMA) has filed civil proceedings against Matthew Hill, the CEO of New Talisman Mines, for alleged information-based market manipulation and making false and misleading representations.
This is the first information-based market manipulation proceeding brought by the FMA.
As always, NZSA has been supporting retail shareholders to ensure that their concerns are heard by the NTL Board and to advocate for board changes to support governance improvement. Today’s announcement by the FMA vindicates the position taken by NZSA and the group of concerned shareholders.
NZSA will continue to be instrumental in driving change at NTL, by continuing to work with New Talisman Mines and concerned NTL shareholders.
This is an ongoing process, and we look forward to the upcoming annual shareholders meeting of the company to be held on September 22nd. We intend to communicate more fully with all NTL shareholders prior to the meeting, to highlight governance concerns and the position supported by NZSA.
NZSA offers a free proxy service that allows retail shareholder votes to be counted, including for any upcoming resolutions at the New Talisman Mines shareholder meeting. Contact teresa@nzshareholders.co.nz for further information on this service and the registration process.
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