Milford trader under FMA investigation

[UPDATED] NZX confirms it referred the matter to FMA

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 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. 

Founded in 2003 by Brian Gaynor, Milford has grown rapidly in recent years and has won several awards.

Mr Gaynor also writes a business column in the NZ Herald on Saturdays often attacking poor corporate governance.

Milford manages wholesale Australasian equity mandates for large investors. It also has a New Zealand equities mandate for the New Zealand Superannuation Fund. 

It is understood Milford approached the FMA about making a statement today, given the speculation in the market.

Several fund managers had contacted NBR to say it wasn’t them under investigation.

Meanwhile, NZX has confirmed it made a referral to the FMA outlining the subject of the investigation.

"The matters of the investigation remain confidential. NZX will not be commenting further at this stage."

However, the stock exchange operator would not say when it made the referral or what time period it referred to.

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