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

 


CORRECT: Ex-financial adviser ordered to pay $2.56M

CORRECT: Struck off financial adviser Robinson ordered to pay $2.56M to investor

(Corrects to show Mark Turnock facing charges under Financial Reporting Act in 13th graph in story that ran on July 18)

By Paul McBeth

July 18 (BusinessDesk) - Struck off financial adviser Andrew Robinson, who is separately accused of stealing investor funds, has been ordered to pay $2.56 million in damages plus costs to an investor over a series of negligent and misleading deals.

In the Auckland High Court, Justice John Fogarty made the order against Robinson, a former Sunday Star-Times columnist and adviser to Neville Mace and his family trust, over "six disastrous investments" which were "all made on the recommendation of Mr Robinson, as an investment advisor," according to a July 1 judgment, now published on the Justice Ministry's website.

Between 2008 and 2012, the Mace family trust made investments in NZX-listed electricity retailer Pulse Utilities, start-up investments Digi-Clik International, Zeroshift, bio-tech start-up Enviro Energy, and a loan to Pulse director James Martin on the advice of Robinson.

The judge said Robinson didn't provide any significant warnings around the risks involved in the start-up companies, and that when he said he was investing at a similar level, didn't disclose he was doing so by being paid in scrip for finding investors.

Of the four claims made under the Fair Trading Act, "the plaintiffs were induced to enter extremely high risk investments by reason of Mr Robinson, in trade, engaging in conduct that was misleading and deceptive and was likely to, and did, mislead or deceive Mr Mace in having a wholly inappropriate confidence in the merit of the investment," the judge said.

Robinson took advantage of the relationship he'd built with Mace and "relied on the personal confidence that Mr Mace had in him when making these recommendations to invest in these very high risk investments," the judge said.

Justice Fogarty also ruled Robinson was liable in the negligence for the advice he gave on all of the investments, which he said "falls well short of the quality of advice required in the circumstances by an investment advisor.

"But it is an incomplete description of Mr Robinson's conduct to describe it as a lack of proper care and attention or carelessness. It was deliberately misleading," the judge said. "To be sure, the deceptive and misleading conduct carried with it the consequence that Mr Robinson did not take reasonable care to avoid advice which would like cause financial harm to the Mace Trust."

Robinson represented himself and tried to characterise all equity investments as being aggressive, irrespective of the quality of the company, given their unsecured status.

"This absence of risk advice explains the importance of the distinction Mr Robinson endeavoured to maintain from the outset that any investment in equities is aggressive without distinguishing between investment in a proven performing 'blue chip' company and a listed start-up," the judgment said.

Justice Fogarty ordered Robinson to pay damages including interest of $400,000 for the Pulse dealings, $230,000 for the Digi-Clik investment, $30,000 for the loan to Martin via a trust, $1.1 million for the investment in Enviro Energy and $800,000 for the investment in Zeroshift.

If the Mace family trust is able to find a buyer for any of the securities it still holds, any value is to be credited against the judgment.

Separately, Robinson faces charges from the Serious Fraud Office accusing him of stealing $3 million of investor funds. He and fellow SPG Investments director Mark Turnock also face criminal proceedings brought by the Financial Markets Authority under the Financial Reporting Act. They're due to stand trial in the High Court in April next year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news