The Financial Markets Authority is accusing Matthew Hill, the CEO of NZX-listed New Talisman Gold Mines of market manipulation via anonymous posts made on an online investor forum.
The regulator has filed civil High Court proceedings against Hill.
Here's the FMA's statement.
FMA accuses CEO of market manipulation for anonymous posts on investor forum
The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko – has filed civil High Court proceedings against Matthew Geoffrey Hill, the Chief Executive Officer of NZX-listed New Talisman Gold Mines Limited (NTL), for alleged information-based market manipulation and making false and misleading representations. The case relates to anonymous posts Mr Hill allegedly made about the company on the Sharetrader website’s online investor forum.
The FMA claims that between February 2013 and July 2020, Mr Hill made dozens of posts on Sharetrader in a thread about New Talisman under two usernames, “bullish” and “Epithermal”. Mr Hill, who is also a director and shareholder of New Talisman, did not, at any point, disclose his involvement in the company, the FMA asserts in the claim. Mr Hill’s conduct was revealed in July 2020 when Sharetrader publicly identified him as the person behind the usernames.
The company, New Talisman Gold, is not party to the proceedings.
Karen Chang, FMA Head of Enforcement, said: “Market manipulation undermines confidence in financial markets, especially if it is by a senior executive at a listed company. We considered Mr Hill’s conduct warranted a strong response to demonstrate that such actions will not be tolerated, and to maintain confidence in New Zealand’s markets.”
“This case is an important reminder that information-based market manipulation can occur on social media and forums, where investors are increasingly gathering to discuss stocks. Investors should be careful when using forums to inform their investing decisions as they can be exploited by vested interests.
“We acknowledge Sharetrader’s efforts to moderate its forum and for bringing this issue to light.”
The proceedings have been filed in the Auckland High Court and the claim is yet to be served.
The FMA claim is based on two causes of action for alleged market manipulation under the Financial Markets Conduct Act 2013 and the Securities Markets Act 1988 (as some of the posts precede the implementation of the FMC Act in mid-2014) and an alternative cause of action for alleged false or misleading representations (a breach of fair dealing provisions in the FMC Act).
The FMA is seeking from Mr Hill a declaration of contraventions, a pecuniary penalty and costs.
The FMA has information for investors about market manipulation (both information- and trading-based) on its website.
Below is a response from New Talisman Gold Mines.
ANNOUNCEMENT BY NEW TALISMAN GOLD MINES LIMITED (ASX, NZX:NTL)
New Talisman Gold Mines Ltd notes the announcement recently by the FMA, and confirm we are not aware of any further details about the FMA’s claim, other than what was contained in the announcement.
This civil claim is now before the courts who will ultimately decide its merits. In the meantime it would be premature for us to prejudge the outcome.
We have previously complained to FMA and Tarawera Publishing Limited, operator of the Sharetrader website, about lack of moderation on the Sharetrader website, contrary to Sharetrader’s own terms and conditions. We remain hopeful that FMA will take appropriate action in respect of our complaints.
We continue to call for online publishers to be regulated, and proactive regulatory guidance to be issued, on the use of social media by investors, issuers, intermediaries, and other market participants and their employees.
The Company does not intend at this stage to make any further comments in relation to this matter.
And here's a statement from the Shareholders' Association.
NZSA SUPPORTS FUTURE GOVERNANCE CHANGES AT NEW TALISMAN MINES
The NZ Shareholders Association (NZSA) has been working with concerned shareholders of New Talisman Mines (NZX: NTL) for some time in relation to the conduct of its CEO, Matthew Hill, the current governance of the company and ongoing performance issues.
This has included a representation to New Talisman Mines that NZSA does not support Matthew Hill remaining on the Board of the company.
We note that today, the Financial Markets Authority (FMA) has filed civil proceedings against Matthew Hill, the CEO of New Talisman Mines, for alleged information-based market manipulation and making false and misleading representations.
This is the first information-based market manipulation proceeding brought by the FMA.
As always, NZSA has been supporting retail shareholders to ensure that their concerns are heard by the NTL Board and to advocate for board changes to support governance improvement. Today’s announcement by the FMA vindicates the position taken by NZSA and the group of concerned shareholders.
NZSA will continue to be instrumental in driving change at NTL, by continuing to work with New Talisman Mines and concerned NTL shareholders.
This is an ongoing process, and we look forward to the upcoming annual shareholders meeting of the company to be held on September 22nd. We intend to communicate more fully with all NTL shareholders prior to the meeting, to highlight governance concerns and the position supported by NZSA.
NZSA offers a free proxy service that allows retail shareholder votes to be counted, including for any upcoming resolutions at the New Talisman Mines shareholder meeting. Contact teresa@nzshareholders.co.nz for further information on this service and the registration process.
21 Comments
Fascinating, here is a link to that forum thread:
https://www.sharetrader.co.nz/showthread.php?8988-NTL-New-Talisman-Gold…
Or just openly using Twitter to boost Bitcoin. All it needs is the one or 2 people with large holding to open their mouth or someone to start a rumour and away it goes.
How do you know the BTC holdings of Twitter celebs? You don't, unless they openly share their addresses with you. We can identify bona fide whales, such as Tim Draper. Big difference between Draper and the Twitterati.
That was good advice. You'd have made far more money investing in property than in this gold mining adventure.
I can't really blame anyone for talking property up over the last twenty years, it has genuinely outperformed. It's not been a pump and dump because RBNZ and Government have acted to safeguard investors.
“This case is an important reminder that information-based market manipulation can occur on social media and forums, where investors are increasingly gathering to discuss stocks. Investors should be careful when using forums to inform their investing decisions as they can be exploited by vested interests"
Sounds like property investors on forums like interest.co.nz.
LOL and as expected, on of the property spruiker bots just happened to come up with the opposite side of what I said...
So here's the difference spelled out for you:
As a 'DGM', I'm just one of the hundreds of thousands of people with no influence over the market whatsoever. If there were only a hundred potential buyers then sure, my word could influence the market.
Compare that to someone who let's say owns a company that's main business is selling property in Palmerston North (totally just a random example I made up). Let's say he comes to this comment section to spruik up the Palmerston North property market every month or so (especially focusing on certain suburbs), is he influencing the market? Again: one DGM of a million vs the owner of one of the few companies that actually deal with property in a very specific region. Who has more influence?
The difference we have is that the entire media, banking system and political voices are all spruiking property.
Apply the same level of energy, co-ordination and effort into any other asset type and we would have the same result.
Imagine if we had such an approach to small business entrepreneurship - what an economy we might have?
This CEO affected how many and it is seen as a great achievement calling him out!! Meanwhile the real menace wonders at will, like a loose wrecking ball on NZ inc, but untouched.
"Property defend NZ" The god we now have.
The FMA took their sweet time to reach this point, but I'm very glad they have. This company has been an incredibly effective destroyer of other people's money while the CEO has been anonymously drumming up support for their series of capital raises.
Note that the company is still trying to raise capital right now as they split the company into different components to keep people interested. This announcement is another red flag for anyone considering participating.
I take it anyone who reads financial threads knows the definition of DYOR?
DO YOUR OWN RESEARCH!
Anyone can say anything they like online, if you make the financial decision to invest your hard earned money in something, then you and you alone are responsible for what ultimately happens.
This is true, but it doesn't excuse Matt Hill for his actions. The company is listed on the NZX and has a set of rules to follow and must follow the relevant legislation - this is not the Wild West of Crypto.
What is particularly galling is the company was (and still is) very poor at communicating with shareholders and being clear about what is going on at the company, while at the same time Matt was apparently spending his time engaging in petty battles on Sharetrader.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.