Milford Asset Management portfolio manager, Mark Warminger, will face court on market manipulation charges next September, the Financial Markets Authority (FMA) revealed last week.
According to the FMA website, Warminger, who was singled out by the regulator for legal action in June after an almost year-long investigation into Milford, will begin proceedings on September 26, 2016, in the Auckland High Court.
The court date was set on October 6, 2015, with “timetabling orders” due to be announced at the same court on November 13 this year.
Warminger was officially served notice of legal action on June 27, more than four months after Milford revealed it was under investigation by the FMA.
“The FMA filed and served civil proceedings against Mr Warminger seeking pecuniary penalties for alleged breaches of the Securities Markets Act 1988 relating to trading carried out between December 2013 and August 2014 which the FMA alleges amounted to market manipulation,” the FMA website says.
Prior to launching action against Warminger, the FMA signed an agreement with Milford that indemnified the firm, and all its employees (excluding the-then unidentified ‘trader’), against further legal action in relation to the market manipulation allegations.
Under the agreement, Milford paid a $1.5 million fine and committed to implementing new governance and trading controls as recommended in a PwC review of the $3 billion funds management firm.
Warminger, who was placed on ‘extended leave’ from Milford in the wake of the FMA investigation, has been accused of:
- placing small trades directly on market in one direction, followed by large off-market trades in the opposite direction;
- trading that manipulates the closing price; and
- trading conducted in order to set the price, rather than for a genuine commercial purpose.
Last week the regulator also announced a raft of new appointments and a “revised organisational structure”.
New FMA hires include Nick Kynoch as general counsel, and Sarah Coleman as director of people and capability (replacing Diana Christensen who held the role on an interim basis).
Kynoch was previously Barclays Bank global head of contentious regulatory compliance and conduct risk in London.
Current FMA employees, Garth Stanish and Simone Robbers, have also been appointed to new roles, respectively, director of capital markets, and director of strategy and risk.
Aside from Christensen, Owen Gill, current director of external communications, has voluntarily left the FMA building. Gill’s replacement would be “confirmed shortly”, the FMA statement says.
The new FMA structure features seven operating units including an expanded general counsel role and two new divisions, capital markets and, strategy and risk.
“This new structure should be sustainable over the medium-term, taking advantage of existing strong leaders within the FMA, and bringing essential new skills and experience to the leadership team,” FMA chief, Rob Everett, said in the statement.
In June, the FMA also established several new executive roles, then naming Stanish as director markets oversight and Christensen in the role she will now evacuate.
The regulator has lost a number of key staff this year including: Belinda Moffat, former head of enforcement and investigations, who resigned in August; and, director of compliance, Elaine Campbell, who decamped to take up the general legal counsel role at AMP NZ in May.