Wei (Walker) Zhong and Lei (Regina) Ding have been found to have contravened the Financial Markets Conduct Act 2013 in relation to the trading of Oceania Natural Limited (ONL) shares.
In 2019 the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko issued civil pecuniary penalty proceedings in the Auckland High Court against four individuals in relation to trading of ONL shares between April 2016 and April 2017. ONL listed on the NXT board on 31 March 2016, delisted on 29 June 2018 and was placed into liquidation on 18 June 2019. The trial concluded on 9 March 2022.
, Justice Michael Robinson said he was satisfied that Mr Zhong, the executive chairman and chief executive of ONL, and/or Ms Ding, the sales and marketing manager and marketing director of ONL, contravened all seven market manipulation causes of action brought against them. The Judge was also satisfied that Mr Zhong and/or Ms Ding contravened seven disclosure causes of action.
A hearing will be held at date to be set to decide on the level of penalties for Mr Zhong and Ms Ding.
Margot Gatland, FMA’s Head of Enforcement, welcomed the decision. She said: “The FMA has no tolerance for misconduct of this nature as it can significantly undermine the integrity of New Zealand’s markets and investor confidence.
“Equally, our market disclosure obligations are part of an overall disclosure regime that is the central tenet of transparent markets. Directors should remain aware of their disclosure obligations, especially when trading their own company’s shares.”
The two other individuals – Zhongyang (Sean) Meng and Jiashun (Sam) Qian – admitted their wrongdoing in connection to the proceedings and pecuniary penalties of $180,000 and $130,000 respectively in March 2022.
Market manipulation is prohibited by section 265 in the Financial Markets Conduct Act, while the relevant disclosure obligations in this case are contained in section 297.
The contraventions by Mr Zhong, Ms Ding or both can be found in the judgment:
