In light of David Ross' lengthy prison term for Ponzi scheme, regulator will not proceed with disciplinary complaint.
The country's market regulator wants to withdraw a disciplinary complaint against fraudster David Ross, who is serving the longest prison sentence handed down to a white collar criminal in New Zealand.
Ross received a 10 years and 10 months' jail sentence last year for running a Ponzi scheme and swindling his investors, who lost $115 million when the fraudster's business collapsed in 2012.
The sentence followed Ross pleading guilty to eight charges brought by the Financial Markets Authority and Serious Fraud Office, including four of false accounting and one of theft by a person in a special relationship.
Ross has since filed an appeal against his sentence, though no date has been set for this.
Before his fall from grace, Ross ran a Wellington firm as an authorised financial adviser (AFA), who was licensed by the FMA.
Following the collapse of his business but before he admitted his fraud, the FMA brought a complaint against Ross to the Financial Advisers Disciplinary Committee (FADC).
The committee, which has the power to fine financial advisers or recommend they be deregistered, was set up in 2010 to deal with complaints about breaches of code of professional conduct.
This code sets out minimum standards of ethical behaviour, client care, competence and continuing professional training with which AFAs must comply.
Ross' case first came before the FADC last August but was adjourned until the outcome of the criminal charges he was facing.
His case is next due before the committee next Monday in Wellington.
However, in light of his lengthy prison sentence and given his AFA licence had already been suspended, the FMA does not want to proceed with the matter.
"At the hearing on 10 February 2014, FMA will seek permission to withdraw its complaint given the outcome of the criminal proceedings and the fact that Mr Ross' AFA status has been cancelled. Consistent with its position in the criminal proceeding, FMA has not sought a fine as it considers that any funds that may be available should be paid to investors through the receivership," an FMA spokesman said yesterday.
The financial advisers licensing regime has been changed since Ross' collapse, albeit as part of a planned review of the system.
Advisers are now required to file testimonials from a manager, a peer, a client and a certificate of standing from a professional body if appropriate.
$115 million fraud
* Ross Asset Management was raided by the Financial Markets Authority in late 2012 and the business' receivers said it appeared to be a Ponzi scheme.
* Ross, in his 60s, last year admitted eight charges brought by the FMA and SFO.
* In November, he was sentenced to 10 years 10 months' jail.
* Investors lost $115 million in the scheme.