$40,000 fine in first FMA case of company abuse of the FSPR
MR No. 2019 – 24
06 June 2019
Morgan DeVere fined $40,000 in first FMA case of company abuse of the FSPR
Morgan DeVere Corporate Finance Limited (Morgan DeVere) has been fined $40,000 following its conviction at the Wellington District Court on two charges of breaching the Financial Services Providers (Registration and Dispute Resolution) Act 2008 (FSP Act).
Morgan DeVere continued to claim it was registered on the Financial Services Providers Register (FSPR) after it had been deregistered and despite subsequent warnings from the Financial Markets Authority (FMA) and the Registrar of the FSPR.
Section 12 of the FSP Act states that no person, including a corporation, can hold out that it is registered under the FSP Act unless it is registered on the FSPR and a member of an approved dispute resolution scheme.
The New Zealand-based director of the company, former Wellington real estate agent Rene Moorby pleaded guilty and was sentenced to 75 hours of community service in April 2019 for his part in the offending.
Karen Chang, Head of Enforcement at the FMA said: “This is the first time the FMA has prosecuted this type of abuse of the FSPR.”
“Our concern is that businesses and individuals have been using New Zealand’s reputation as a well-regulated country to target overseas investors – claiming they’re registered on our FSPR when they’re not misleads consumers and implies a cloak of respectability they’re not entitled to.”
“We warned those involved in this abuse that we would bring cases before the courts. They should now be in no doubt that we will follow through. We will continue to target the New Zealand based directors of these companies.”
A second case related to abuse of the FSPR, involving Pegasus Markets Limited and director Michael Reps, remains before the North Shore District Court.