Court report: a market manipulation smoking gun?
Hamish McNicol on the day Fisher & Paykel Healthcare's shares were allegedly manipulated. With special feature audio.
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Hawke’s Bay
Fresh details in the Financial Market Authority’s market manipulation case against Mark Warminger, on extended leave from Milford Asset Management, came to light in the High Court at Auckland last week, specifically focussing on a day’s trading in Fisher & Paykel Healthcare.
The claim against Mr Warminger includes 10 causes of action and is set to go to trial in September but his lawyer, Mike Heron, QC, last week applied for proper particulars in the FMA's pleadings.
In doing so, one of the allegations, specifically relating to trading in FPH shares on May 27, 2014, was aired.
The company had recently announced its annual result, and Mr Warminger went on market to buy shares, which were trading at $4.31, before going off-market to later sell at $4.35.
Mr Heron said this was "entirely legitimate," and in New Zealand, any significant trade will move markets.
But the FMA's lawyer, Justin Smith, QC, then detailed why this was "unquestionably” market manipulation.
Mr Warminger had access to the market through Direct Market Access provided by Macquarie, and learned through two contacts at Forsyth Barr and Goldman Sachs there was interest in acquiring two big share parcels in Fisher & Paykel Healthcare.
He indicated he may be willing to sell at $4.35, four cents higher than they were trading, and in the meantime made a series of small trades.
It was alleged he used Direct Market Access trades to move the bids from $4.31 to $4.34.
"In essence, what he is accused of doing is undertaking the small, on-market trades, for the effect of increasing the price."
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Thu, 02 Jun 2016
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Court report: a market manipulation smoking gun?
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