An Auckland investor has been accused of manipulating the Rua Bioscience share price. Photo / NZME
An Auckland investor has been accused of manipulating the Rua Bioscience share price. Photo / NZME
The Financial Markets Authority (FMA) will take action against Auckland-based retail investor Kok Ding Cheng, for alleged market manipulation of Rua Bioscience shares.
The case centres on five small orders for Rua’s shares that Cheng made over a 10-day period during late-2020 via a broking account he held with ASBSecurities.
The FMA alleges the trades were made for the purposes of increasing the price and/or demand for Rua shares at a time when he held a material shareholding in the company.
The FMA is seeking a declaration of contravention, a civil pecuniary penalty and costs.
NZ RegCo, NZX’s frontline regulatory agency, referred the conduct after ASB Securities had earlier reported potential concerns about the orders. NZ RegCo and the FMA work closely together to detect and respond to market manipulation.
Rua is not a party to the proceeding. The case was filed in the High Court in Auckland.
“This case is an important reminder that trade-based market manipulation can occur when trading through online share brokerage accounts. Investors should be careful to understand their obligations when trading online,” FMA head of enforcement Margot Gatland said.
ASB Securities has systems to detect and refer concerns to NZ RegCo. This demonstrates the critical role that good systems play in detecting and preventing potential misconduct in markets, the FMA said.
