A former Milford Asset Management portfolio manager has dropped his appeal against market manipulation charges and will pay a $400,000 penalty.
In March, Mark Warminger was found guilty of market manipulation in two instances, while eight other claims against him were dismissed.
The Financial Markets Authority (FMA) alleged trading between December, 2013, and August, 2014, breached the Securities Markets Act, which amounted to market manipulation.
There were 10 causes of action against Warminger, made up of trading which is alleged to have, or was likely to have, created a false or misleading appearance of trading in a security.
* Mark Warminger penalised $400,000 for market manipulation
* Former Milford trader manipulated the market twice
* Milford Asset Management manager was ‘under pressure’ – FMA
* FMA sues former Milford Asset Management portfolio manager
* Milford Asset Management’s Anthony Quirk resigns as managing director
* Record $1.5m settlement
Warminger’s trial took place over many weeks last year, and in March Justice Geoffrey Venning found Warminger did manipulate the market twice, when trading in shares of Fisher & Paykel Healthcare and A2 Milk.
The maximum possible penalty was $1 million a trade but in June, a total penalty of $400,000 was imposed for the manipulation, as well as an automatic five-year ban from management.
Warminger had appealed the finding of market manipulation against him, and the FMA had cross-appealed.
On Monday, however, the FMA said Warminger had withdrawn his appeal, and as a result the FMA had withdrawn its cross-appeal.
This brought the legal proceedings to an end, and meant the initial finding, as well as the $400,000 penalty, stood.
It was the country’s first market manipulation case to go to trial.
Warminger’s $400,000 penalty would go towards the FMA’s costs in the proceedings.
FMA chief executive Rob Everett said the outcome showed there were serious consequences for this type conduct.
“Market participants and the public want to know that the law is being upheld, and where there are instances of market manipulation and misconduct, those responsible will be held to account.
“We are satisfied that our regulatory objectives have been achieved in taking these proceedings.”
The FMA said it would continue to engage with market participants about the issues which arose in this case and what lessons could be learned.
Warminger was named as the trader at the centre of a high-profile Financial Markets Authority investigation in July, 2015.
Justice Venning’s penalty judgment said the finding had had a major impact on Warminger, whose entire working life of nearly 20 years was in the financial sector.
This was likely to always be the situation in these cases, but Warminger also had suffered a recent medical condition.
“Given the publicity associated with these proceedings and the outcome, that career will not be open to him in the future.
“What makes Mr Warminger’s position different is that his recent medical issue has meant he is unable to carry out other employment for which he is qualified, at least for a significant period of time.”
Warminger’s former employer, Milford Asset Management, last year agreed to pay $1.5 million following an FMA investigation into market manipulation at the firm, which concluded Milford’s board failed to ensure “the requisite degree of monitoring” of trading activity was taking place.
The FMA said Milford had completed implementing changes to its trading systems and controls as recommended in an external review by PWC.