Leading investment and sharebroking company Jarden Securities has been censured and penalised $40,000 and costs for not paying close enough attention to certain trades shares last year.
File image. Photo: Jarden Pathways
NZX, the stock exchange operator, said an investigation was launched when transport company Mainfreight's shareprice fell close to 10 percent after certain sales.
A client of Jarden Securities able to trade directly on the market using Jarden's systems sold the shares with the price little moved, but later sales saw the price fall sharply in a short period of time and also dominate overall trading on the NZX.
The price fall triggered various alerts at Jarden and the NZX market watchdog, and subsequent inquiries showed Jarden did not have a filter working on its trading system which would have prevented some of the trading.
The NZX's market regulator considered that the Mainfreight trading "likely influenced trading by other sellers in the market".
The NZX's Market Disciplinary Tribunal said Jarden Securities breaches related to a number of fundamental obligations, including "the need to maintain an orderly market" and to ensure it had the proper trading filters in place.
The Tribunal said Jarden had not had the necessary trading filter in place for almost a year, that the company's monitoring of trading through direct access was inadequate, and that previous shortcomings had not been fixed.
However, it said Jarden had since taken steps to remedy the faults, and it imposed a penalty at the lower end of its scale.
"We acknowledge the decision of the New Zealand Markets Disciplinary Tribunal and take our obligations under the NZX rules seriously," Jarden said in a brief statement.
