David Ross, out of hospital, to cooperate with regulators
David Ross released from hospital, to cooperate with probes into frozen funds
Nov. 22 (BusinessDesk) - Wellington fund manager David Ross, whose businesses have been frozen after missing investor payments, has been released from hospital and will "cooperate fully" with all inquiries into his company and the funds it oversees.
Ross was released from hospital yesterday after receiving compulsory treatment under the Mental Health Act, according to a statement released by legal firm Chapman Tripp. Through this time, Ross was unable to assist the investigations, which have found his funds management appeared to have the characteristics of a Ponzi-style scheme.
"Through his lawyers, Mr Ross has now undertaken to cooperate fully with the Financial Markets Authority (FMA), the receivers, and the Serious Fraud Office (SFO)," the statement said. "While these matters are the subject of official inquiries, Mr Ross and his family will be making no further comment."
The SFO launched a formal investigation this week, having helped the FMA with its own inquiries since Oct. 25. Earlier this month, John Fisk and David Bridgman of PricewaterhouseCoopers were appointed receivers and managers and have recommended all of the Ross-related entities be placed in liquidation.
Ross, formerly a share broker, managed funds on behalf of 900 privately wealthy individuals, with management fees averaging $4.4 million a year paid in each of the last three years.
The PwC investigation found inadequate record-keeping and has been unable to source much of the documentary evidence for trading and investment holdings that it needs to complete a full picture of what looks to have the characteristics of a Ponzi-style scheme, where investors were paid out at least in part using other investors' funds.
The Ross group's database purports to show investments worth $449.6 million, of which $152.4 million is said to be held in Australian investments, another $136.1 million in Canada, some $156.4 million in the US, $3.8 million in New Zealand, and $943,332 elsewhere. Of this, some $437.6 million was held by a Ross group subsidiary, Bevis Marks.
However, assets worth just $10.2 million, and $200,000 in cash deposits, had been identified in the receivers' initial searches, which they described as a matter of "considerable concern.'