Broking row escalates to Securities Commission

A SHAREMARKET ruckus involving a top sharebroker led to a $12,000 fine from NZX on Monday, but it may not end there.

The Sunday Star-Times understands that while the NZX disciplinary tribunal penalised the firm for four breaches of market trading rules, a further complaint has been laid with the Securities Commission.

Concerns raised with the commission are believed to include the potential for market manipulation, an issue beyond the jurisdiction of the NZX.

The rule breaches took place in June and involved a broker making delayed reports to the market of several trades, and in one case reporting a price "inconsistent" with the actual trade.

NZX rules require immediate and accurate reporting of share trades, in practice typically within one minute, but the delays in this case were as long as 38 minutes.

These delays, said the tribunal, "had the potential to undermine both investor confidence and market integrity".

The broking firm involved was not named by NZX as the rule breach was classified as relatively low level, but the Star-Times understands it was First NZ Capital, regularly the biggest trader in the market. The issue came to light by chance as traders contacted clients to deal stock and documents seen by the Star-Times reveal an angry email exchange when it was discovered.

"If you have sold any FBU [Fletcher Building] at 632 then perhaps you might want to cross them, [report them to the market]" said one.

Rival: "Seriously, go focus on something relevant."

Trader: "You are a f****** mate – go report at the proper price – that is what's relevant." A further comment described his counterpart as a "weasel".

- © Fairfax NZ News