The Financial Markets Authority (FMA) says it has filed criminal proceedings against a junior Heartland Bank employee for alleged insider trading relating to the buying and selling of shares in Heartland Group Holdings [HGH].
The FMA alleged in a media release on Tuesday about the criminal proceedings that the former Heartland Bank employee traded, and encouraged others to trade or hold Heartland shares on several occasions between July 2020 and February 2021.
The FMA says during this period, the individual was holding material information "that was not generally available to the public and the individual also disclosed material information that was not generally available to the public to others".
The individual was a junior Heartland Bank employee at the time of the alleged offending and the matter was first referred to the FMA by the NZX’s frontline regulator NZ RegCo in December 2020.
Heartland, which is listed on the NZX, told the stock exchange on Tuesday morning that the individual was a former junior Heartland Bank employee – but didn’t say when the individual’s employment with the bank had ended.
Heartland Chief Executive Officer Jeff Greenslade and Heartland Chair Greg Tomlinson wrote in an NZX announcement that Heartland took its responsibilities as a listed company very seriously.
"That includes having policies and procedures in place to ensure Directors and employees at all levels understand their obligations under insider trading laws," they said.
Greenslade, Tomlinson and the FMA said Heartland and Heartland Bank were not parties to the FMA proceedings and had cooperated with the FMA during its investigation.
The FMA said the individual appeared in the Auckland District Court on Tuesday.
Criminal insider trading can be punishable with up to a term of imprisonment not exceeding five years, a fine not exceeding $500,000, or both for individuals.
Heartland reported its June-year earnings in August, where it was revealed that the bank had missed its full-year earnings guidance and declined to provide any for the June 2025 year.
The bank reported an annual net profit after tax of $102.7 million, on an underlying basis, which was a 4.9% shortfall to Heartland's own guidance.
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