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Second NZX adviser fined over rule breach related to Trade Me IPO

A second unnamed NZX adviser has been fined over a rule breach related to auction site Trade Me's $363.5 million initial public offering last December.

The adviser must pay $16,000 to the NZX Discipline Fund, plus costs, the regulator says in a statement. The breaches relate to both the Trade Me and Summerset IPOs last year.

NZX regulation says the adviser had developed a personal relationship with a client which under the rules makes the client a prescribed person, meaning they would need written authority from the firm to participate in the offer.

In October 2011, the adviser lent the client $42,000, which the client used to buy 30,000 shares in the Summerset IPO. The client sold the shares in November and used the funds, plus some of their own, to buy 18,700 shares in the Trade Me IPO.

In December the client transferred 15,000 Trade Me shares to the adviser via an off-market transfer. NZX Regulation says mitigating factors were that no client suffered a direct loss as a result of the breaches and the adviser has since faced disciplinary action from their firm.

Last week an unnamed adviser was fined $10,000 settlement after being found out on a backroom deal to get Trade Me shares during the IPO.

That adviser used a client to get their hands on 1500 Trade Me shares in the IPO.

The Trade Me IPO allowed ailing Australian publisher Fairfax Media to sell down its holding and used the funds elsewhere in its business.

The shares sold at $2.70 in the IPO. They last traded at $4.03, having gained 49 percent from the initial sale price.

UBS New Zealand was the sole lead manager and underwriter of the float.

(BusinessDesk)

Comments and questions
4

So when do we hear how many Fonterra staff insider traders there have been?

Reads to me like the two cases are related. Too coincidental. What does that tell us about the NZX firm's compliance process and ethics?

Yet the NZX will not name the firm and the advisors!

As for no client being hurt, that ios a huge cop-out as some clients have missed out on their allocation of IPO shares.

Shame on you, NZX.

So non NZX advisors can apply for shares - so what is the value in being a NZX advisor vs a AFA ?

C'mon NBR, it's not like you to tolerate a regulator refusing to release the name of the wrong doer. $16k is peanuts for these guys, so without naming where is the discipline here? At least name the firm...