Michael Beard settles NZ insider trading case

<p>Former Tranz Rail chief executive Michael Beard has agreed to pay NZ$155,691 to settle an insider trading case brought against him by the New Zealand Securities Commission.</p> <p>Mr Beard was one of several executives named in the proceedings, which relates to the trade of Tranz Rail stock in the years before the company was bought by Toll Holdings.</p> <p>He will pay NZ$55,691.84 plus NZ$100,000 of the commission’s claim for penalty and costs.</p> <p>"Mr Beard has agreed to make this payment without any admission of liability," the commission stated.</p> <p>"He acknowledged at that time that he was or may have been in possession of inside information when he traded the shares in question as a result of his position as an officer and director of Tranz Rail."</p> <p>The commission said Mr Beard had acknowledged that the commission had a case against him but also considered that he had a defence.</p> <p>Mr Beard has agreed to assist the commission with its case against the remaining defendants.</p> <p>In August 2001, the Tranz Rail board gave Mr Beard 70,496 shares in lieu of a cash bonus .</p> <p>The board approved the sale of a portion of the shares to pay for a tax liability created by the grant, the commission found, and in March 2002,Mr Beard sold 35,248 shares to fund the tax payment.</p> <p>At the time, Mr Beard held 270,496 shares of which 200,000 were acquired when he joined the company in May 2000.</p> <p>"Mr Beard believes that he sought and obtained the consent of the board for the sale of the shares in question," the commission said.</p> <p>"In seeking that consent, Mr Beard retrospectively submitted the required documentation in which he indicated at that time that he was or may have been in possession of inside information." </p> <p>It found that Mr Beard did not sell any other shares and continued to accumulate shares in the company until the Toll takeover of October 2003.</p> <p>At that time, he sold all his holdings &#8211 a total of 513,133 ordinary shares, 790,000 options and 1,200,000 redeemable preference shares &#8211 "incurring a significant loss".</p> <p>Mr Beard is also a former chief executive of Australia-New Zealand Direct Line. </p> <br />