A Forsyth Barr broker has been fined $15,000, and the company fined $30,000, after she allegedly failed to detect market manipulation by a client, the stock exchange operator said.
Forsyth Barr was also alleged to have failed to put in place active trade monitoring processes to detect and deal with unusual trading patterns, NZX said.
The trading took place between June 2006 and July 2007 by a client of Nola Norton, who gave phone orders to trade in certain shares.
NZX investigated in June 2007, and established that the client was mainly a seller in the shares but sometimes bought small parcels of the stock on the same day of a sale.
Those purchases typically followed other purchases rather than preceding sales orders, were for smaller volumes than those previously sold, and in some instances occurred close to the end of the day's trading.
Ms Norton assessed the effect each trade was likely to have on the market before placing the orders, but she should have asked why the client was making the purchases, and referred the orders to Forsyth Barr's compliance officer, NZX said.
She accepted that the failure to do that was in breach of NZX's rules of good broking practice, and Forsyth Barr accepted that it could have done more to make sure employees were familiar with its rules around market manipulation.
NZX, Forsyth Barr and Ms Norton reached a settlement, including the fines and that NZX Discipline reprimand the company and broker.