New Zealand Case Law: Decisions & Judgments

Topic

Market manipulation

Legal area

Court

13 Jul 2023

FINANCIAL MARKETS AUTHORITY v WEI (WALKER) ZHONG [2023] NZHC 2196

Citation

[2023] NZHC 2196
Court

High Court

The Court found Wei (Walker) Zhong and Lei (Regina) Ding intentionally contravened s 265 (market manipulation) and s 297 (disclosure) of the FMCA on multiple occasions; held that readily ascertainable unrealised mark-to-market gains/losses avoided by the Zhong Family Trust are properly included in the maximum penalty calculation under the FMCA; set starting points of $1,400,000 (Zhong) and $800,000 (Ding), applied a 5% reduction for lack of prior offending, and imposed pecuniary penalties of $1,330,000 on Zhong and $760,000 on Ding, with penalties to be applied first to pay the FMA's actual c…
29 Jun 2017

FINANCIAL MARKETS AUTHORITY v WARMINGER [2017] NZHC 1471

Citation

[2017] NZHC 1471
Court

High Court

The Court held the FPH DMA trades were undertaken to manipulate the market and supported subsequent off-market crossings; therefore the value of those crossings properly formed part of the consideration for the transaction under s 42W, yielding a maximum of $3,845,900. Applying s 42Y factors, industry authorities and totality, the Court set a starting point of $500,000 and allowed a 20% personal mitigation discount (medical and first offence considerations), resulting in a final pecuniary penalty of $400,000. Milford's prior $1,100,000 settlement was relevant but did not fully offset the indi…
3 Mar 2017

FINANCIAL MARKETS AUTHORITY v WARMINGER [2017] NZHC 327

Citation

(2017) 11 NZCLC 98
Court

High Court

The Court found on the balance of probabilities that Warminger manipulated the market in two instances: Fisher & Paykel Healthcare (27 May 2014) and a2 Milk (9 July 2014). In those cases his DMA buy orders, in the context of contemporaneous communications and known buying interest, were intended to and did raise and maintain quotes/last traded prices to enable crossings at improved prices; as an experienced trader he knew or ought reasonably to have known that effect. The remaining eight causes of action were dismissed because the FMA did not prove the requisite effect, knowledge or lacked su…
3 Jun 2016

FINANCIAL MARKETS AUTHORITY v WARMINGER [2016] NZHC 1193

Citation

[2016] NZHC 1193
Court

High Court

The Court ordered the FMA to amend the statement of claim to expressly identify how the pleaded trades had the effect of creating or causing the creation of a false or misleading appearance and to particularise the facts and circumstances from which it is alleged the defendant ought reasonably to have known that effect; the existing pleading was unduly conclusory and required clarification though not to the full extent of the defendant's broad requests.
23 Sept 2015

FINANCIAL MARKETS AUTHORITY v WARMINGER [2015] NZHC 2306

Citation

[2015] NZHC 2306
Court

High Court

The application for access to the statements of claim and defence was declined because the FMA had already published a press release outlining the general allegations, publication of detailed untested pleadings would not advance public understanding, required redactions would undermine utility of the documents, and disclosure at this preliminary stage posed a real risk of prejudice to third parties and potential witnesses; balancing the relevant factors favoured non‑disclosure.
7 Aug 2014

FMA v HENRY [2014] NZHC 1853

Citation

[2014] NZHC 1853
Court

High Court

The admitted trades (wash sales and layering) constituted market manipulation in breach of s11B (with presumptions under s11C applying to wash trades); the Court declared contravention and, applying the statutory factors in s42Y, the totality principle and allowance for mitigation (including delay, lack of profit, first offence and partial self-reporting), imposed a pecuniary penalty of NZD 130,000 (starting point NZD 200,000 reduced by 30–40%).

New Zealand Case Law

FINANCIAL MARKETS AUTHORITY v WEI (WALKER) ZHONG [2023] NZHC 2196

FINANCIAL MARKETS AUTHORITY v WARMINGER [2017] NZHC 1471

FINANCIAL MARKETS AUTHORITY v WARMINGER [2017] NZHC 327

FINANCIAL MARKETS AUTHORITY v WARMINGER [2016] NZHC 1193

FINANCIAL MARKETS AUTHORITY v WARMINGER [2015] NZHC 2306

FMA v HENRY [2014] NZHC 1853