Plus SMS cleared of insider trading

Two years after its conclusion the Securities Commission has finally revealed the results of its investigation into Plus SMS, clearing insiders at the company of insider trading but remaining non-committal on possible related market manipulation.

For a number of years the text messaging marketing company was the dominant stock on the NZAX small cap market, which rose and fell sharply in parallel with its fortunes.

However, the company's value collapsed in September 2006 after it admitted making incorrect statements to the market, prompting the commission's inquiry.

Yesterday the commission said it considered the findings of its investigation back in 2007.

"Company announcements made various claims about the benefits of contractual arrangements in circumstances where the company itself did not know whether the contracts in fact held any value," the commission said.

However, it found there was no evidence of trading by insiders during the relevant period and there was no evidence of an intention on the part of Plus SMS directors to deceive or mislead the market.

The commission didn't investigate any possible market manipulation, "since no relevant law regarding such behaviour was in effect until February 29, 2008". The commission indicated it had published its findings as a result of "recent events" concerning the company.