The High Court in Auckland. Photo: RNZ / Simon Rogers
The Financial Markets Authority has filed civil proceedings in the High Court in Auckland against an experienced retail investor for market manipulation.
The market regulator said Kok Ding Cheng made five small orders for shares in NZX-listed company Rua Bioscience over a 10-day period in late 2020 via a broking account with ASB Securities.
The authority said the orders lacked a genuine commercial purpose and were made for the purposes of increasing the price and-or demand for Rua shares, at a time when Cheng 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," FMA head of enforcement Margot Gatland said.
"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."
The FMA was seeking a declaration of contravention, a civil pecuniary penalty and costs but said Rua was not a party to the action.
"We considered Mr Cheng's conduct warranted a strong response to deter market manipulation," Gatland said.
"This case is an important reminder 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."