Milford Asset Management

Another lecture on ethics from the ethically challenged St. Brian Gaynor

You have to wonder how Brain Gaynor keeps his column in a shabby tabloid rag each week.

But there he is once again banging on about something that other people and companies should do but one that he himself isn’t doing.

Brian Gaynor is a weapons grade hypocrite.

The election of directors will be one of the most important issues during the upcoming annual meeting season.

Should our listed companies have more women directors? What is the appropriate mix of executive and non-executive directors? Should the chief executive be a director? Are New Zealand companies doing enough to find and develop new directors?

The Australian Council of Superannuation Investors (ACSI), whose members hold an average 10 per cent of the largest 200 ASX companies, launched a major initiative last week that “aims to lift the representation of women on the boards of ASX companies to at least 30 per cent of all directors by the end of 2017″.

[…]

[O]ne of the biggest issues facing New Zealand business is the recruitment and development of new directors.

The 16 companies in this survey have appointed only eight new directors in the past 12 months. This is a very low number, particularly as 72 new directors have been appointed to ASX 100 companies in the 12 months prior to the survey.

A number of observations can be made about these eight new NZX company directors including;    Read more »

Took eye off the ball?

Gee the Herald goes soft on their columnist today, suggesting that after copping a $1.5 million dollar fine from the FMA that Brian Gaynor’s Milford Asset Management merely took their eye off the ball..

Milford Asset Management’s directors have accepted they took their eye off the ball while a portfolio manager carried out alleged market manipulation that sparked a high-profile regulatory probe and a $1.5 million settlement with the Financial Markets Authority.

The FMA yesterday revealed the results of a lengthy investigation into trading activity at the Auckland-based investment firm, which has more than $3 billion under management, including KiwiSaver funds.

Milford has agreed to a $1.5 million settlement, $1.1 million of which will go to the Crown, with the balance covering the costs of the regulator’s probe.

The portfolio manager, whom the company and FMA will not name, is still facing enforcement action and was yesterday placed on extended leave.

Under the Financial Markets Conduct Act, someone convicted of market manipulation can be jailed or fined up to $500,000.

The headline is an understatement!

Pity the regulator was so soft. It should have been $15 million in fines.

If it comes out, as I expect it will, that the trader was skimming a margin to the house account, doing what is known in the trade as “bed & breakfast trading”, the Board will have known, as they will have seen the resulting profits.

It isn’t hard to work out who the “trader” is either…he is the only one missing from their web page and a quick check of cached copies of their website shows that.   Read more »

Brian Gaynor’s Milford Asset Management slammed with $1.5M fine

The NZX has announced a massive fine of $1.5m against Brian Gaynor’s Milford Asset Management.

The Financial Markets Authority (FMA) has completed its investigation into certain trading activity between December 2013 and August 2014 by a trader employed by Milford Asset Management Limited (Milford). The FMA considers that the trading conduct breached the market manipulation prohibitions in s11B of the Securities Markets Act 1988. The FMA also concluded that the Milford Board failed to ensure that there was the requisite degree of monitoring of the trading activity.

The FMA considers that the conduct had, or was likely to have had, the effect of causing the creation of a false or
misleading appearance with respect to:
• the extent of active trading in the relevant securities; or
• the supply of, demand for, price for trading in, or value of those securities.

As Milford is the relevant trader’s employer, the FMA considers that Milford is liable for the trader’s alleged breaches of the Act. Milford denies that it is liable for any alleged breaches. The FMA acknowledges that its conclusions have not been tested in court.    Read more »

Does anyone else think that Brian Gaynor banging on about transparency is a sick joke?

Brian Gaynor still has column in the NZ Herald, despite his company being under investigation for manipulating markets, and despite the Guardians of the Superfund pulling their warrant, for want of a better term.

The Herald seems to think his columns are just fine, and NZME. thinks his continued pushing of Kiwisaver ads on NewstalkZB is fine to.

Today’s column though is just taking the piss. He is banging on about transparency.

One of the major issues raised by the Ports of Auckland wharf expansion controversy is whether Auckland ratepayers have greater transparency and more influence over the company than they did when it was listed on the NZX.

Similar transparency and influence issues can be raised regarding Air New Zealand, Genesis Energy, Meridian Energy and Mighty River Power, all NZX listed and more than 50 per cent owned by the Crown.

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Milford – understanding the problem

So then, the NZ Super Fund dropped a nuclear bomb on the NZ financial markets late last week, by suspending Milford Asset Management from overseeing funds on behalf of the NZ public. This can only been seen as bad news for Milford as the FMA is due to report back on their enquiries soon. Clearly, the NZ Super Fund are expecting bad news for Milford.

We have also been forwarded a “panic stations” email from Milford to their clients, outlining how the allegations do not affect KiwiSaver funds. While this may be the case, there may yet be questions to answer on pumped up performance fees charged to Milford clients (which might also include their Kiwisaver clients), as the allegations over asset manipulation may have meant fund managers got extra money, paid for by their clients.

There are however, a number of things that need to be pointed out and deserve reinforcement.

Firstly Milford have claimed in a number of communications to the press that the investigations over asset manipulation relate to an “individual trader” at Milford, over “specific trades”.

This is misleading on Milford’s part. They do not employ anyone called a “trader”.  You can go see for yourself. Click through the various divisions of Milford to see all their staff members. No-one is called a trader. They do have a “dealer”, but this person only joined Milford in November of last year, well after the alleged manipulation took place.

What they are trying to mislead the public over is that the allegations may in fact apply to a Portfolio Manager, or perhaps a Private Wealth adviser. This changes the story materially. Portfolio managers or Private wealth advisers are big fish. They are the kinds of people who would give instructions on which shares, bonds and other financial products should belong in either an individual portfolio, or a large fund. They also stand to benefit from performance gains in portfolios with outperformance fees.   Read more »

Herald continues to keeps Milford columnist when NZ Super suspends them

gaynor

Yet again, Brian Gaynor of the besieged financial firm Milford Asset Management has his weekly column published in the NZ Herald, despite the NZ Super Fund taking the unprecedented step of suspending Milford from running any investment mandates for them.

You will recall the FMA is investigating Milford Asset Management staff and transactions for alleged manipulation of share prices for their fund and personal gain.    Read more »

Milford Asset Management are blaming “the web guy” – not taking responsibility

Milford Asset Management says it has contacted other KiwiSaver fund managers to explain an “inadvertent breach of conventions” in Google search terms used for marketing purposes.

This comes after rival fund manager Fisher Funds lodged a complaint about Milford’s use of its brand in a so-called “ambush marketing” campaign where it used other KiwiSaver providers’ names to try to attract potential customers to its own website by paying for search words.

Hence, when someone typed “Fisher kiwisaver” into Google, an ad for “Milford Fisher KiwiSaver” topped the search list with a link to the Milford website.

“It has never been our intention to use such tactics in our marketing,” Milford managing director Anthony Quirk said today.

Except that you were.   And this is yet another incident in Milford Asset Management’s murky existence.  You have to love it – a business that depends on trust more than most, and they simply don’t appear to care unless they’re caught.   Read more »

A win for the Whale…Milford pulls its ambush marketing

Weekend readers will have read the article covering the unethical behaviour of Milford Asset Manipulator’s ambush marketing of its competitors here.

The Whaleoil army can wave a victory flag this afternoon.

Milford Asset Manipulators have pulled all their Google ads where they attempted to manipulate the public into clicking into their link.

NBR is reporting:

Milford Asset Management’s woes continue as a rival fund manager lodges a fresh complaint to the FMA about ambush marketing of KiwiSaver services.

Fisher Funds boss Carmel Fisher says she is disgusted at Milford’s apparent deliberate misuse of the Fisher brand name through a Google AdWords marketing campaign.

Milford appears to have used the Fisher name to try to attract potential customers to its own website by paying for search words.

Hence, when someone typed “Fisher kiwisaver” into Google, an ad for “Milford Fisher Kiwisaver” topped the search list with a link to the Milford website.

Similar outcomes were experienced for fellow providers Generate and ANZ’s OneAnswer KiwiSaver scheme.

Milford has pulled the campaign, which was highlighted by Cameron Slater’s Whale Oil blog yesterday.    Read more »

More unethical behaviour from Milford Asset Murkiness

The tip line is running hot with financial industry people contacting us with snippets of unethical practices by Milford Asset Murkiness, excuse me, Management. Thank you for the tips – we are working to ensure the FMA is made aware of some of the alleged behaviour of Milford.

One of the more intriguing tipoffs is the proven ambush marketing Milford are engaging in with paid Google search.

There is widespread abuse by Milford in ambush marketing using Google search. This is where they use the name of one of their competitors in their own paid search result to try and confuse the person searching about Kiwisaver.

For example, one of the smaller but fast growing Kiwisaver funds operators is a firm called Generate. I’ve never heard of them before now, but they’re obviously getting some traction as they’ve won some awards recently. But tellingly, they are the victim of Milford’s ambush marketing.

If you go to Google and search for “Generate Kiwisaver”, the first link that comes up is an ad for Milford. That’s not surprising, companies will often invest heavily in making sure their own name comes up ahead of competitors in Google searches relevant to their industry.

But what the Milford Ad says is very interesting and raises questions about their ethics.

Apparently, they call themselves in their ad “Milford Generate Kiwisaver”.

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Who is the alleged Dirty Trader at Milford Asset Manipulation?

On Saturday, we covered the Herald’s ongoing publication of Brian Gaynor’s column. This is despite his firm, Milford Asset Manipulation, coming under intense scrutiny due to a complaint to the FMA from the NZX (no less) over alleged stock price management.

Hang on, I might have that wrong. I meant Milford Asset Management under fire for alleged manipulation.

It beggars believe that Gaynor still gets to publish his column in the Weekend Herald, but I guess when you advertise heavily with NZME. (the Herald’s parent company), then the Herald gives you a get-out-of-jail free card when it comes to allegations of bad news.

Given that Milford have a mandate to buy and sell shares on behalf of the NZ taxpayer, as well as the savings of tens of thousands of private citizens in NZ, I think we deserve a little more sunlight on the goings ons at this company under fire for allegations of stock manipulation. Through a process of elimination we can shine a bit more light where Milford might prefer to keep us in the dark.

We know that Milford have six portfolio managers (which have been euphemistically described as “traders”), plus Brian Gaynor himself as Executive Director and Chairman of the Investment Committee, which technically makes him ultimately responsible for his team‘s behaviour.  Read more »