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Sharebroker ABN AMRO Craigs has been fined by the stock exchange for breaching trading rules.
In a statement to the exchange, NZX Discipline, a body independent of the NZX which rules on matters of market conduct, described the breach as "a serious matter" even though no investor would have been financially disadvantaged.
Two ABN AMRO Craigs client advisers are required to pay a penalty of $10,000 and $7000 respectively after trading in shares last year without gaining authorisation from the firm's compliance manager. Some of the trading activity in question came after repeated warnings from the firm.
ABN AMRO Craigs managing director Neil Craig said the issues were of a procedural and technical nature and occurred over a year ago.
"No one has been disadvantaged and [there was]certainly no public inconvenience to anybody." He said the firm had since moved its 110 advisers from a manual to an automated approval system which ensured similar breaches would not occur.
Craig confirmed the staff were still employed by the firm.
ABN AMRO Craigs was fined $20,000 for not having sufficient controls in place to prevent the breaches and inadequate disciplinary action when it uncovered the actions of its advisers. The firm's own compliance monitoring picked up the advisers' actions.
"However, NZX Discipline considers the controls in place at the firm were not sufficient to prevent the repeat breaches occurring nor did the subsequent action taken by the firm in warning and reprimanding the advisers prevent those advisers from committing further breaches of the rules," the NZX announcement said yesterday.
In July the NZX Discipline panel's annual report showed that two broking firms and their advisers paid large sums of money to the NZX this yearfor breaches of stock exchangerules.
The firms and advisers involved were not named but the cases involved settlements of $161,000 and $80,000.
The larger of the settlements is understood to relate to the allocation of Rakon shares at the time of its float. An NZX firm and unnamed advisers took the highly sought-after stock for themselves rather than offering it to clients.
That breach of broking rules resulted in a penalty of $111,000 to nullify the profits the brokers made participating in the IPO. A further $50,000 was imposed as a penalty.
In the other case, understood to relate to the trading of shares in New Zealand Oil and Gas, an NZX firm and an adviser were penalised $10,000 and $70,000 respectively for "placing an order on behalf of a client to influence the closing price of a security".
