Financial Markets Authority boss Rob Everett should simply tell the market exactly what its probe into alleged market manipulation at one of the country's highest profile funds manager entails.
Any claims to confidentiality - only the most naive would have expected the probe to remain secret in the first place - flew out the window when Milford Asset Management outed themselves as being under investigation for alleged market manipulation.
By now Everett should have not only told the market what his enforcement team is investigating, but given an assurance a full report will be issued at the end of the probe and that enforcement action will be taken if warranted.
That is the kind of assurances that NZ investors want and counter-parties like the NZ Super Fund, which is keeping a watching brief given Milford's role managing a $253 million active equities account.
It's also what ensures that confidence is maintained in our markets and among investors. These range from KiwiSavers to the many high net worth individuals who have invested millions of their own cash through Milford.
It was inevitable that the Milford probe would leak given the stature of the company, its high-flying principals like Brian Gaynor (also a Herald columnist) and managing director Anthony Quirk.
Both have built enviable reputations in the market and grown Milford from a standing start to an award-winning firm with funds totalling more than $3 billion under management.
But after news of the FMA probe leaked, the market remained absurdly uninformed with a steady stream of Milford's rivals issuing "It ain't me" comments to journalistic queries.
This is patently absurd.
By late last week Milford's name was being openly tipped in the Shortland Street waterholes.
However, the media didn't run with Milford's name until Quirk - who had the integrity to make the disclosure himself on Monday afternoon - issued an anodyne statement saying the investigation concerns an individual trader employed by the firm and certain specific trades.
Quirk went on to say that Milford and "the trader" were co-operating fully with the FMA and that the investigation had no implications for clients' funds and no impact on day-to-day operations.
Behind the scenes, Milford's high net worth investors - who would have been unsettled by the disclosures - would have been given a little bit more flavour than what was in the press statement to ensure their confidence is maintained.
The issues at stake may be at the lesser end of the scale of potential infringements - as Milford has implied in its own public statements - or have a deeper-lying significance.
But in the absence of clarification from the FMA's director of enforcement and investigations Belinda Moffat the market is running hot with speculations ranging from bizarre algorithmic trades to attempts by a trader to game results and hence performance fees. There has also been speculation that the probe was leaked by a competitor.
The facts are that the Milford issue was referred to the FMA by the NZX's surveillance team as one of 24 referrals in 2014.
My view is that the referral - along with the other 23 from 2014 - should simply have been disclosed.
Market manipulation is an issue in New Zealand. The classical definition is it involves deliberate attempts to interfere with the market to create artificial, false or misleading appearances in supply, demand or the price of securities.
It is also a priority for both the FMA and the NZX as evidenced in their January 28 memorandum of understanding.
There is plenty of academic evidence of gaming behaviour in equity mutual funds.
An international study, Leaning for the Tape: Evidence of Gaming Behavior in Equity Mutual Funds, presents evidence that fund managers inflate quarter-end portfolio prices with last-minute purchases of stocks already held. The magnitude of price inflation ranges from 0.5 per cent per year for large-cap funds to well over 2 per cent for small-cap funds.
As the authors note: "We find that the cross section of inflation matches the cross section of incentives from the flow/performance relation, that a surge of trading in the quarter's last minutes coincides with a surge in equity prices, and that the inflation is greatest for the stocks held by funds with the most incentive to inflate, controlling for the stocks' size and performance.
"Some fund managers apparently want to make themselves look more successful than they are. And some can boost their compensation while they're at it." This is why the FMA and the NZX are focused on market manipulation.
If something is proved to be amiss at Milford, the funds management company will have had a serious bruise.
It has six portfolio managers and a compliance team whose supervisor's last job was with the FMA. At the very least a full review of procedures should be happening - before the watchdog reports.