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A man using the online share trading platform Sharesies has found himself in hot water for suspected market manipulation.
The Financial Markets Authority issued a warning to the individual trader, for engaging in low-level trading that could create a false or misleading appearance in the share price for an unnamed company.
The trader, who was also not named, used his partner's Sharesies account to place eight sell orders for the shares, while at the same time, used his own Sharesies account to place 11 buy orders, and his partner's account to place another four buy orders.
The FMA said the orders were placed in a way that saw the share price move higher on at least 10 occasions.
The alleged conduct occurred over two weeks in November 2021.
Sharesies detected and reported the trading to the market regulator NZ RegCo and the FMA.
The man told the FMA he placed the initial sell orders to fund kitchen renovations.
He told the FMA he was "gutted" to sell the shares because he was slowly building up his holding, and subsequently bought shares on his own account to feel positive about something and that he was heading in the right direction.
He also told the FMA he placed buy orders in larger amounts than usual because he was "gutted" about having to sell large amounts from his partner's portfolio.
And after selling, he said he was annoyed at having to sell and found another way to fund part of the kitchen costs and bought some shares back.
He then placed sell orders to pay the builder but learned he did not need to pay the builder until later, and placed the buy orders the same day to buy back $3000 worth of shares.
But he quickly sold another $2000 worth after realising he needed to pay the painter on the same day.
The FMA concluded the man knew or ought to have known his trading was likely to create a false appearance in the share price of the company he invested in.
The FMA deemed a formal warning was the "appropriate and proportionate response", after considering a range of factors, including the size and value of the trading, and the trader's personal circumstances.
FMA general counsel Liam Mason said: "Market manipulation is a serious breach of the law, even when the volume and value traded is low. New Zealand's market manipulation provisions seek to ensure there is genuine supply and demand in our equity markets and play a critical role in preserving the integrity of the share market."
