The Financial Markets Authority (FMA) has fined Milford Asset Management $1.5 million, following its investigation into a trading conduct breach by one of its "traders" between December 2013 and August 2014.
The conduct has, or had the potential to create a “false or misleading appearance with respect to the extent of active trading in the relevant securities; or the supply of, demand for, price for trading in, or value or those securities”.
While the FMA is yet to announce what will happen to the trader, it says
However the FMA says
The FMA is still working through “enforcement processes” regarding the trader, and clarifies the $1.5 million fine doesn’t include the trader.
"The FMA’s enforcement processes regarding the trader are continuing and the FMA is unable to comment further on these specific matters."
FMA not investigating effects of breach
The FMA said its investigation did not relate to the security of
Addressing media over a conference call, FMA chief executive Rob Everett said: “In market manipulation cases, generally speaking, what the regulators are looking to respond to is the damage to the broad integrity of the market; confidence among people trading, that they know they’re trading to a true price and not one that’s been manipulated.
“[Gains or losses are] generally difficult to assess – particularly over a broad number of trades, or long period of activity.
“We have not gone down that route - and don’t propose to - of trying to assess whether there are gains or losses in particular areas in this case.”
FMA publicly cracking the whip
“I believe it’s probably the most sizable one [settlement] that we’ve issued of this nature, but again we’re relatively early into a regulatory framework where these sorts of settlement amounts are going to become more frequent.
“When put against some of the compensation payments we’ve secured in the finance company cases, obviously it looks quite different.”
He said this settlement “reflects our wish to make sure that people know we’re here, and that people know we’re watching, and that we will respond even if it takes a significant, lengthy and expensive investigation to do so”.
“I’m not going to discuss any dialogue we’re having elsewhere in the industry.”
He would not say whether the trader involved was still employed by
He said the review referenced in the settlement agreement had been initiated by
“As a result we have upgraded our trading activities, including the introduction of centralised dealing and the imminent implementation of a globally recognised investment management system.
“We believe this will move