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NZX adviser disciplined by regulator

Friday 7 Dec 2012 11:34 a.m.

Under NZX rules, employees in a trading participant need sign-off from their boss to buy or sell any listed securities  (file)

Under NZX rules, employees in a trading participant need sign-off from their boss to buy or sell any listed securities (file)

By Paul McBeth

An unnamed adviser at a registered NZX firm will pay a $10,000 settlement with the market watchdog after getting found out on a backroom deal to get Trade Me shares when the online auction site was floated last year.

The adviser used a client to get their hands on 1,500 Trade Me shares in the initial public offering, when the stock was sold at $2.70 apiece.

The partial float's structure was unusual because the bookbuild was run before the offer document was registered.

Under NZX rules, employees in a trading participant need sign-off from their boss to buy or sell any listed securities, and aren't allowed to take part in a public offer.

The NZ Markets Disciplinary Tribunal agreed to settle with the adviser, provided they paid $10,000 into the discipline fund, and cover costs incurred by the regulator.

The adviser transferred cash to a client who then bought 1,500 shares in the float worth $4,050, which was then handed back to the adviser in an off-market transfer.

The watchdog said the mitigating circumstances for the adviser were that no clients suffered, the breach was a one-off offence, and the adviser owned up early and had already been disciplined by the firm.

NZN

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