The Role of Trader Purpose in New Zealand’s Market Manipulation Regime: FMA v. Warminger
33 Pages Posted: 12 Jul 2019
Date Written: July 5, 2017
The decision of Financial Markets Authority v Warminger  NZHC 327 is now the leading case on trade based market manipulation in New Zealand. This paper focuses on Venning J’s interpretation of s 11B of the Securities Markets Act 1988, in that case. His Honour concluded that “trader purpose” is a relevant consideration when establishing a breach of s 11B, despite there being no mention of trader purpose in the wording of the provision. This paper seeks to re-evaluate Venning J’s assessment of the legal requirements under s 11B, by way of a statutory interpretation exercise. While such exercise confirms that trader purpose is indeed a relevant consideration to establishing a breach of s 11B, this paper also challenges his Honour’s method of assessment of trader purpose. An alternative framework to be used in the assessment of trader purpose is proposed. The trader purpose analysis and the proposed framework will continue to be relevant under the recently-enacted Financial Markets Conduct Act 2013.
Keywords: 'Financial Markets Authority v Warminger', 'market manipulation', 'trader purpose', 'Securities Markets Act 1988”, “Financial Markets Conduct Act 2013'
JEL Classification: K00
Suggested Citation: Suggested Citation