Financial investigations status

Current at 15 October 2015.

Since 2006, 51 New Zealand finance companies have either gone into liquidation or receivership, or frozen payments. Many New Zealanders lost their money.

The scale and circumstances of the sector gave rise to concerns of inappropriate behaviour and breaches of the Securities Act and a programme of investigations into the failures was initiated.

Below are information on the status of investigations and answers to questions about our work.

FMA Proceedings Commenced
N

Company

Event

Date of event

Current status of investigation

1. Belgrave Receivership May 2008 Charges laid, two guilty pleas, one stay, trial commenced 3 March 2014 and guilty verdict delivered on 16 May 2014 and sentencing occurred on 4 July 2014. Appeal against sentence occurred on 10 February 2015. The appeal was dismissed on 26 February 2015.
2. Bridgecorp Receivership July 2007 Charges laid, two guilty pleas, three guilty verdicts, all sentenced, two appeals dismissed. Civil proceedings discontinued.
3. Bridgecorp Investments Liquidation July 2007 Charges laid, two guilty pleas, three guilty verdicts, all sentenced, one appeal dismissed
4. Capital & Merchant Liquidation November 2007 Charges laid - five guilty pleas all sentenced. Civil proceeding discontinued on the basis of a settlement.
5. Dominion Finance Receivership September 2008 Charges laid, one permanent stay, five guilty pleas all sentenced. Civil proceedings stayed.
6. Five Star Consumer Finance Receivership August 2007 Charges laid - four guilty pleas; all defendants sentenced
7. Five Star Finance Receivership September 2007 Charges laid - four guilty pleas; all defendants sentenced
8. Hanover Capital Moratorium July 2008 Civil proceedings filed March 2012. Settlement of civil proceedings announced in July 2015.
9. Lombard Finance Receivership April 2008 Charges laid, all guilty verdicts and sentenced. Appeal dismissed. Leave to appeal sentence to the Supreme Court granted and Supreme Court allowed an appeal restoring the High Court sentence. Civil proceedings discontinued.
10. Nathans Finance Receivership August 2007 Charges laid, one guilty plea, all remaining defendants found guilty, all sentenced. Sentences upheld on appeal. Civil proceedings discontinued.
11. National Finance Receivership May 2006 Charges laid, two guilty pleas, one guilty verdict, all sentenced, one appeal dismissed.
12. North South Finance Moratorium December 2008 Charges laid, see 5 above.
13. South Canterbury Finance Receivership August 2010 FMA supported charges laid by SFO December 2011, trial commenced 12 March 2014. Decision delivered on 14 October 2014. Guilty verdict in relation to 1 defendant on 5 of 9 charges. Two other defendants found not guilty on all charges.
14. United Finance Moratorium July 2008 Civil proceedings filed March 2012 see 8 above.
15. OPI Pacific Finance (formerly MFS Pacific Finance) Moratorium March 2008 Charges filed, four guilty pleas. All defendants sentenced.
16. Mutual Finance Receivership July 2010 Charges filed (together with charges in respect of Viaduct Capital). Matter has been transferred to the High Court. A 12 week hearing has been scheduled to commence on 8 August 2016.
17. Viaduct Capital Receivership May 2010 See note 18 above.
Referred to another regulator, concluded with another enforcement option or closed

N

Company

Event

Date of event

Current status of investigation

1. Allied Nationwide Finance Receivership August 2010 Closed, warning letter issued to directors
2. Antares Liquidation May 2008 Referred to other regulator *#
3. Equitable Mortgages Receivership November 2010 Closed ##
4. Irongate Property Limited Receivership May 2011 Closed ##
5. Provincial Finance Receivership May 2006 Referred to other regulator *
6. Western Bay Finance Receivership August 2006 Referred to other regulator *
7. Finance & Investments Receivership September 2007 Concluded (enforceable undertakings) ##
8. Beneficial Finance Moratorium October 2007 Closed ##
9. Capital & Merchant Investments Receivership November 2007 Closed ##
10. Chancery Finance Liquidation November 2008 Closed ##
11. Compass Capital Receivership June 2009 Closed ##
12. Cymbis/Fairview Receivership May 2008 Closed ##
13. Dorchester Finance Moratorium June 2008 Closed ##
14. LDC Finance Receivership September 2007 Closed ##
15. Numeria Finance Receivership December 2007 Closed ##
16. Orange Finance Moratorium August 2008 Closed ##
17. Aorangi Securities (including Hubbard Management Funds) Complaint June 2010 Referred to other regulator**
18. Rockforte Finance Receivership May 2010 Referred to other regulator**##
19. Waipawa Finance Liquidation August 2008 Referred to other regulator** (charges laid - guilty plea and sentenced)
20. QED Liquidation March 2008 Referred to other regulator* (charges laid - sentenced)
21. Fendal Finance Complaint March 2009 Referred to other regulator* (charges laid - guilty plea)
22. Clegg & Co Receivership October 2007 Referred to other regulator* (charges laid - guilty plea and sentenced)
23. All Purpose Finance (trading as St Kilda) Receivership November 2008 Closed##
24. Direct Property St Laurence Investments (No.6) (part of St Laurence Group) Moratorium June 2008 Closed##
25. Finance & Leasing Receivership January 2011 Closed##
26. Geneva Finance Moratorium October 2007 Closed##
27. Mascot Finance Receivership March 2009 Closed##
28. Strata Finance Receivership April 2009 Closed##
29. Kiwi Finance Receivership April 2008 Completed December 2011, with repayment of investors.
30. Boston Finance Moratorium March 2008 Closed October 2012 ##
31. Structured Finance (NZ) Moratorium May 2009 Closed October 2012 ##
32. Vision Securities Receivership April 2010 Closed October 2012 ##
33. Propertyfinance Securities Receivership August 2007 Closed October 2012 ##
34. Strategic Finance (including Strategic Nominees) Moratorium August 2008 Investigation concluded February 2013. FMA notified directors that it considered that the Directors had likely breached their disclosure obligations required by the Securities Act. Settlement reached. Details available in FMA press release dated 5 June 2014.
35. St Laurence Moratorium June 2008 Investigation complete. Warning letter issued to Directors.
36. South Canterbury Finance Limited Receivership June 2010 Criminal investigation closed in 2011 and the FMA supports charges filed by the SFO. Inquiries into potential civil claims closed in December 2014.
* National Enforcement Unit of the Ministry of Economic Development
** Serious Fraud Office
# Relates to Five Star prosecution
## On the basis of information we currently have FMA will continue to include these issuers within its general surveillance. Our decision can and will be reviewed, and our investigation may be reopened, if new information comes to light.