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

 

Commission bans contributory mortgage broker

News release

19 December 2006

Securities Commission bans contributory mortgage broker

The Securities Commission has banned Contributory Mortgage Investments Ltd (CMI) from acting as contributory mortgage broker for two of its mortgages.

Crichton Horne & Associates Mortgage Brokers Limited has been appointed as contributory mortgage broker for these mortgages.

CMI has also been banned from offering interests in contributory mortgages to the public for four months. During this time the Commission will continue to review CMI’s operations to determine whether any other action should be taken.

The Commission considers CMI breached the Contributory Mortgage Regulations in relation to the two mortgages, which were the Otahuna Property Limited first and second mortgages, by:

• paying investors’ money to the borrower when it ought to have known that the offer document for the Otahuna first mortgage was misleading as it failed to disclose that the security for the first mortgage was limited to a priority amount; and by

• failing to notify investors of the borrower’s default and the action CMI was taking in respect of the default, within a reasonable time.

“CMI has not met the standards of care and good governance expected of those who raise funds from the public. It is in the public interest to prohibit further fundraising until the extent of CMI’s failure to comply with the law is fully established.” Jane Diplock said.

CMI told the Commission about its failure to disclose that the security for the first mortgage was limited to a priority amount and admitted it has a conflict of interest in the continued management of these mortgages. CMI’s failure to disclose to first mortgage investors that their security was limited to a priority amount may give grounds for an action against it by those investors. In these circumstances although CMI proposed steps intended to manage the conflict the Commission considers that the only realistic way to manage a conflict of this nature is for an independent party to represent the interests of investors.

CMI has a history of securities law breaches. In 2004 it was convicted for providing misleading information to investors in relation to a contributory mortgage and for paying investors’ money to a borrower when there were insufficient funds to complete the development for which the money was being lent, events occurring in 2000.

Earlier this year the Commission accepted an enforceable undertaking from CMI in relation to events occurring in 2004 and 2005. The undertaking is available on the Commission’s website at http://www.sec-com.govt.nz.


Ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Stats NZ: Largest Drop In Terms Of Trade In A Decade As Dairy Export Prices Sour

Lower export prices for dairy, meat, and logs in the September 2020 quarter led to the biggest drop in terms of trade since June 2009, Stats NZ said today. Export prices fell in the September 2020 quarter, down 8.3 percent from its highest ever ... More>>

ALSO:

Stats NZ: Election Boosts October Job Numbers

Job numbers were boosted by general election staff in October 2020, along with rises in the manufacturing, retail, and hospitality industries, Stats NZ said today. Filled jobs rose by 27,667 to 2.2 million in October 2020 compared with September, after ... More>>

Government: New Year Border Exception For Seasonal Workers In The Horticulture And Wine Industries

2000 additional RSE workers to enter New Zealand early next year employers must pay these workers at least $22.10 an hour employers will cover costs of managed isolation for the RSE workers RSE workers will be paid the equivalent of 30 hours work a week ... More>>

ALSO:


Media: Discovery, Inc. Completes Acquisition Of New Zealand’s Mediaworks TV Ltd

Auckland, New Zealand, December 1, 2020 - Discovery, Inc. (“Discovery”), the global leader in real-life entertainment, has completed its acquisition of New Zealand’s leading independent free-to-air commercial broadcaster, MediaWorks TV Ltd, now operating ... More>>

Department Of Conservation: Big Year Underway At Albatross Colony

Familiar faces are returning for the new season of Royal Cam, with a big breeding year underway for the toroa/northern royal albatross colony on Otago’s windswept Pukekura/Taiaroa Head. More than 120 albatrosses, a taonga species, have returned ... More>>

Real Estate: ASB Survey Reveals Majority Of Kiwis Expect House Prices To Keep Climbing

ALSO:

House price expectations are soaring as New Zealand’s housing market shifts up a gear. But stretched affordability is putting a dent in perceptions of whether it’s a good time to buy. While Kiwis reveal they do expect interest rates to fall further. ... More>>

Stats NZ: Births And Deaths: Year Ended September 2020

Births and deaths releases provide statistics on the number of births and deaths registered in New Zealand, and selected fertility and mortality rates. Key facts For the year ended September 2020: 57,753 live births and 32,670 deaths ... More>>

ALSO: