The Financial Markets Authority (FMA) has issued a warning to Pacific Edge Limited (Pacific Edge) in relation to alleged breaches of continuous disclosure obligations. Following an investigation by the FMA, it is the FMA’s view that it is likely Pacific Edge contravened NZX Main Board Listing Rule 10.1.1(a) (the Listing Rule) and, accordingly, section 19B of the Securities Markets Act 1988 (the Act). The relevant facts are as follows:
The FMA considers that the execution of the ACPN and FedMed agreements amounted to material information and that consequently Pacific Edge ought to have disclosed the signing of each agreement to the NZX immediately upon execution of the agreements.
The FMA considers that the failure to immediately disclose to the NZX the signing of the agreements with FedMed and ACPN is likely to have contravened the Listing Rule and s19B of the Act. Failure to make the disclosure in a timely way means that shareholders who traded in shares may have done so without having available to them all material information regarding the company and without the market price of the shares when sold reflecting that price impact of that material information.
FMA further considers that any investor that sold Pacific Edge shares after the agreements were signed but before the announcements were made may be eligible for compensation pursuant to the compensation provisions in the Act. Following engagement with the FMA with respect to the matter PEB has:
Having assessed the conduct involved and notwithstanding its conclusion that the Listing Rule and the Act have likely been breached, the FMA has determined that the appropriate and proportionate enforcement response is to accept PEB’s offer to make compensation to affected shareholders and to issue this warning.
Compliance with secondary markets disclosure obligations is a key strategic priority for the FMA and is critical for ensuring that investors are able to participate in a fully informed market.