Time to demand Milford Asset Manipulators to hand back their awards?

Brian Gaynor’s Milford Asset Management woes appear to be getting worse.

A probe into alleged illegal share trading at high profile fund manager Milford has increased in scope to embrace two major stockbroking firms, sources say.

It is understood that investigators from the Financial Markets Authority demanded further records from Milford Asset Management and the brokers about 10 days ago.

The records are said to include emails and text messages.

Milford, manager of about $3 billion on behalf of KiwiSaver investors, the Super Fund and other institutions, outed itself as the subject of an FMA probe on February 9 after a crescendo of speculation in the market.

“The investigation concerns an individual trader employed by the firm and certain specific trades,” it said.

The FMA has declined to comment on the investigation or its scope, but the stock exchange has confirmed it involves allegations of market manipulation. ?

The allegations have serious implications for a fund manager, including the potential for fund performance to be artificially boosted in order to garner performance fees and attract funds.

Milford has won numerous awards for its fund performance, including equities fund manager of the year five years in a row.

Market sources have said they understood the investigation had begun around August last year and initially involved a relatively small number of trades.

However, the investigation is believed to have extended to cover trading going back to December 2013, requiring analysis of a large quantity of trading data.

If evidence is discovered indicating share prices may have been manipulated, the FMA will want to find out how much brokers knew of the activity, sources say.

“This is a massive game of high stakes poker,” said one.

I wonder how long the NZ Herald will maintain him as a columnist? Or how long NewstalkZB will run his ads and commentary?

More importantly how long will the NZ Super Fund continue to do business with them?


– Fairfax.