Mark Stephen Talbot, a former virtual chief financial officer of VMob (now Plexure) will pay $150,000 in lieu of a penalty and is barred from acting as a director or manager of a listed business for 5 years. Mr Talbot has admitted to insider trading conduct and entered a guilty plea on a representative charge for a breach of disclosure obligations at Auckland High Court last month.
Mr Talbot was virtual CFO of VMob from 2011 until 2014. Following a referral from the NZX in September 2014, the Financial Markets Authority began investigating potential insider trading.
The investigation related to the purchase of VMob shares shortly before an announcement that VMob had been awarded a contract with McDonald’s Japan, projected to yield significant revenue to the company.
Mr Talbot has entered a guilty plea to one representative charge of failing to disclose a relevant interest, admitted a breach of the Securities Markets Act 1988 (SMA) and given an enforceable undertaking which has been accepted by the FMA in accordance with sections 46 and 46A of the Financial Markets Authority Act 2011 (FMA Act).
As part of the enforceable undertaking, Mr Talbot accepts that:
- at the relevant times, he was required to comply with the SMA in his capacity as an information insider and/or officer of a listed issuer, being VMob;
- that he traded, by purchasing, 1,000,000 shares in VMob on 24 July 2014.
Mr Talbot admits that:
- he had information that VMob was likely to be awarded the contract with McDonald’s Japan during all relevant times when he traded in shares in VMob on 24 July 2014;
- the information was material information that was not generally available to the market, and which he received in his capacity as a senior manager of VMob;
- he knew that the information was material information that was not generally available to the market until the announcement to the market was made on 11 August 2014;
- having traded in shares in VMob on 24 July 2014 he has contravened section 8C of the SMA.
Mark Talbot was one of the people responsible for ensuring VMob employees knew about the company’s trading policy. Despite this, he bought shares while in possession of material information he gained through his job as virtual CFO.
While the charges of insider trading have been withdrawn, Mr Talbot has accepted it is no defence to state that the shares he purchased through his company, Blumau, on 24 July 2014 were held for the benefit of his father.
Karen Chang, FMA Head of Enforcement, said: “Maintaining market integrity is core business 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 Mr 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.”
“We always consider the public interest in determining the best outcome for enforcement actions. Where it’s possible to achieve our objectives without the need to spend time and public resource in lengthy court proceedings, then we will do so on the merits of each case, particularly where the final outcome would be less certain and subject to the risks of litigation process.”
“In this case, Mr Talbot’s acknowledgement of responsibility through the guilty plea and the enforceable undertaking were important factors in this resolution.”
Vmob/Plexure was not part of the FMA’s investigation and has not been charged with any offence. The company cooperated fully with the FMA during its investigation into Mr Talbot.