FMA backed off investigating Jock Hobbs
March 20 (BusinessDesk) – The Financial Markets Authority closed its probe into former All Black and Strategic Finance director Jock Hobbs last year after the extent of his cancer was made apparent to it.
The financial markets watchdog issued the statement today, two days after Hobbs’s funeral in Wellington, amid speculation in the New Zealand Herald last week the former All Blacks’ estate might face a civil case over the investigation into Strategic Finance. The FMA is continuing its probe into the failed lender, but has yet to decide on whether to lay charges.
“FMA decided in June 2011 to close its investigation into whether Mr Hobbs had committed a breach of the Securities Act on the basis of medical evidence then provided to it on behalf of Mr Hobbs,” the FMA said. “That decision was communicated by FMA to Mr Hobbs' solicitors on 14 June 2011.”
Hobbs had leukaemia and died last week. His high profile funeral was attended by past and present All Blacks and several Cabinet Ministers, including Prime Minister John Key. As chairman of the New Zealand Rugby Union, Hobbs had a key role in securing New Zealand’s hosting rights to last year’s Rugby World Cup.
Strategic Finance owed some 10,000 investors $368 million.The company went into receivership in 2010, and investors have so far recovered 7 cents in the dollar. Receiver John Fisk of PricewaterhouseCoopers expects they will ultimately get back between 12 percent and 26 percent of their principal.
The FMA’s predecessor, the Securities Commission, began investigating Strategic Finance in 2009 when former Act Party MP John Boscawen told Parliament the finance company misrepresented about $68 million worth of debt which it classified as second mortgages when they were effectively a third-ranking security. Former Commerce Minister Simon Power subsequently referred the matter to the regulator.