Milford Asset Management has written to its clients before the start next week of an alleged market manipulation case against the fund manager's portfolio manager Mark Warminger.
In a note to clients, Milford said there was likely to be some media coverage of the High Court civil proceedings in Auckland brought against Warminger by the Financial Markets Authority at the end of the month, and that it's only role in the case will be through background evidence provided by executive director Brian Gaynor.
The market watchdog is seeking financial penalties, alleging Warminger breached the Securities Markets Act by placing small trades on market in one direction, followed by large off-market trades in the opposite direction in order to set the price rather than for a genuine purpose.
Milford agreed to settle with the regulator, paying $1.5 million while rejecting any liability. The fund manager had been improving its trading systems before the FMA launched its probe, and accepted there was inadequate oversight at the time following a period of rapid growth.
The fund manager today told clients the claims don't relate to the security of their funds, which "have always been and remain safe and unaffected", and that it was confident its trading activities adhere to best practice.
