23 Jan 2015

Trader warned over 'bait and switch'

3:58 pm on 23 January 2015

An online trader has been given a stiff warning by the Financial Markets Authority (FMA) for using so-called bait and switch tactics.

laptop computer keyboard generic

The online trader has received a warning but will not be prosecuted (file photo). Photo: AFP

The tactics involve enticing buyers with the promise of a cheap deal then offering a more expensive product once they make an approach.

The trader has not been named and is not being prosecuted because of his inexperience as a trader and his cooperation with the FMA inquiry, among other things.

The authority said the dealer's trades were likely to create a misleading appearance about the extent of trading in, or the value of, a group of shares.

The offences could normally attract a fine of $300,000 for an individual.