Warning from FMA

[brent]

This is interesting...
The Financial Markets Authority (FMA) has issued a warning to an individual online trader in relation to suspected market manipulation trading conduct.

Following an investigation, the FMA concluded that the individual has likely breached the market manipulation prohibitions contained in sections 11B and 11C of the Securities Markets Act 1988.

The FMA has reached the view that the person engaged in trading that resulted in no change in beneficial ownership in the shares they traded. This is presumed to be market manipulation under the Securities Markets Act.

The FMA also considers that the individual engaged in ‘bait-and-switch’ trading conduct. The FMA considers that the trades were likely to have the effect of creating a false or misleading appearance about the extent of active trading in, supply of, price for, or value of the shares traded. Such conduct may attract other traders into the market. This type of conduct is also prohibited under the market manipulation prohibition provisions in the Securities Markets Act.

In reaching its decision to issue a formal warning, on a no names basis, the FMA took into account a number of factors including:
· the individual was an inexperienced trader, and was not aware that trading with themselves was prohibited

· the online trading platforms used by the individual did not provide guidance on permitted and prohibited trading activity

· the trading occurred over a short period of time and the individual did not enjoy any significant personal gain

· the individual co-operated with the FMA through the investigation

· the individual is now seeking professional advice about their investments and trading.


“We welcome trading in secondary markets, but we want to ensure that those who trade are aware of and follow the rules that are designed to ensure that the secondary markets operate efficiently and fairly. People who trade must ensure that they know what conduct is prohibited, before they trade,” said the FMA’s Director of Enforcement and Investigations, Belinda Moffat.

“We consider that a warning in this case is a proportionate and effective response to the activity identified. Investigating and taking action against conduct such as insider trading and market manipulation that undermines the integrity and reputation of our markets is one of the FMA’s key strategic priorities,” she said.

The FMA will work closely with NZX and online trading platform providers to increase the information available to casual online traders and to raise awareness and understanding of the rules and prohibitions relating to trading conduct.

This case was referred to the FMA by NZX. The warning can be viewed here.
http://www.fma.govt.nz/keep-updated/warnings-alerts-and-scams/fmas-latest-warnings-and-alerts/2015/notification-of-warning-individual-trader-market-manipulation

[robbo24]

· the individual was an inexperienced trader, and was not aware that trading with themselves was prohibited


Sounds to me like moosie_900 has come off the rails...

:D:D:D:D:D

[Harvey Specter]

A shame it doesn't say what share it was in. We have been mislead but FMA has determined we should continue to be mislead about historical liquidity. Anyone with inside info on this?

[J R Ewing]

A warning that maybe is useful for the dishonest trader (or the naive trader who wanted to manipulate the market, if you buy that defence). But without details of even what share(s), and when, let alone who, it is pretty much useless to the retail investor. Yet again, the interests of the innocent are outweighed by the desire to protect the guilty.

Whatever happened to "Justice must not only be done, it must be seen to be done."

[robbo24]

A shame it doesn't say what share it was in. We have been mislead but FMA has determined we should continue to be mislead about historical liquidity. Anyone with inside info on this?

If you're really interested...

The Official Information Act 1982 applies to the Financial Markets Authority (http://legislation.govt.nz/act/public/1982/0156/latest/DLM65921.html).

Just drop them an email and say "I request under s 12 of the Official Information Act 1982 (http://legislation.govt.nz/act/public/1982/0156/latest/DLM65382.html) all information relating to [that particluar matter]" and see what you get back.

If they blank stuff out then go right ahead and complain to the Office of the Ombudsman and say you want a review of whether the omissions were justified under the Act.

Easy peasy - get amongst it - looking forward to seeing what you get back :D

Note: FMA does have some quasi-judicial functions which they may try to rely on to refuse your request but sometimes you just have to roll the dice of life.

[Schrodinger]

If you're really interested...

The Official Information Act 1982 applies to the Financial Markets Authority (http://legislation.govt.nz/act/public/1982/0156/latest/DLM65921.html).

Just drop them an email and say "I request under s 12 of the Official Information Act 1982 (http://legislation.govt.nz/act/public/1982/0156/latest/DLM65382.html) all information relating to [that particluar matter]" and see what you get back.

If they blank stuff out then go right ahead and complain to the Office of the Ombudsman and say you want a review of whether the omissions were justified under the Act.

Easy peasy - get amongst it - looking forward to seeing what you get back :D

Note: FMA does have some quasi-judicial functions which they may try to rely on to refuse your request but sometimes you just have to roll the dice of life.

Didn't DIL or RAK get recently pulled up for this?

[Harvey Specter]

Didn't DIL or RAK get recently pulled up for this?It was in relation to DIL but did not impact DIL.: http://www.stuff.co.nz/business/industries/10359697/Diligents-Brian-Henry-admits-market-manipulation

[BFG]

Sounds to me like moosie_900 has come off the rails...

:D:D:D:D:D

I maybe stupid, but I'm not stupid enough to try and bait and switch by trading my own shares in an illiquid secondary market!

You would be the first to know it was me anyways, you're at the top of my contacts list and on speed dial :D :D :D

[skid]

Have a look at some of the things that go on with house auctions

[Schrodinger]

Have a look at some of the things that go on with house auctions

Property is sacred. Get with the programme!

[stoploss]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11397159

[sb9]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11397159

You just beat me by 2 seconds, wonder if its to do with ATM or any other stocks??

[Xerof]

Manipulation is not just on downtrending stocks, a stock can be manipulated higher as well - just look at every year end bonus season.

IMO, algorithmic trading is a clear form of manipulation which should also be investigated

Then there is blatant, factually unsubstantiated, up and down-ramping on forums such as ST and HC.

Then there is manipulation of depth orders by stacking one side to influence the other.

Then there is bluffing at the open and closing auctions.

In fact anyone who has the audacity to put orders onto the market in any shape or form should be investigated as a manipulator


just kidding :D

[winner69]

You just beat me by 2 seconds, wonder if its to do with ATM or any other stocks??

Looks like this one will resolved behind closed doors and we will only get some wishy washy statement.

We should be party to this explosive event - Quote from article - But it would likely be an explosive case should it see the light of day.

[Balance]

Looks like this one will resolved behind closed doors and we will only get some wishy washy statement.

We should be party to this explosive event - Quote from article - But it would likely be an explosive case should it see the light of day.

Big yawn.

Make a complaint to the FMA about anything and they will send a 'warning' letter.

Clear case here of envy and jealousy in the funds management industry.

[bull....]

Id say those big incentives offered for results are more likely the issue

[Lola]

Looks like this one will resolved behind closed doors and we will only get some wishy washy statement.

We should be party to this explosive event - Quote from article - But it would likely be an explosive case should it see the light of day.
What, like the BLT process? Lose the file?

[Balance]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11397331

"NZX chief executive Tim Bennett said last week that keeping a lid on market manipulation was particularly important for retaining the confidence of overseas investors.

"People won't trade in our market, particularly offshore, if they feel it's subject to manipulation ... because they are naturally disadvantaged."

Understatement of the year when NZX is bringing on NXT, the market where it's 'no care, and absolutely no responsibility'.

NXT - the formalization of the Wild West backdoor no disclosure anything goes market. Endorsed by the FMA.

[sb9]

Milford trader under FMA investigation

Milford Asset Management has confirmed one of its traders is the subject of a Financial Markets Authority investigation.
The investigation concerns an individual trader employed by the firm and “certain specific trades”, Milford said in a statement.
Milford says it and the trader concerned are co-operating fully with the FMA.
“The investigation does not have any implications for client funds and has no impact on the day-to-day operations of Milford.”
Last week NBR ONLINE and other media outlets reported speculation (http://http//www.nbr.co.nz/article/fma-investigates-fund-manager-sources-db-168301) the FMA is investigating allegations of market manipulation within the industry.
The FMA is tight-lipped on the matter: "We don't comment on whether or not we are investigating - particularly in secondary markets," a spokesman said in a statement.
Milford is one of the country's better known fund managers with funds under management of about $3 billion, including three KiwiSaver funds.

[BFG]

Milford trader under FMA investigation

Milford Asset Management has confirmed one of its traders is the subject of a Financial Markets Authority investigation.
The investigation concerns an individual trader employed by the firm and “certain specific trades”, Milford said in a statement.
Milford says it and the trader concerned are co-operating fully with the FMA.
“The investigation does not have any implications for client funds and has no impact on the day-to-day operations of Milford.”
Last week NBR ONLINE and other media outlets reported speculation (http://http//www.nbr.co.nz/article/fma-investigates-fund-manager-sources-db-168301) the FMA is investigating allegations of market manipulation within the industry.
The FMA is tight-lipped on the matter: "We don't comment on whether or not we are investigating - particularly in secondary markets," a spokesman said in a statement.
Milford is one of the country's better known fund managers with funds under management of about $3 billion, including three KiwiSaver funds.

Wow, and most of us thought Milfie was squeaky clean!

Wonder if Robbo is up for photoshopping Gaynor having a fit with a trader in the office...?

[TJP]

Wow, and most of us thought Milfie was squeaky clean!

Wonder if Robbo is up for photoshopping Gaynor having a fit with a trader in the office...?

Wherever there is the alluring smell of money, there will be corruption. Disappointed TBH as I have $ tied up with the MILF.

[Balance]

Milford is not guilty until proven.

There is a lot of jealousy and envy in the industry at the growth, performance and profile of Milford.

Meanwhile, I have seen over the years the worse ramping (and subsequent loss of money by investors) by a certain fund manager but it's all a big yawn.

[Schrodinger]

Brian fiddling the markets or a junior gaming the system for a bonus?

[Lego_Man]

Brian fiddling the markets or a junior gaming the system for a bonus?


The comment from Milford that it was an "individual trader" is completely disingenuous - trying their best to make it sound like a back office rogue.

Funds in New Zealand typically don't have a separate trading team, as they do in other jurisdictions. The portfolio manager has day-to-day oversight of the fund and has complete discretion to put through trades as and how they see fit.

Let's think about who has the incentives to puff up performance? It certainly isn't the operations monkey with no skin in the game.

There's no doubt in my mind that the individual in question is a portfolio manager, of which there are several at Milford. This will come out in due course. As to your above, i don't believe it is Brian Gaynor.

[Schrodinger]

As soon as people are paid according to performance (how much money they make) you will get people who will go out of their way to try and beat the market and other market participants. Its human behaviour. I think Charlie Munger commented on it many moons ago. Also reiterated in most of Michael Lewis' books about traders. If its one thing I have learned from reading those books is that there is no such thing as an ethical trader, and no-one who cares about the customer's outcomes (they are just grist for the mill). I am very grateful that I am capable of managing my own money and investments, as there is no way I would be handing it over to anyone in that industry.

Completely agree KW. The NZ equity markets are small enough as it is without Cowboys like these trying to make a quick buck. Not to mention the Milford brand will be tarnished. I assume one of the Five will be fired for bringing the company into disrepute or is this a well established practice that is accepted and the company will do nothing. Think carefully Milford as many will be watching closely.

[OutToLunch]

Completely agree KW. The NZ equity markets are small enough as it is without Cowboys like these trying to make a quick buck. Not to mention the Milford brand will be tarnished. I assume one of the Five will be fired for bringing the company into disrepute or is this a well established practice that is accepted and the company will do nothing. Think carefully Milford as many will be watching closely.

I too have savings in a couple of their funds and this is not a good look.

Suggest Milford quickly and publicly dismiss the individual in question. Lance the boil, as it were, rather than attempting any sort of cover-up, otherwise the smell will linger. What a shame, they have such a good reputation (and track record) too.

[Lola]

I highly, highly doubt it would be Brian, from my dealings with him he has been a very ethical man, much to my displeasure sometimes :D

Good on them for standing up and saying it was us to take the speculation away from other places. If only the FMA itself had such standards...
Lets now watch the Blame Game.
But aren't we all told the CEO should know what happens in the tea room?
M ford are always on about transparency !

[Under Surveillance]

I've had a lot of goodwill towards Gaynor, not as a customer but because of his years of contributions through television interviews and newspaper columns to understanding of market matters.

The fact that Gaynor has now, after an interval, come clean as the proprietor of this fiasco does him some credit.

However, harking back to post #1 on this thread, and seeing what the FMA said about its concerns, one has to say that Milford has been a very sloppy ship, with poorly-chosen crew:

In reaching its decision to issue a formal warning, on a no names basis, the FMA took into account a number of factors including:
· the individual was an inexperienced trader, and was not aware that trading with themselves was prohibited

· the online trading platforms used by the individual did not provide guidance on permitted and prohibited trading activity

· the trading occurred over a short period of time and the individual did not enjoy any significant personal gain

· the individual co-operated with the FMA through the investigation

· the individual is now seeking professional advice about their investments and trading.

It is grossly remiss of Milford that they were not up to providing this hapless, inexperienced, individual with the professional advice which he is now seeking before they let him loose as a trader.

[dingoNZ]

I suspect he did in fact know what he was doing.. time shall tell

[stoploss]

Under Surveillance , are you sure this isn't a new case .Totally different to the one in post #1 ?

[BFG]

I've had a lot of goodwill towards Gaynor, not as a customer but because of his years of contributions through television interviews and newspaper columns to understanding of market matters.

The fact that Gaynor has now, after an interval, come clean as the proprietor of this fiasco does him some credit.

However, harking back to post #1 on this thread, and seeing what the FMA said about its concerns, one has to say that Milford has been a very sloppy ship, with poorly-chosen crew:

In reaching its decision to issue a formal warning, on a no names basis, the FMA took into account a number of factors including:
· the individual was an inexperienced trader, and was not aware that trading with themselves was prohibited

· the online trading platforms used by the individual did not provide guidance on permitted and prohibited trading activity

· the trading occurred over a short period of time and the individual did not enjoy any significant personal gain

· the individual co-operated with the FMA through the investigation

· the individual is now seeking professional advice about their investments and trading.

It is grossly remiss of Milford that they were not up to providing this hapless, inexperienced, individual with the professional advice which he is now seeking before they let him loose as a trader.

The case you are quoting here is totally different to the Milford ome which arose today...

[Schrodinger]

I will have a go at the job description: Must be able to play hard and fast with both the markets and FMA. Work without supervision and be a self starter and have the drive to be the best using any means necessary (using other people's money). Leave your ethics and humility at the door we want traders wo can be creative and think outside the square.

[bunter]

You assume that this was a "cowboy", a "loose cannon" who acted without sanction. I bet he was only doing what everyone else was doing, in fact, had to do in order to keep up, and was just the unlucky bastard who didnt cover his tracks fast enough. It was probably sanctioned by his bosses, and engaged in by every other trading house and fund out there.

Agree, mustn't make assumptions.

[Tomtom]

Agreed with other posters here but I would also add that, in my view, it doesn't actually matter if they knew or not because it was their job to know. How can they hope to manage compliance issues if they aren't actively monitoring operations that incur compliance risk?

Saying the problem lies with one person suggests there is actually an organisational flaw and appears to be a very poor attempt to shirk responsibility at the very least. For an organisation playing with a lot of real money I’d have assumed they would take their duty to clients more seriously.

[BFG]

I will have a go at the job description: Must be able to play hard and fast with both the markets and FMA. Work without supervision and be a self starter and have the drive to be the best using any means necessary (using other people's money). Leave your ethics and humility at the door we want traders wo can be creative and think outside the square.

Traders, Guns and Monry provides a very good "job description" of a share/derivatives trader, go pick up a copy ;)

[BFG]

You assume that this was a "cowboy", a "loose cannon" who acted without sanction. I bet he was only doing what everyone else was doing, in fact, had to do in order to keep up, and was just the unlucky bastard who didnt cover his tracks fast enough. It was probably sanctioned by his bosses, and engaged in by every other trading house and fund out there. That is the culture of the industry. Do what needs to be done to get that extra buck. Its why we have market crashes all the time - people just take things too far in the competition to be the one on top. Of course, the fund will turn around and deny that they authorised this, just like every bank has done with every trader who gambled and lost so big it made the media. Nothing will change. The "manipulation" will just be tweaked slightly so it sits just this side of legal, and the competition to be the "best" will continue because there are million dollar bonuses at stake.

Tptally agree. Compartmentalise the damage, learn more sneaky moves to cover tracks and then back to business as usual.

[Lego_Man]

Anyone wondering who "the five" are:

http://milfordasset.com/about-milford/meet-the-team/

You can work out the rest!

[Schrodinger]

Anyone wondering who "the five" are:

http://milfordasset.com/about-milford/meet-the-team/

You can work out the rest!

Might be 6 was trying to do a rough calc. I think these are the only guys authorised to trade the funds.

[Lego_Man]

Might be 6 was trying to do a rough calc. I think these are the only guys authorised to trade the funds.

Indeed, but you can discount the fixed interest managers and the global equities manager - pretty hard to manipulate Apple running $100m from Auckland!

[winner69]

Anyone wondering who "the five" are:

http://milfordasset.com/about-milford/meet-the-team/

You can work out the rest!

What's your methodology ..... Amount of facial hair o do the eyes give it away

[Balance]

The issue is compounded by the fact that Milford staff are also invested in the funds. So they are manipulating the prices to line their own pockets. Its not just about bonuses. Wonder how many other fund managers/traders who are invested in their own funds are also gaming the system so to make themselves rich?

Lets see how this works. Artificially inflate funds performance to attract more customer funds inflow = more fees and a big bonus. Winning. Increase value of funds the trader is personally invested in = profits. Winning. Beat the market performance = more fund performance fees and a big bonus. Winning. Get a reputation as a high performing manager = job offers with even more money from other funds/big banks. Winning.

Risk of getting caught - up until now, nix. Not a bad risk vs reward scenario.

Real can of worms there when it is opened up like that, KW!

[stoploss]

Possibly most worrying for them is the NZ Super Mandate .
NZ Super I would imagine , must have a set of guidelines etc
That they expect their managers to adhere to .

[Balance]

Possibly most worrying for them is the NZ Super Mandate .
NZ Super I would imagine , must have a set of guidelines etc
That they expect their managers to adhere to .

Indeed!

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11399574

[bunter]

Well, aside from the fact that Milford doesnt have any female fund managers, it could not have been a female as its been proven over and over* that women are far superior traders than men and thus there would be no need to manipulate the price to make herself look good, she simply would be good. And if she did, then she'd probably be smart enough to not get caught :D

*http://faculty.haas.berkeley.edu/odean/Papers/gender/BoysWillBeBoys.pdf
http://www.washingtonpost.com/business/behavioral-economics-show-that-women-tend-to-make-better-investments-than-men/2013/10/10/5347f40e-2d50-11e3-97a3-ff2758228523_story.html
http://www.forbes.com/2011/06/21/warren-buffett-invests-like-a-girl-book-excerpt.html

OK I withdraw and apologise unreservedly to KW... she did her homework, I didn't.

Interesting to see one of the six might have rubbed shoulders with Jerome Kerviel at Societe Generale.

[iceman]

A good article from Fran Sullivan http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11399751

[Schrodinger]

A good article from Fran Sullivan http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11399751

"An international study, Leaning for the Tape: Evidence of Gaming Behavior in Equity Mutual Funds, presents evidence that fund managers inflate quarter-end portfolio prices with last-minute purchases of stocks already held. The magnitude of price inflation ranges from 0.5 per cent per year for large-cap funds to well over 2 per cent for small-cap funds."

My question is: considering all transactions can be traced why is this behaviour still being undertaken? Are the traders setting up fake accounts or just using the one account to partake in the dodgy activity? Given KW's excellent summary of the blatant gaming by traders to inflate their overpriced salaries are these frauds built into employment contracts and mean instant dismissals from said fund?

If not why not given they are cheating the company, investors and future employers.

[janner]

[QUOTE= If not why not given they are cheating the company, investors and future employers.[/QUOTE]

A sign of the times..

Money Rules ..

[GTM 3442]

Having followed this for a while, I think that we have an example of New Zealand's compliance culture.

New Zealand has created a world-class prescriptive compliance environment, but has not created an enforcement regime to match it.

As a result, there appear to be few cases of effective "consequences" for compliance failures.

This is not limited to the financial sector.

Shame, really.

[Balance]

http://meemsy.com/v/28287

a little entertainment.........

Very very good!

Thanks for the best laugh I have had in days!

[enzed staffy]

hahahahahaha - hilarious snapiti

[Balance]

NBR reports Milford has hired a top legal gun to represent its interaction with the FMA.

Guess the FMA will now put on its plastic dentures to deliver a warning bite.

Pathetic bureaucrats wallowing in their self-importance until they meet a QC on $1,800 an hour across the table.

[Lola]

NBR reports Milford has hired a top legal gun to represent its interaction with the FMA.

Guess the FMA will now put on its plastic dentures to deliver a warning bite.

Pathetic bureaucrats wallowing in their self-importance until they meet a QC on $1,800 an hour across the table.
This is dragging on somewhat. Doubtless though FMA reps will be working through the weekend to make progress.
Sorry just joking.

[Moosie]

Wouldn't it be interesting/ironic if Wynyard software caught Milford manipulating Wynyard stock?

Just sayin... ;)

[Xerof]

Wouldn't it be interesting/ironic if Wynyard software caught Milford manipulating Wynyard stock?

Just sayin... ;)

Oops, I see V3 of the antlered one is banned already, but I wanted to point him to the WYN thread re his belated observation. Never mind - perhaps come back as a crayfish??

[winner69]

Oops, I see V3 of the antlered one is banned already, but I wanted to point him to the WYN thread re his belated observation. Never mind - perhaps come back as a crayfish??

Maybe he just typed 'Banned' in his profile ...like I am 'Banned' as well now just as you are

Could cause total confusion couldn't we

[Xerof]

Yes mate, but search for moosie in the members list......

They'd never ban you winner, over 10k posts means lifetime membership without censorship doesn't it?

:t_up:

in which case I remain vulnerable....

[skid]

LOL........moosie has been banned again for creating another profile while being banned as BFG.......

Ha..Ha....never a dull moment....what will the next incarnation be...how bout dennab (banned spelled backwards)

[jonu]

I see Balance has also joined the ranks of the "banned"

[Baa_Baa]

The naysayers vilifying the FMA couldn't be more wrong about the people, imho. It disgusts me to read such vitriol.

I worked there on a contract with the senior and middle management. The FMA staff are very astute, diligent and passionate about their role in regulating for fair markets. They are amongst the brightest professionals I have ever worked with. What people may not realise is that FMA also contract brilliant analysts, forensic financial and accounting specialists, as well as legal solicitors and barristers - from any number of the big-name firms. I wouldn't want to be on the wrong side of the FMC Act. Once someone or entity is on the FMA radar, it can't and won't go away until resolved.


People underestimate the powers of the regulator and their collective resolve to leverage those powers for a fair market, especially under the much strengthened FMC Act 2014, or their ability to contract the absolute best in the business when required. The FMA may appear to dither which I think may be at the heart of some peoples angst, though again from experience working alongside them, they have very complex issues to juggle and in fairness have come through a massive reorganisation in order to regulate the FMC Act and are still working through the finer details of the extent and methods of exercising their powers as regulator.

FMA will only get stronger and stronger, and as an investor needing those protections, I am very happy with that.

BAA

[macduffy]

Thanks, Baa Baa.

It's refreshing to see a bit of "balance" introduced to this thread. My jury's still out on this particular issue despite watching others jump to early conclusions!

:cool:

[Schrodinger]

Get prepared for some spin and I don't mean the cricket sort. For the FMA to even investigate a dodgy trader means they have been doing something wrong. Given they have access to all accounts and trading information this has to be the case.

Milford will be deciding on how to manage this but at the minimum the shady trader has to go and they have to make it quite clear that cooking the books is no longer tolerated.

For those investors who have placed funds how confident are you of their actual performance and how does this compare to ETFs which will be very popular in a couple of years.

When it comes to investing you should never outsource your thinking.

[jonu]

Get prepared for some spin and I don't mean the cricket sort. For the FMA to even investigate a dodgy trader means they have been doing something wrong. Given they have access to all accounts and trading information this has to be the case.

Milford will be deciding on how to manage this but at the minimum the shady trader has to go and they have to make it quite clear that cooking the books is no longer tolerated.

For those investors who have placed funds how confident are you of their actual performance and how does this compare to ETFs which will be very popular in a couple of years.

When it comes to investing you should never outsource your thinking.

Hung, drawn and quartered in the court of Schrodinger. What do we need the FMA for? Lets just hang someone/thing out to dry without any of the facts in front of us.

[stoploss]

Get prepared for some spin and I don't mean the cricket sort. For the FMA to even investigate a dodgy trader means they have been doing something wrong. Given they have access to all accounts and trading information this has to be the case.

Milford will be deciding on how to manage this but at the minimum the shady trader has to go and they have to make it quite clear that cooking the books is no longer tolerated.

For those investors who have placed funds how confident are you of their actual performance and how does this compare to ETFs which will be very popular in a couple of years.

When it comes to investing you should never outsource your thinking.

Judging by these numbers the Milford Growth / Australasian fund is streets ahead of the competition on a 5 year basis . I am confident any change will be immaterial .
Bit of a storm in a teacup imo , lets wait and see the outcome . But as an investor not worried in the slightest.

http://www.morningstar.com.au/s/documents/kiwisaver_survey_14q4_final_v1.pdf

[macduffy]

Judging by these numbers the Milford Growth / Australasian fund is streets ahead of the competition on a 5 year basis . I am confident any change will be immaterial .
Bit of a storm in a teacup imo , lets wait and see the outcome . But as an investor not worried in the slightest.

http://www.morningstar.com.au/s/documents/kiwisaver_survey_14q4_final_v1.pdf

Wow!

Bad move, stoploss. You know how posters react to the word "Morningstar"!

:D

Seriously, I'm in your camp - and I don't think that the FMA is the deadloss lame duck that some have painted it.

[Lego_Man]

............

[stoploss]

http://meemsy.com/v/28287

The above video been doing the round last couple of days :ohmy:

Hey Lego , check out post # 55, from the 13/2 ....( keep up with the play )

[Lola]

Judging by these numbers the Milford Growth / Australasian fund is streets ahead of the competition on a 5 year basis . I am confident any change will be immaterial .
Bit of a storm in a teacup imo , lets wait and see the outcome . But as an investor not worried in the slightest.

http://www.morningstar.com.au/s/documents/kiwisaver_survey_14q4_final_v1.pdf
Far from a storm in a teacup now. FMA say they are now all over " two major broking outfits" crawling through the communication records.
Milfgate 2013/15?

[Tomtom]

What people may not realise is that FMA also contract brilliant... HR people?
7122
Anyway I'm sure they'll get the type of 'responces' they deserve.

[drcjp]

HR people?
7122
Anyway I'm sure they'll get the type of 'responces' they deserve.
lol.

I had to laugh at the opening gambit "...restoring confidence in NZ financial markets......."

[Schrodinger]

lol.

I had to laugh at the opening gambit "...restoring confidence in NZ financial markets......."

Link please Lola

[Schrodinger]

Maybe its time for Brian to display some of his own advice and be transparent?

[Lola]

Maybe its time for Brian to display some of his own advice and be transparent?
Don't hold your breath. More likely to witness a Michael Higgins type download.

[macduffy]

Maybe its time for Brian to display some of his own advice and be transparent?

Relax, all. Brian's weekly column in next Saturday's Herald will explain all.

;)

[Lola]

Relax, all. Brian's weekly column in next Saturday's Herald will explain all.

;)

Thats a Tui Ad.Incidently where has
his TV breakfast promo gone ?

[Baa_Baa]

http://www.gmi.co.nz/news/2614/the-skinny-on-market-manipulation.aspx?utm_source=GMI-online-february-15&utm_medium=email&utm_campaign=markets

[blackcap]

Even whaleoil get in on the act....

http://www.whaleoil.co.nz/2015/03/more-unethical-behaviour-from-milford-asset-murkiness/#more-180045

[blackcap]

The toothless bridgade......... FMA now referring to blatant market manipulation as shortcomings........


https://www.nzx.com/regulators/FMA/announcements/261584

Sounds like the FMA want to have a big cuddle with all the poor insto's that did not understand that they were doing anything wrong.........pass me a tui

“We’re encouraging firms to be open with us, including where things have gone wrong. We are as interested in how they are remedying a problem as much as we are in what has happened,” Ms Campbell said.


Milford Asset Manipulators have pulled all their Google ads where they attempted to manipulate the public into clicking into their link.

NBR is reporting:

Milford Asset Management’s woes continue as a rival fund manager lodges a fresh complaint to the FMA about ambush marketing of KiwiSaver services.


Fisher Funds boss Carmel Fisher says she is disgusted at Milford’s apparent deliberate misuse of the Fisher brand name through a Google AdWords marketing campaign.

Milford appears to have used the Fisher name to try to attract potential customers to its own website by paying for search words.

Hence, when someone typed “Fisher kiwisaver” into Google, an ad for “Milford Fisher Kiwisaver” topped the search list with a link to the Milford website.

Similar outcomes were experienced for fellow providers Generate and ANZ’s OneAnswer KiwiSaver scheme.

Milford has pulled the campaign, which was highlighted by Cameron Slater’s Whale Oil blog yesterday.

Ms Fisher says she’s been told it has been going on for some time and is glad it no longer works.

“We’re not happy about anybody using our brand or misrepresenting our brand. And the FMA has been alerted to it. Because I don’t think the FMA likes KiwiSaver brands to be misused or misrepresented in any way. It’s really not behavior that is becoming of a professional KiwiSaver provider.”

Ms Fisher says the FMA is hot on any practices or behavior that could potentially mislead investors.

“And this is the most misleading behavior you could get really, by representing your brand as something else. I mean there is no such thing as the Milford Fisher Kiwisaver.

“So why anybody would pay for an ad with that as a headline? It’s not a genuine mistake it’s just misleading.”

[axe]

Milford Asset Manipulators have pulled all their Google ads where they attempted to manipulate the public into clicking into their link.

NBR is reporting:

Milford Asset Management’s woes continue as a rival fund manager lodges a fresh complaint to the FMA about ambush marketing of KiwiSaver services.


Fisher Funds boss Carmel Fisher says she is disgusted at Milford’s apparent deliberate misuse of the Fisher brand name through a Google AdWords marketing campaign.

Milford appears to have used the Fisher name to try to attract potential customers to its own website by paying for search words.

Hence, when someone typed “Fisher kiwisaver” into Google, an ad for “Milford Fisher Kiwisaver” topped the search list with a link to the Milford website.

Similar outcomes were experienced for fellow providers Generate and ANZ’s OneAnswer KiwiSaver scheme.

Milford has pulled the campaign, which was highlighted by Cameron Slater’s Whale Oil blog yesterday.

Ms Fisher says she’s been told it has been going on for some time and is glad it no longer works.

“We’re not happy about anybody using our brand or misrepresenting our brand. And the FMA has been alerted to it. Because I don’t think the FMA likes KiwiSaver brands to be misused or misrepresented in any way. It’s really not behavior that is becoming of a professional KiwiSaver provider.”

Ms Fisher says the FMA is hot on any practices or behavior that could potentially mislead investors.

“And this is the most misleading behavior you could get really, by representing your brand as something else. I mean there is no such thing as the Milford Fisher Kiwisaver.

“So why anybody would pay for an ad with that as a headline? It’s not a genuine mistake it’s just misleading.”


Some would consider that sort of behaviour anti competitive and unethical.

[Citizen Erased]

Some would consider that sort of behaviour anti competitive and unethical.

Adwords Trademark Policy – Using Competitors’ Names In Adwords (http://azrights.com/media/news-and-media/blog/branding/2014/11/using-competitors-names-in-adwords/)

[Daytr]

Well you just have to look at the trading in XRO before they announced a massive CR a week or two ago at quite a premium above the SP at the time.
Anything come of that?
Of course not.

[Lola]

FMA say report coming "soon".
Any views out there what it may conclude given NZ Supers move last week to suspend Miffy protem?

[sb9]

Tht bring this one to front page as nothing has been heard since beginning of the month when they said report out "soon". Wonder what's their definition of "soon", how long??

[Lola]

Tht bring this one to front page as nothing has been heard since beginning of the month when they said report out "soon". Wonder what's their definition of "soon", how long??

Damp bus ticket manufacture, and trying to understand how markets work can take a very long time. Perhaps the "File has been lost". Would not be the first time.

[Lola]

Damp bus ticket manufacture, and trying to understand how markets work can take a very long time. Perhaps the "File has been lost". Would not be the first time.

Perhaps Im right? The file has been lost.

[winner69]

All settled .... just pay $1.5m and its all sorted

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11467106

Where does the money go?

[Schrodinger]

All settled .... just pay $1.5m and its all sorted

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11467106

Where does the money go?

I don't trust the investigation and Milford. Obviously the trader did some bad stuff so I thought some jail time would be nice for ripping people off? I would also like information as to how this "trader" gamed the system. Was there a dummy account involved? You have to bear in mind that they would have this built into their employment contracts and since bad stuff has been done I expect at the minimum a trader is fired.

I also note that there were 6 portfolio managers now 5 can anyone confirm?
Would love more info before ever looking at Milford again. GL Brian.

[robbo24]

I don't trust the investigation and Milford. Obviously the trader did some bad stuff so I thought some jail time would be nice for ripping people off? I would also like information as to how this "trader" gamed the system. Was there a dummy account involved? You have to bear in mind that they would have this built into their employment contracts and since bad stuff has been done I expect at the minimum a trader is fired.

I also note that there were 6 portfolio managers now 5 can anyone confirm: http://milfordasset.com/milford-appoints-a-new-portfolio-manager/ looks to be missing. Note the alpha male concentration.

Would love more info before ever looking at Milford again. GL Brian.

Criminal investigation against the individual trader is still on-going. Perhaps you missed that part of the FMA release and/or FMA settlement deed.

It's a shame Campbell Live isn't around to moan about this type of thing for the next 6 months. Although, I'm pretty sure it would be the MBIE television debacle being rammed down our throats every night, juxtaposed with state housing tenants who demand a spa pool to spend their beneficiary-paid hours sitting in.

Perhaps you can fill that segment :D

[Xerof]

All settled .... just pay $1.5m and its all sorted

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11467106

Where does the money go? The money goes to FMA, who will now be able to reimburse Rod Petrisevic for that bottle of champagne they quaffed

[winner69]

the 'trader' was still there yesterday --- from today on extended leave

Probably a good bloke deep down and his mum proud of him

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11467106

[sb9]

Irony of this enquiry is that we're no better than what we knew y'day with regard to what actually transpired. All we know FMA is better off by 1.5ml, that's it in a nut shell. Hoped for a better insight into the enquiry than what has come out. :t_down:

[Lola]

The money goes to FMA, who will now be able to reimburse Rod Petrisevic for that bottle of champagne they quaffed

That was Close Eyes at the SFO. Not the FMA.

[Lola]

Agree. Very poor. Are the FMA not meant to be into Transparency?. And if I was a Milfie trader Id be a bit uncomfortable that this person hasn't been identified because it would always reflect on me.

[dingoNZ]

I appears Mark Warminger is no longer on the Milford website, anyone have details?

source: www.milfordasset.com/about-milford/meet-the-team/

[RTM]

Really disappointing to see this going on at such a prominent company. Undermines everyone's faith in what goes on with the market. And so soon after the collapse of our finance companies. No wonder people just want to invest in Real Estate. If that is happening there....then what about all the other companies ? Similar ? And what else happens and is not uncovered ?

Does not give me a good feeling about our market. I wonder if this was uncovered in the USA what would happen ? Would someone (s) go to jail ?

[RGR367]

The money goes to FMA, who will now be able to reimburse Rod Petrisevic for that bottle of champagne they quaffed

C'mon Guys, $1.5M is just pocket money to those who investigated the "game" while the "game" still remain a mystery. That "game" will become bigger and more mysterious later on for bigger payment to whose pockets will become bigger too. Maybe we should form a Fund Management company too :D

[Xirr]

Really disappointing to see this going on at such a prominent company. Undermines everyone's faith in what goes on with the market. And so soon after the collapse of our finance companies. No wonder people just want to invest in Real Estate. If that is happening there....then what about all the other companies ? Similar ? And what else happens and is not uncovered ?

Does not give me a good feeling about our market. I wonder if this was uncovered in the USA what would happen ? Would someone (s) go to jail ?

I think you only go to jail when you wipe $1 trillion off the market

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11465971

[Jaa]

Ridiculous we still have no idea what really happened. Milford have my KS and I expect decent disclosure not a settlement and cover up.

This page says what they are to gutless to say:
http://milfordasset.com/team_member/mark-warminger/

I guess these might be some clues:
http://www.nbr.co.nz/tags/mark-warminger

[Xirr]

nbr arent publishing any comments alluding to his identity - must be legal reasons - perhaps delete Jaa??

[minimoke]

So Brian gaynor gets a bit of the old wet bus ticket treatment. I don't know why but the name doug somer Edgar just came to my mind.

[Lola]

What opportunity do other shareholders of the companies whose share prices were manipulated, get to be recompensed for any losses suffered? They dont even know if they have been affected or not, or how much they may have lost. Full disclosure should be made, and if there are grounds for legal action, then Milford needs to deal with it. Not pay money in return for keeping it all hush hush.

Study Irish politics and you'll understand.

[Jaa]

nbr arent publishing any comments alluding to his identity - must be legal reasons - perhaps delete Jaa??

If the publisher of ShareTrader makes such a request I am happy to do so out of respect for the forum.

Otherwise why can't small investors and clients know what undoubtedly the NZ super fund and other wholesale clients knew a long time ago?

Mr Warminger was portfolio manager in charge of NZ equities for Milford's PIE Trans Tasman fund during the period investigated (December 2013 - August 2014). During this period the fund held a large number of NZ shares with its largest holding being Fletcher Building at about 5-6% of assets.

http://milfordasset.com/documents/historical-fund-updates/

Note, I have no special knowledge and am just a small investor trying to piece together what happened for my own understanding of Milford's integrity and how trading occurs on the NZX.

[Rep]

Unfortunately, pending due process, we don't really know who did what, what the actions were and if anybody lost out.

It isn't a good look for the funds management industry who have been given the blessing of a lot Kiwisaver funds to manage, lots of folk unhappy who had traditionally been happy with deposit rates looking for better returns, a competitive advantage with the tax treatment of PIEs as well as the NZ Super Funds to manage. The financial literacy of most our populace could be described as sub-optimal and this isn't going to bolster the confidence in the funds management industry particularly when all those folk with Kiwisaver funds are wondering about the people managing funds on their behalf.

[blackcap]

Smartshares should be all over this... Thats where I currently have my kiwisaver as to me its the best of a bunch of incompetents.

[Jay]

I heard the MD saying on the radio this afternoon that no funds performance was affected, they do not need to restate anything.
Also said could not say what or who etc due to the FMA still investigating the person concerned - not Milford any longer

[Xirr]

I'm only speculating here but the person concerned could have:
1. Window dressed - bid prices up on the last day of the relevant quarter - nothing needs restating because prices were what they were
2. Put in a tonne of lower than market buy orders to create the illusion of buy depth, in the hope of persuading others to buy based on the buy depth; or
3. Bought and sold to himself prior to quarter end, then let market set the last price at the end of the quarter? Not sure this is possible...

What do you think?

The FMA considers that the conduct had, or was likely to have had, the effect of causing the creation of a false or misleading appearance with respect to:

the extent of active trading in the relevant securities; or
the supply of, demand for, price for trading in, or value of those securities.

[Lola]

I'm only speculating here but the person concerned could have:
1. Window dressed - bid prices up on the last day of the relevant quarter - nothing needs restating because prices were what they were
2. Put in a tonne of lower than market buy orders to create the illusion of buy depth, in the hope of persuading others to buy based on the buy depth; or
3. Bought and sold to himself prior to quarter end, then let market set the last price at the end of the quarter? Not sure this is possible...

What do you think?

The FMA considers that the conduct had, or was likely to have had, the effect of causing the creation of a false or misleading appearance with respect to:

the extent of active trading in the relevant securities; or
the supply of, demand for, price for trading in, or value of those securities.

What I think is simple and most on this forum agree (and we aren't nutters).

Lets know the truth. This hand in glove regulatory mate- ship pathetic rotary / mason type behaviour, that the FMA and the NZX are happy to condone it seems, is just NOT good enough. What's so special about this Milfie outfit that exonerates them from full disclosure?...for Gods sakes they have been the Champion of Corporate Trustworthiness and Virginity ever since they got into the Funds Management Business (After learning the trade in the StockBroker Industry in the 1980s). Now that's a thought.

[drcjp]

Ah well, cats out of the bag guv'nor.......... http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11467883&ref=rss
Ees' not the messiah, ees' a very naughty boy............

[winner69]

Quirk was on the radio.

He/they don't get it and methinks they think they have done no wrong

When asked if it was a hefty fine ...no, it was a settlement. In other words we not guilty of anything.

Did anybody do anything wrong .....no not really, more a 'process' issue than anything else.

But that's how th industry works.

[macduffy]

He/they don't get it and methinks they think they have done no wrong


Not really - just not prepared to admit anything publicly and hoping it will all go away and be forgotten quickly!

[dingoNZ]

I've taken my KS away from them and gone with Onepath now, also taken out my funds I had in their Dynamic fund and closed it, I wouldn't trust them with my money.

[Xerof]

You only need to take a look at his 'pedigree' to understand the situation - ego and sense of entitlement written all over it

from his mugshot, looks like he has an allergy to sulphured Chardonnay

[robbo24]

Check this out - its a real eye opener. Fund managers all over are basically a bunch of crooks. Its rife throughout the industry. They simply move from one organisation to another, while any misdeeds are covered up and ignored by their bosses.

http://www.theage.com.au/business/banking-and-finance/ioofs-boiler-room-throws-customers-to-the-wolves-20150619-ghrdl6

Sounds like your every day internet forum user's behaviour... However without the large sums of other people's money to play with! :D

[Lola]

Milford have basically said "its okay, we didnt screw over any of our own clients, just other peoples"

Yep...Slater and Gordon looks a good one in this regard. Funds management is a bit like golf...its about ones next shot, rather than how many Majors one has under the sporran.

[sb9]

The name has come out finally....

https://nzx.com/regulators/FMA/announcements/267776

[axe]

The name has come out finally....

https://nzx.com/regulators/FMA/announcements/267776

Still on Milfords youtube - Poor social media management..............

https://www.youtube.com/watch?v=BKSYaDI8fn0