Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Inquiry highlights need for change to adviser law

News Release 13 May 2002


Inquiry highlights need for change to investment adviser law

The need for tighter law relating to investment advisers is highlighted in a report of a Securities Commission inquiry released today, Chairman Jane Diplock said.

The Commission inquired into the offer of securities by Gideon Investments Pty Limited and the role of Morison Guildford Limited of Masterton as investment advisers for the offer.

Gideon was put into liquidation after the death of its managing director Michael Bastion in March 2000. Gideon purported to be a shares, bonds, currency and futures trading fund claiming returns of up to 51.5% per annum.

The liquidator concluded that there had been fraud and that most of the investors’ funds were used to buy property, thoroughbred racehorses and to pay for Bastion’s lifestyle.

The scheme had no prospectus or investment statement as required under New Zealand law.

The Commission has concluded that Morison Guildford actively solicited funds for Gideon as investment advisers. Some A$5 million was raised for Gideon through their office.

“Investment advisers have certain obligations to those who invest on their advice and with their assistance,” Jane Diplock said. “We consider that Morison Guildford’s conduct was incompetent and irresponsible.”

They did not question the lack of offer documents. Their evaluation and monitoring of Gideon was close to non-existent. It fell short of what might reasonably be expected of a firm offering services to the public. They did not keep proper records.
… more …

This case may also be an example of churning - advising excessive turnover of policies to bring in commissions.

The Commission has recently recommended changes to investment adviser law. This case is an example of the type of matters our recommendations are intended to help address.

In particular the events illustrate the value of rules about mandatory investment adviser disclosure and about recommending illegal offers of securities.

The Commission’s report is available from www.sec-com.govt.nz.

… ends …

Contact:

Catherine Chapman
Communications Manager

(04) 471 7659


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: Body massages and Uber are in, DVDs are out, says Stats NZ

Statistics New Zealand has rejigged the consumers price index basket in its latest three-year review, adding body massages, Airbnb and Uber and removing DVD and Blu-Ray players…More>>

ALSO:


StuffMe: Commerce Commission Welcomes Dismissal Of Merger Appeal

In a summary of their judgment released today, Justice Dobson and lay member Professor Martin Richardson dismissed the appellants’ process criticisms and found the Commission was entitled to place significant weight on the prospect of reduced quality of the products produced by the merged entity. More>>

ALSO:

Digital Futures: New Chief Technology Officer Role Created

Communications Minister Clare Curran has called for expressions of interest for the new role of Chief Technology Officer position to help drive a forward-looking digital agenda for New Zealand. More>>

Real Estate: NZ house sales slump in December but prices still firm

The number of property sales across New Zealand slumped 10 percent in December from a year earlier but prices continued to lift, according to the Real Estate Institute. More >>

ALSO:


Dry: Beef + Lamb Launches Drought Resources

The resources include a fact sheet outlining strategies to manage and mitigate the effects of drought, coping with stress on the farm and advice on feed requirements and animal welfare during the dry period. More>>

ALSO:

InternetNZ: Net Neutrality Failure In US "Will Hurt All Users"

InternetNZ Chief Executive Jordan Carter has condemned the decision by the United States communications regulator to undo 2015 open Internet rules, warning that all Internet users will end up worse off as a result. More>>

ALSO: