Pushpay insider trading case: Individual found guilty

Name suppression for defendant found guilty of insider trading. Photo / NZME

The person at the centre of the Pushpay insider trading case has been found guilty in Auckland High Court today.

The individual, who has name suppression, was found guilty by a jury following a four-week trial.

A second, civil, proceeding involving the guilty individual and another person was also filed in the High Court.

The criminal charge carries a maximum penalty of five years in jail, a fine of up to $500,000, or both.

Both proceedings centre around the resignation and sell-down of shares of former Pushpay co-founder and director Eliot Crowther in June 2018.

The Financial Markets Authority (FMA) considered Crowther’s intention in this regard to be material information, which, if generally available, would be likely to have a material effect on the price of Pushpay’s shares at the time.

The FMA alleged that the individual knew of, and used, that information to advise or encourage others to trade in the lead-up to Crowther’s announcement.

Crowther’s trading was legitimate, and neither he nor Pushpay was a party to the proceedings.

FMA head of enforcement Margot Gatland said insider trading was a serious offence that undermines investor confidence in the New Zealand markets and gives individuals an unfair advantage.

“The guilty verdict demonstrates the serious consequences for advising or encouraging others to trade when in possession of material information, not generally available to the market.

“The individual took advantage of knowledge they gained as a member of Pushpay’s senior leadership team to assist those who they advised or encouraged to avoid potential losses,” she said.

“The FMA takes all insider conduct cases seriously and will take enforcement action where it considers misconduct has occurred. Taking such cases assists in the promotion of confident and informed participation of the financial markets and promotes fairness, efficiency, and transparency in those markets.”