01 May 2025

Experienced retail investor found liable for market manipulation

Media Release  
MR No. 2025 – 13

Kok Ding Cheng, an experienced retail investor, has been ordered to pay the Crown a pecuniary penalty of $198,000, following a civil proceeding brought by the Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko for market manipulation.  

The FMA’s case centred on five small orders for of NZX-listed shares of Rua Bioscience Limited (RUA) that Mr Cheng made over a 10-day period during late 2020 via a broking account he held with ASB Securities.  The Court found in making each of those five orders, which ranged from $59 to $540, Mr Cheng breached s265 of the Financial Markets Conduct Act 2013 which prohibits trade-based market manipulation.  The Court found that Mr Cheng deliberately placed the orders for the purpose of increasing the price and/or demand for Rua shares.

Mr Cheng did not file a statement of defence during the proceeding, and so the proceeding progressed by way of formal proof hearing.  

FMA Head of Enforcement, Margot Gatland said, “Mr Cheng’s orders lacked a genuine commercial purpose and were instead made for the purposes of increasing the price and/or demand for RUA shares at a time when he held a material shareholding in the company.  

“Market manipulation undermines confidence in financial markets because it means investors can’t trust prices or market activity to be genuine. We take cases of market manipulation seriously to ensure New Zealand’s markets reflect genuine supply and demand, in order to preserve their integrity and reputation.

“We considered Mr Cheng's conduct warranted a strong response to deter market manipulation. This case and the Judge’s ruling are important reminders that trade-based market manipulation can occur when trading through online share brokerage accounts. Investors should be careful to understand their obligations when trading online, as trading listed shares for disingenuous reasons can result in liability.” 

The $198,000 is to be paid to the Crown after it is first applied to the FMA’s actual costs in taking the case. 

ENDS 

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Related links  

FMA vs Cheng Judgment [PDF 415KB]

FMA files market manipulation case against Kok Ding Cheng for trading of Rua shares