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The New Zealand Securities Commission has settled the landmark insider trading action launched last year by against the former rail chief Mark Bloomer.

The Securities Commission and former Tranz Rail chief financial officer Mark Bloomer have settled the landmark insider trading action launched last year by the sharemarket watchdog.

Bloomer has not admitted liability, but has agreed to pay $156,000 and, if requested by the commission, make himself available as a witness in the continuing litigation.

The Australia-based Bloomer was alleged to have breached insider trading laws when he and several others traded shares between February and May in 2002.

The case is the first in which the commission has used its powers to bring court action for insider trading.

It could lead to penalties totalling hundreds of millions of dollars against the remaining defendants.

Bloomer applied to the company to sell shares between February and March 2002. When he ceased selling in March, he retained 646,654 shares which represented more than half the shares that he was able to sell.

In May, shortly after he left the company, he sold a parcel of 23,937 shares which vested in him on the termination of his employment.

When it filed its original action last year, the commission alleged Tranz Rail’s approval of the first set of share sales was invalid. It also said Bloomer did not request or obtain the company’s consent for the second share sale.

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