The Financial Markets Authority has closed its two-year investigation into trading in Xero shares, concluding there was no insider trading ahead of a capital raising announcement.
Source: 1 NEWS
The regulator began investigating in September 2015 after a referral by NZX in June that year.
Despite no price sensitive information being released to the market, shares in the software developer spiked in the lead-up to the February 25 announcement that the firm had raised $147 million from North American investors.
The FMA wouldn't comment on the case while it was still investigating, but today said it had investigated three offshore institutional investors referred to it by the NZX after unusually high volumes of the shares were traded and the price rose sharply prior to the announcement.
The regulator quickly established trading by two of those hadn't been insider trading, but launched an investigation into the third, which has now been concluded with no evidence of insider trading being found, it said.
All of the trading under investigation involved contracts for difference (CFDs), which are derivative products.
Three overseas financial regulators assisted the FMA in obtaining information about the trading parties, including tracing the source of the buying through intermediaries, it said.
Xero yesterday announced it will de-list from the NZX in favour of the Australian stock exchange. Its shares are down 2.4 per cent to $32.61 but have gained 91 per cent this year.