FMA launches civil case against Warminger

File photo of Mark Warminger at the 2013 Infinz awards.

Regulators have launched High Court action against Milford Asset Management's Mark Warminger, seeking financial penalties for his alleged market manipulation.

The Financial Markets Authority, which last month reached a $1.5 million settlement with Milford, has today announced civil proceedings against Warminger - a portfolio manager at the firm who last month ceased to be involved with its investment team without explanation.

The FMA alleges that trading undertaken by Warminger between December 2013 and August last year amounted to market manipulation.

"The FMA alleges the trading had, or was likely to have had, the effect of causing the creation of a false or misleading appearance relating to the extent of active trading in the relevant securities or the supply of, demand for, price for trading in, or value of those securities," the market regulator said.

Warminger, through his lawyer, has denied the allegations and said he will defend the case.

"When the facts are traversed in court the public will be able to draw its own conclusions on both the FMA and this particular claim," defence lawyer Marc Corlett said in a written statement.

"The fact that the FMA asserts something does not of course make it so and we fully expect that fair-minded people will wait until the court process is complete before drawing any conclusions about Mr Warminger's trading."

A statement from the FMA alleges Warminger's trading fell into the three categories:
• 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.

In response to this, Corlett said that it was "a matter for interpretation, firstly whether the activity was as suggested; and secondly whether, even if that were so, (which is denied) it would constitute market manipulation."

FMA director of enforcement and investigations Belinda Moffat said the issues in the case were "of significant importance to New Zealand's secondary markets and the FMA's focus on ensuring that our markets are seen as fair and transparent places to do business."