Former healthcare firm chairman admits insider trading

The former chairman of natural healthcare products company Promisia Integrative must pay $75,000 to the Financial Markets Authority after admitting to insider trading and breaching director’s disclosure obligations.

Eoin Malcolm Miller Johnson, who is just the second person in New Zealand to admit to insider trading, has also been barred for five years from acting as a director, senior manager or consultant for a listed company or any entities regulated by the FMA.

Johnson made the admissions and agreed to pay the sum as part of an enforceable undertaking given to the FMA. He will also resign from all directorships he has not already resigned from, except for his personal and family investment companies — Aratas Consulting Services Limited and Halland Investments Limited — which are not regulated by the FMA.

The sanctions, including admissions of breaching trading laws, payment in lieu of a penalty and management ban, mean that a court proceeding is unnecessary.

Johnson’s admission follows Mark Talbot, a former executive of NZXlisted tech company VMob, now Plexure, who admitted insider trading conduct and entered a guilty plea on a representative charge for a breach of disclosure obligations in the High Court at Auckland in April.

Johnson committed the breaches between June and August 2016, shortly after he resigned as a director and the chairman of Promisia. As a former director and chairman, he possessed sensitive sales information, which had not been disclosed to the market, when he acquired more than 2.5 million shares for $45,950 in Promisia, the FMA said in a statement. When the announcement of a 600 per cent sales increase for Promisia was made to the NZX on 30 August 2016, Promisia’s shares increased nearly 27 per cent in one day, the most significant shift in the company’s share price across 2015 and 2016.

Promisia was not part of the FMA’s inquiry. The company co-operated fully with the FMA during its inquiry.