Acting Business Editor for the NZ Herald

Portfolio manager bought shares to push up price, court told

Mark Warminger allegedly purchased Fisher & Paykel Healthcare shares in order to bump up their price. Photo / File
Mark Warminger allegedly purchased Fisher & Paykel Healthcare shares in order to bump up their price. Photo / File

Milford Asset Management's Mark Warminger allegedly purchased Fisher & Paykel Healthcare shares in order to bump up their price after being approached by traders wishing to buy large parcels of the stock off-market, the High Court has heard.

The accusations emerged during an application by Warminger to get more details of the "confusing" case from the Financial Markets Authority, which is suing him for alleged market manipulation.

"What is the case he needs to meet?" Warminger's lawyer Mike Heron, QC, said during this morning's hearing in the High Court at Auckland.

The FMA opposed the application and its Queen's Counsel Justin Smith said the case was clear.

"It's not realistic that he truly cannot understand what is being alleged against him," Smith told Justice Raynor Asher.

The FMA lawyer said expanding on the pleadings in the way requested could be subject to "misuse" during the trial, which is due to begin in September.

Warminger, a portfolio manager at Milford Asset Management who has been on extended leave since last year, has denied the allegations against him.

Smith, during his submissions this morning, traversed one of the 10 causes of action in the FMA's case.

It involved trades in Fisher and Paykel Healthcare shares on May 27, 2014.

Warminger, according to Smith, had use of a direct market access facility through Macquarie Bank that let him buy shares.

On that particular morning in May, Warminger allegedly learned from contacts at Forsyth Barr and Goldman Sachs that they wanted to buy large parcels of F&P shares in off-market trades, Smith said.

The shares were trading publicly at $4.31 each, Smith said, and Warminger allegedly indicated to a trader who contacted him that he may sell for $4.35 a piece.

In the meantime, he used his direct market access for a series of smaller trades that increased the price of the technology company's shares.

Warminger then allegedly sold shares in off-market trades for $4.35 each.

Warminger's conduct was "unquestionably" market manipulation, Smith alleged.

Smith later said that there could be no need for further particulars from the FMA on the question of Warminger's knowledge.

"You assume he knew what he was doing when he was doing it," he said.

Justice Asher reserved his decision on the application.

The case against Warminger followed Milford paying $1.5 million as part of a settlement with the FMA after a market manipulation probe.

- NZ Herald

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