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FMA issues warning on continuous disclosure obligations and secures $500,000 compensation payment from Pacific Edge Limited

Page last updated: 25 May 2015

Media Release
MR No. 2015 – 19
25 May 2015

The Financial Markets Authority (FMA) has concluded its investigation into Pacific Edge Limited regarding potential breaches of its continuous disclosure obligations.

The FMA has concluded that it is likely Pacific Edge contravened NZX Main Board Listing Rule 10.1.1(a) and, accordingly, section 19B of the Securities Markets Act 1988, when it failed to make timely disclosure of material information to the market after it entered into two overseas agreements in October 2013.

As a result of the investigation and following engagement between the FMA and Pacific Edge, the FMA has issued a public warning to Pacific Edge and the NZX listed company will make a compensation payment of $500,000. This payment will be distributed to shareholders who sold shares during the period of delay between signing the agreements and making the announcement to NZX.  The process for payment of compensation is set out in a Settlement Deed which has been agreed between the FMA and Pacific Edge.

As a result of engagement with the FMA, Pacific Edge has also undertaken a compliance audit and has implemented the audit recommendations.

Belinda Moffat, the FMA’s director of enforcement and investigations said the FMA expects listed firms to meet their continuous disclosure obligations and provide key information to the market and shareholders.

“Ensuring that investors have access to information that is up-to-date is a priority for the FMA to help investors make informed decisions,” she said.

“Entities engaged in material transactions must take into account their disclosure obligations when settling the final steps to be taken in the execution of a transaction. The disclosure rules are designed to ensure equal availability of information to the market. This fairness enhances efficiency and confidence in our markets. Working closely with NZX in relation to these market issues is a priority for the FMA.” 

In determining the outcome, we took into account the specific factors of this case including the nature of the conduct, Pacific Edge’s offer of compensation to investors and willingness to undertake the compliance audit, Ms Moffat said.

Details of the payment offer can be found in the Settlement Deed here. As part of the settlement, Pacific Edge may offer investors shares, as an alternative to cash.  The FMA has not endorsed the share offer or the methodology that is to be used and expressly encourages any eligible shareholders to seek independent financial and legal advice regarding the options available in the Pacific Edge offer for compensation payments.

The full warning can be viewed here.


Shae Skellern
09 300 0­465
021 847 192


Warning: Pacific Edge Limited

Case: Pacific Edge Limited - Settlement deed