Person pleads guilty to insider trading

Tuesday 11 April 2017 04:29 PM

Person pleads guilty to insider trading after confidential Eroad data used to trade shares

By Jonathan Underhill

April 11 (BusinessDesk) - A person has pleaded guilty in the Auckland District Court to a single charge of insider trading after an employee of Eroad, the logistics and fleet management software developer, texted confidential company information to a former staffer who then traded 15,000 shares.

The person, who has interim name suppression, pleaded guilty to a charge under section 243 Financial Markets Conduct Act - namely, "being an information insider advising or encouraging another person to trade."

That defendant will be sentenced at the court on June 13, the Financial Markets Authority said in a statement. The other person involved faces one charge of insider trading under section 241 Financial Markets Conduct Act – namely, "information insider must not trade". That defendant is yet to appear before the Court.

The confidential material information related to Eroad’s performance in the period ended Sept. 30, 2015. Eroad, posted a profit of $611,000 in the six months ended Sept. 30, 2015, from a year-earlier loss of $1.9 million. Sales jumped 55 percent to $12.2 million.

The FMA said it agreed to withdraw two obstruction charges under section 61 of the FMA Act.

“We are satisfied with this outcome. While obstructing the FMA is treated seriously, in this instance we have achieved our regulatory objectives with the defendant’s guilty plea to insider trading," said the FMA’s general counsel, Nick Kynoch.

Eroad shares last traded at $2, having sold at $3 apiece in its 2014 initial public offering. The shares traded as high as $4.19 in March 2015 before slumping to $2.66 as at Sept. 30, 2015.

(BusinessDesk)

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