But Moffat said that publicly censuring someone had a "punitive effect" and that it wasn't necessary in this particular case. According to the FMA, the person warned had traded with themselves.
"The FMA has reached the view that the person engaged in trading that resulted in no change in beneficial ownership in the shares they traded. This is presumed to be market manipulation under the Securities Markets Act," the market watchdog said.
The type of conduct the person engaged in is known as "bait-and-switch trading".
"The FMA considers that the trades were likely to have the effect of creating a false or misleading appearance about the extent of active trading in, supply of, price for, or value of the shares traded.
"Such conduct may attract other traders into the market. This type of conduct is also prohibited under the market manipulation prohibition provisions in the Securities Markets Act."
The regulator noted that the trading occurred over a short period of time, provided no significant personal gain for the person involved and was conducted on an online platform which did not offer guidance on prohibited activity.
The FMA last August concluded its first market manipulation case against Brian Henry, which resulted in the Diligent founder paying a $130,000 penalty.
The following month the regulator said it was probing two possible instances of insider trading and market manipulation.
Bait and switch trading
• This involves a trader placing an order away from the market price to try to encourage others to enter the market at the different price. This is known as the bait.
• When the trader sees activity in the market, they would either not complete the orders or only do so for a small number of shares.
• They would then look to trade at a more significant level once the price has moved.
