Financial Markets Authority v Warminger

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-001727 [2017] NZHC 327

UNDER	The Securities Markets Act 1988
BETWEEN	FINANCIAL MARKETS AUTHORITY Plaintiff
AND	MARK WARMINGER Defendant

Hearing:

26, 27, 28, 29, 30 September, 5, 6, 7, 10, 11, 12, 13, 14, 17, 19

& 20 October 2016

Appearances:

J B M Smith QC, N R Williams and K S Graham for Plaintiff M Heron QC, M A Corlett QC, D C S Morris and I Rosic for Defendant

Judgment:

3 March 2017

JUDGMENT OF VENNING J

This judgment was delivered by me on 3 March 2017 at 9.30 am, pursuant to Rule 11.5 of the High

Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Meredith Connell, Auckland

Cook Morris Quinn, Auckland

Copy to:            J B M Smith QC, Wellington

M Heron QC, Auckland

M A Corlett QC, Auckland
Financial Markets Authority

I Rosic, c/- Gilbert Walker, Auckland

FINANCIAL MARKETS AUTHORITY v WARMINGER [2017] NZHC 327 [3 March 2017]

Contents

The proceedings .....................................................................................................[1] Parties .....................................................................................................................[2] NZX and the equities market in New Zealand .......................................................[8] The investigation ..................................................................................................[26] Standard of proof..................................................................................................[31] The elements to be proved under s 11B ...............................................................[34] “The act or omission…” [38] “Will have, or is likely to have the effect”  [39] “Creating or causing the creation of a false or misleading appearance”  [73]

“With respect to the extent of active trading; ...or the supply of, demand for,

price for trading in, or value of those securities…”  [74] “Knew or ought reasonably to have known”   [75] Positive defence ...................................................................................................[77] The evidence ........................................................................................................[86] The expert witnesses ............................................................................................[91] The cross-examination of Professor Aitken .........................................................[99] The transactions in issue ....................................................................................[104] Fisher & Paykel Healthcare Corporation Limited – 27 May 2014 (COA1)  [106] The a2 Milk Company Limited – 29 January 2014 (COA2)  [152] ATM – 9 July 2014 (COA3)  [180] ATM  – 6 August 2014 (COA4)  [212] Restaurant Brands New Zealand Limited – 30 April and 1 May (COA5)  [227] Sky Network Television Limited – 19 February 2014 (COA6)  [240] Xero Limited – 15 May 2014 (COA7)  [261] Xero Limited – 30 June 2014 (COA8)  [279] Wynyard Group Limited – 31 July 2014 (COA9)  [300] Skellerup Holdings Limited – 30 April 2014 (COA10)  [316] Result..................................................................................................................[326] Declarations........................................................................................................[328] Pecuniary penalty and costs ...............................................................................[331]

The proceedings

[1]      The Financial Markets Authority (FMA) says that between January 2014 and September 2014 Mark Warminger manipulated the trading of a number of stocks on the NZX Limited (NZX) exchange.   It seeks declarations to that effect and a pecuniary penalty against Mr Warminger.

Parties

[2]      The FMA was established under Part 2 of the Financial Markets Authority

Act 2011.  It has a statutory role under the Securities Markets Act 1988 (the Act) to

receive and investigate suspected contraventions of the NZX’s Exchange Rules and of the Act.  It must notify NZX of its decision on the investigation and may apply to the Court for declarations and a pecuniary penalty order under s 42R of the Act.

[3]      Mr Warminger holds an Honours Degree in Economics from the University…