Milford to pay $1.5 million
The FMA considers that the trading conduct breached the market manipulation prohibitions in s11B of the Securities Markets Act 1988. The FMA also concluded that the Milford Board failed to ensure that there was the requisite degree of monitoring of the trading activity.
The FMA considers that the conduct had, or was likely to have had, the effect of causing the creation of 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 of those securities.
As Milford is the relevant trader’s employer, the FMA considers that Milford is liable for the trader’s alleged breaches of the Act. Milford denies that it is liable for any alleged breaches. The FMA acknowledges that its conclusions have not been tested in court.
The FMA has reached an agreement with Milford to resolve the issues relating to Milford (but excluding the trader) arising from the investigation, under which Milford has agreed to make payments totalling $1.5 million. Milford also undertakes to complete recommendations made by PwC regarding improvements to its trading systems and controls.
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