Individual Pleads Guilty to Insider Trading Charges

Kevin Young, a former accountant at Heartland Bank Limited, has admitted to insider trading charges filed against him by the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko. Mr. Young faced four charges for trading and encouraging others to hold shares in Heartland Group Holdings Limited (HGH) from July 2020 to February 2021. He recently confessed to three of the charges, leading the FMA to drop one.

The FMA accused Mr. Young of using undisclosed information about Heartland’s financial results to trade HGH shares, thus gaining an unfair advantage in the market. He also shared this material information with a former colleague, Pritesh Patel, who subsequently purchased HGH shares.

Due to his actions, Mr. Young is scheduled for sentencing on April 17, 2025. Additionally, Mr. Patel has agreed to an enforceable undertaking, where he will pay the Crown $30,000 instead of facing a financial penalty.

Margot Gatland, Head of Enforcement at FMA, emphasized the seriousness of insider trading, highlighting how it damages investor confidence and disrupts fair market practices. By pursuing cases like these, the FMA aims to ensure transparency and integrity within New Zealand’s financial markets.

Mr. Young’s role at Heartland as a treasury accountant gave him access to financial records before their public release, providing him with a privileged view of the company’s financial standing. He used this information to make trading decisions based on non-public data, a clear violation of securities laws.

Insider trading, as outlined in sections 240-243 of the Financial Markets Conduct (FMC) Act, is prohibited to maintain market integrity and uphold investor trust. Punishments for criminal insider trading can include imprisonment up to five years, a fine of up to $500,000, or both. It is crucial to prevent such unethical practices to ensure a level playing field for all market participants.

For more information about the case and the enforceable undertaking involving Pritesh Patel, you can download the FMA’s official document.