Court
appointed receivers can take control of a financial adviser’s business where
the Financial Markets Authority fears loss of client funds.
The High Court in
Wellington appointed receivers to companies run by financial adviser David
Robert Gilmour Ross after investors complained to the Financial Markets
Authority (FMA) about his dysfunctional management. His investment business has about 900
clients, claiming to hold investments totalling some $430 million.
The FMA said it had
received complaints from nearly 30 clients who had not received payments
due. There were serious concerns about management
of the business: a failure to make decisions, failures to implement client
investment instructions and inadequate records.
All staff had resigned.
The court was told Mr
Ross was unavailable. Subsequent
newspaper reports indicated that Mr Ross was in hospital, suffering a mental
illness.
Preliminary
investigations by the FMA indicated that investments were held in New Zealand,
Australia, North America and the United Kingdom. Records were incomplete. Tax returns for the business were two years
in arrears.
John Fisk and David
Bridgman of PriceWaterhouse Coopers were appointed as receivers to take control
of the business.
Financial
Markets Authority v. Ross – High Court (6.11.12)
12.039