Ex-Deloittes partner admits insider trading
A former partner at one of New Zealand’s biggest accounting firms has admitted insider trading.
Mark Stephen Talbot, who was a partner at Deloitte New Zealand until 2017, appeared for sentencing in the High Court at Auckland yesterday, on a representative charge of failing to disclose a relevant interest.
He had already agreed to pay $150,000 in lieu of a penalty, been barred from acting as a director or manager of a listed business for five years, and publicly admitted insider trading conduct.
In exchange for these steps, an insider trading charge laid under the Securities Act was withdrawn. The maximum penalty for that was $300,000 or five years in prison but the regulator said it seemed unlikely such a heavy sentence would result if he were found guilty – New Zealand’s first insider trading case resulted in a sentence of six months’ home detention.
Talbot was ‘‘virtual chief financial officer’’ of VMob, now Plexure, from 2011 until 2014.
The NZX referred concerns to the Financial Markets Authority (FMA) in 2014.
Its investigation related to the purchase of VMob shares just before an announcement that the company had been awarded a contract with McDonald’s in Japan, which was expected to mean a big earnings boost.
Talbot bought a million shares when he knew VMob was likely to get the contract – information that was not generally available to the market.
FMA head of enforcement Karen Chang said it was a good outcome for the regulator. Having a criminal conviction would be a significant blow to Talbot, she said.
If the insider trading charge had gone to a jury trial, the process would have been expensive and the outcome uncertain, she said. The court process provided less of an education opportunity for the wider market.
Chang said the regulator had to look at the outcome it wanted to achieve and compare what was offered in the resolution package.
It had wanted to hold Talbot to account and send a strong deterrent message that the behaviour was unacceptable.
‘‘Maintaining market integrity is core for the FMA. Unethical trading and a disregard for disclosure obligations erode investor confidence in our markets at a fundamental level.
‘‘The FMA is satisfied this resolution is a proportionate and appropriate response to Talbot’s misconduct. We have met our regulatory objectives in holding the individual to account for their misconduct, censuring the particular offences and providing important lessons to the market on the application of the law,’’ she said.