FMA issued civil proceedings in the High Court against Mark Warminger for alleged market manipulation during his employment at Milford Asset Management Limited. The allegations against Warminger included that he:
- placed small trades directly on the market in one direction, followed by large off-market trades in the opposite direction
- manipulated the closing price
- used his trading orders to move the price, rather than for a genuine commercial purpose.
31 July 2017
Mr Mark Warminger has withdrawn his appeal against the High Court judgment in the Financial Markets Authority v Warminger and as a result the FMA has withdrawn its cross-appeal.
The judgment from March 2017 and penalty decision from June 2017 stand and this brings these civil proceedings to a close.
In the High Court Venning J found that, in relation to two of the causes of action, Mr Warminger had committed market manipulation. The court found he had engaged in conduct which had, or was likely to have had, the effect of causing the creation of a false or misleading appearance, relating 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.
The High Court ordered that Mr Warminger pay a pecuniary penalty of $400,000 for these breaches of the Securities Markets Act 1988. As result of the finding, an automatic five year management ban applies to Mr Warminger.
The penalty judgment notes, “The Court has found it was deliberate conduct by a very experienced market trader in an attempt to take advantage of parties on the other side of the transaction.”
The penalty judgment further adds that the “conduct the court found proved was likely to materially damage the integrity or reputation of New Zealand’s securities markets.”
29 June 2017
The High Court imposed a total penalty of $400,000 on Mark Warminger for two contraventions of the Securities Markets Act 1978.
Venning J found that the starting point for the two contraventions was a penalty of $500,000 and applied a reduction in penalty of $100,000 to recognise Mr Warminger’s personal circumstances.
As a result of the pecuniary penalty order Mr Warminger automatically received a 5-year management ban.
The penalty judgment notes that “the Court has found it was deliberate conduct by a very experienced market trader in an attempt to take advantage of parties on the other side of the transaction.”
18 April 2017 - The FMA filed a cross appeal in the Court of Appeal.
31 March 2017 - Mr Warminger filed an appeal in the Court of Appeal.
3 March 2017 - High court decision was handed down by Venning J.
26 September 2016 - The hearing commenced in the High Court at Auckland and concluded on 20 October 2016. The decision has been reserved.
13 November 2015 - The matter was called at the Auckland High Court and timetabling orders were made.
6 October 2015 - A hearing date has been allocated for this matter in the Auckland High Court on 26 September 2016.
18 September 2015 - The FMA has filed a statement of reply.
7 September 2015 - Mr Warminger has filed a statement of defence.
27 June 2015
FMA has issued civil proceedings in the High Court seeking pecuniary penalties against Mr Mark Warminger for trading carried out while employed by Milford Asset Management Limited (Milford). The trading occurred between December 2013 and August 2014.
Following a thorough investigation, the FMA has reached the view that trading undertaken by Mr Warminger amounted to market manipulation in breach of s11B of the Securities Markets Act.
The FMA alleges the trading falls into the following categories:
- placing small trades directly on market in one direction, followed by large off-market trades in the opposite direction;
- trading that manipulates the closing price; and
- trading conducted in order to set the price, rather than for a genuine commercial purpose.
The FMA alleges that the trading had, or was likely to have had, the effect of causing the creation of a false or misleading appearance relating 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.
