09 February 2022

FMA files court proceedings alleging insider trading relating to the sale of Pushpay shares

Media Release
MR No. 2021 – 4

The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko has filed proceedings against two individuals for alleged insider trading in relation to the sale of shares in Pushpay Holdings Limited (NZX:PPH).

The individuals have been granted interim name suppression until the first court appearance.

One individual faces a criminal charge, filed in the Auckland District Court, and both individuals face civil proceedings, filed in the Auckland High Court.

In June 2018, Pushpay announced co-founder and Director Eliot Crowther had resigned and sold down his shareholding in the firm. The FMA is alleging one individual used this material inside information to advise or encourage another person to trade in the lead up to the market announcement, while the other person was involved in the conduct. Mr Crowther’s trading was legitimate and he is not party to the proceedings.

The matter was referred to the FMA by NZX Surveillance (the frontline regulator of NZX, now called NZ RegCo) in July 2018. NZ RegCo and the FMA work closely together to detect and respond to insider trading on licensed markets. 

Pushpay has not been the subject of the FMA’s investigation and it is not a party to any FMA proceeding. Pushpay has cooperated with the FMA during its investigation.

About insider trading
Sections 240 - 243 of the Financial Markets Conduct (FMC) Act prohibit people who hold material information about an issuer that is not generally available to the market (inside information) from trading with that information, disclosing it in certain circumstances, and advising or encouraging other individuals to trade the issuer’s shares.

Unethical trading activity can undermine market integrity and erode investor confidence at a fundamental level. Participants in financial markets must operate on the basis that all trades are legitimate and based on equally available information.

The FMA considers it critical to uphold the law in this area to maintain investor confidence, but also to maintain credibility for those market participants who are willing compliers.

Criminal insider trading can be punishable with up a term of imprisonment not exceeding five years, a fine not exceeding $500,000, or both for individuals. Civil penalties can include a pecuniary penalty not exceeding the greatest of the consideration for the relevant transaction, three times the amount of the gain made or the loss avoided, and $1 million in the case of an individual or $5 million in any other case.

Insider trading can impact the market as a whole but the FMA notes there may be specific people who have a right to seek compensation in some cases. Civil proceedings can result in a declaration of contravention, which allows aggrieved persons who have suffered, or are likely to suffer, loss or damage because of the contravention to apply to the court for a compensatory order under sections 494 and 495 of the FMC Act.


See FMA Investor Resources: Insider Trading

Media contacts:

Andrew Park
FMA Media Relations Manager
[email protected]
021 220 6770

Campbell Gibson
FMA Senior Adviser, Media Relations
[email protected]
021 945 323