Fund manager Milford Asset Management has confirmed it is under investigation from the capital markets regulator over claims of market manipulation.
The company said the investigation by the Financial Markets Authority covered a trader employed by Milford and certain specific trades.
Reports that the Financial Markets Authority were investigating a leading player in the funds management industry started last week.
Now, Milford Asset Management has stepped forward and said it is under investigation for alleged market manipulation, which involved trading in securities like shares that created a false or misleading appearance.
Milford, which has more than $3 billion of funds under management, said it and the trader involved are co-operating fully with the FMA.
The company stressed it did not have any implications for its clients funds, and would not change its day-to-day operations.