HP Capital (Trading As Finbase) Receives Warning From FMA Following Incorrect Legal Advice

HP Capital, trading as Finbase, confirms it has received a warning by the Financial Markets Authority (FMA) relating to offers and advertising of its Single Investment financial products for wholesale investors. These errors were disclosure, notification and advertising non-compliances, which did not cause investors to lose money. The warning does not involve the Finbase PIE Fund.

Finbase says, “We proactively sought legal advice regarding our Single Investment financial products prior to promoting this offering. However, the legal advice provided by a well-respected and leading New Zealand law firm was unfortunately inaccurate, which contributed to the breaches and subsequent warning from the FMA.

“We were let down by improper legal advice, and it is disappointing to be in this position. However, we have since reviewed our legal service providers and taken steps to remediate the issue. We prioritise transparency and compliance in the interests of our investors and remain committed to fulfilling our disclosure obligations.

“We are proud to be a 100% New Zealand owned and operated financial services company, with a unique credit philosophy and experienced senior team. We are a partner to New Zealand’s wholesale investor community and cater specifically to private investors, family offices, and high net worth individuals who meet relevant criteria. Our Single Investment products and PIE Fund have grown organically since we launched in 2022.”

Finbase worked closely with the regulator to resolve this matter and explain how these errors occurred, and the regulator acknowledges the subsequent remedial steps the company took to avoid similar contraventions in the future.

The FMA found the Single Investment financial products to be in breach of disclosure and fair dealing requirements of the Financial Markets Conduct Act 2013 and Financial Markets Conduct Regulations 2014. Specifically:

1. Finbase made regulated offers of its Single Investment financial products but did not comply with the disclosure requirements of Part 3 of the FMC Act and its notice obligations in relation to the Small Offers exclusion in the FMC Regulations; and incorrectly applied the Small Offers exclusion and the Wholesale Investors exclusion in the FMC Act.
2. Finbase contravened certain fair dealing provisions of Part 2 of the FMC Act because it published advertisements for its Single Investment financial products which failed to specify those financial products were available for wholesale investors only; and used sponsored AdWords, such as ‘term investments NZ’, which the FMA believed created a false impression that Finbase’s Single Investment financial products were comparable to term deposits or similar low-risk investments.

Finbase adds, “We acknowledge the findings of the FMA in relation to our Single Investment financial products and accept the warning issued by the regulator, which has taken no further action.”

About Finbase

A trusted partner to New Zealand’s wholesale investor community, Finbase is 100% New Zealand owned and operated. We specialise in offering wholesale investors attractive returns backed by first mortgage security over New Zealand real estate.

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