supreme Court Confirms Insider Trading Conviction of Businessman Peter Huljich
WELLINGTON, New Zealand – The Supreme Court of New zealand has definitively upheld the conviction of businessman Peter Huljich for insider trading related to the sale of Pushpay Holdings shares in 2018.This decision,delivered Wednesday,marks the end of Huljich’s legal challenges following a case brought by the Financial Markets authority (FMA).
Huljich, a member of the prominent Auckland Huljich family and son of huljich Wealth Management founder Christopher Huljich, was initially convicted in August 2023. He afterward lost appeals to both the High Court regarding name suppression and the Court of Appeal concerning his sentence. The Crown had appealed the original sentence of six months’ community detention and a $100,000 fine, which the Court of Appeal increased to $200,000.
Despite maintaining his innocence throughout the proceedings, Huljich’s application for leave to appeal to the Supreme Court was dismissed. The court acknowledged the importance of clarifying the legal approach to insider trading under the financial Markets Conduct Act, but ultimately found insufficient grounds to believe the Court of Appeal had erred in its assessment of the details’s materiality.
Understanding Insider Trading and the pushpay Case
Insider trading involves using non-public, material information to gain an unfair advantage in the stock market. It’s illegal as it undermines investor confidence and the integrity of financial markets. The FMA actively investigates and prosecutes such cases to ensure a level playing field for all investors.
The case centered around information shared by Pushpay co-founder Eliot Crowther in April 2018. Crowther informed Huljich of his intention to leave the company and sell his approximately 9% stake. Subsequently,a trust holding Pushpay shares – not Huljich directly – sold those shares on the NZX at an average price of $4.21 before Crowther’s departure and the subsequent book build sale of his shares at $4.04.
The FMA alleged that Huljich advised or encouraged the trust to sell, anticipating that crowther’s exit would negatively impact the Pushpay share price. Huljich countered that he merely relayed instructions from the trust’s beneficiary and that Crowther’s planned departure wasn’t considered material information likely to affect the share price.The courts disagreed, finding Huljich culpable for utilizing inside information.Key Details & Context:
The Correction: It’s crucial to note the conviction did not relate to Huljich personally selling shares. The shares were sold by a trust. This point was clarified by an amendment to earlier reporting.
Huljich Family Background: Peter Huljich and his father founded Huljich Wealth Management, a accomplished firm later acquired by Fisher Funds.
Materiality of Information: A central point of contention throughout the case was whether Crowther’s planned departure constituted “material information” – information a reasonable investor would consider significant when making investment decisions.The courts determined it did.
Ongoing Significance: This case serves as a significant precedent for future insider trading investigations in new Zealand,reinforcing the FMA’s commitment to market integrity.
