The Financial Markets Authority has contacted stock exchange operator NZX after share traders potentially gained an unfair advantage from price-sensitive information published in a news report on Sunday about biotech developer Blis Technologies.
The Dunedin-based firm's shares initially surged 55 per cent to hit a high of 3.1c yesterday after Blis released a brief market announcement at 10.07am saying its products would become available in 600 Chinese pharmacies, up from 30 at present.
But a Sunday-Star Times article about the probiotic manufacturer included a paragraph quoting chief executive Barry Richardson that contained essentially the same information, meaning traders who read the news report could have had an unfair advantage over those who did not.
NZX said 1.1 million Blis shares, worth $24,860, changed hands in seven trades between the market opening at 10am and the release of the NZX announcement, which was not flagged as price sensitive, seven minutes later.
"NZX can confirm that we are aware of the issue, but we cannot comment further at this time," said a spokeswoman.
A total of 9.7 million Blis shares, worth $258,767, were traded yesterday. The company's shares eventually closed up 25 per cent at 2.5c.
An FMA spokesman confirmed the market regulator was talking to NZX about the incident, but was unable to give any other details.
Richardson said he needed to investigate the matter before making any comment.
"Really, what you're indicating is the first I've heard," he said. "Our intention, of course, is to protect shareholder interests and I need to look at this further."
Blis' products include its K12 lozenges, which are sold in New Zealand and are claimed to fight gum disease, sore throats and ear infections.
The company reported a full-year net loss of $1.5 million in May, down from a $1.8 million loss a year earlier.