13 July 2015

FMA obtains enforceable undertakings from NZ residents found liable for financial misconduct in Australia

The Financial Markets Authority (FMA) has today agreed to accept enforceable undertakings from David John Hobbs and Jacqueline Hobbs, limiting their activities in New Zealand’s financial markets.

Mr and Mrs Hobbs are New Zealand residents and company directors. They have been found liable for serious financial misconduct by the New South Wales Supreme Court for the operation of 14 unregistered, offshore-managed investment funds administered in Australia. The penalties imposed by the court included banning orders against Mr and Mrs Hobbs.

The undertakings given to the FMA require that:

• Mr Hobbs will not act as a director or promoter of a company in New Zealand permanently and will not provide financial adviser or broking services in New Zealand; and

• Mrs Hobbs will not act as a director or promoter of a company in New Zealand for 4 years and will not provide financial adviser or broking services in New Zealand.

This is subject to an exception that allows Mr and Mrs Hobbs to continue to operate their Nelson-based car dealership on the specific condition that their business will not:

• seek to raise funds from or offer any securities or financial products to members of the public; or

• be involved in providing financial services (including borrowing or lending money) to customers purchasing or selling vehicles through their business.

Belinda Moffat, the FMA’s director of enforcement, said “the FMA acknowledges the Australian court’s findings that Mr and Mrs Hobbs have engaged in serious financial misconduct, involving false misrepresentations to the investing public, including New Zealand investors.

“These undertakings harmonise the position in New Zealand with the bans imposed in Australia and ensure that the New Zealand public receives the same protection as the Australian public.”

Where a New Zealand resident is found liable for misconduct in another jurisdiction, the FMA may apply to the court for a management banning order under the Financial Markets Conduct Act. This ensures that the New Zealand public receives the same level of protection as given in another jurisdiction. Undertakings deliver protection without the time and cost of a court proceeding.

The full undertakings are available here.

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