Duncan Priest's apparent failure to follow NZX rules in his own personal share trading would be of concern, according to testimony by an expert witness in the former sharebroker's fight to keep a $2 million share parcel from investors who lost their money in the Ross Asset Management fraud.

In a hearing in the High Court at Wellington last month, Priest sought to remove a claim against his shares by RAM liquidator John Fisk of PwC, arguing his investments through Ross were separate to the Ponzi scheme.

The shares were worth $2 million as at June 30, with about 80 percent in Diligent Corp, Mike Colson, counsel for RAM's liquidator, told Justice Denis Clifford, who is yet to deliver his ruling.

Under NZX participant rules, an employee of an NZX advising firm must get sign off from their employers every time they make personal trades.

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In his sworn affidavit Richard Bodman, an expert witness for the RAM liquidator and former compliance officer at First NZ Capital, said he didn't find evidence Priest sought approval from employer McDouall Stuart Securities when using the brokerage to trade shares held by Ross Asset Management and the related Dagger account. McDouall Stuart was an NZX firm between March 2008 to March 2010.

The rules "are about properly managing potential conflicts of interest that may arise because a benefit exists or a gain or other advantage is made at the expense of a client, or a feature is involved that may not be in a client's best interest or those of other clients," Bodman said in his sworn affidavit.

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"I consider the apparent absence of any client written authorisations for the trades conducted on the RAM and Dagger accounts by Mr Priest at (McDouall Stuart), and any international 'compliance' authorisations by (McDouall Stuart) for these trades, to be concerning."

"If I were to discover such personal account activity at my firm, the consequences for the person involved would be extremely serious, both in terms of their employment and reporting to regulators," Bodman said.

McDouall Stuart managing director Andrew McDouaIl, who isn't involved in Priest's High Court case, said through his lawyer that he was "very surprised and annoyed to learn of Bodman's assertion".

"Necessary authorisation was sought and obtained by Priest," he said. "McDouall Stuart has and always has had a rigorous process for all staff trades" and he is "completely satisfied this was complied with."

Wellington-based Ross built up a private investment service by word of mouth, producing regular reports for shareholders indicating healthy but fictitious returns.

Between June 2000 and September 2012, Ross reported false profits of $351 million from fictitious securities trading as part of a fraud that was the largest single such crime committed by an individual in New Zealand.

He is currently serving a 10-year, 10-month jail term, which carries a minimum non-parole period of five years and five months.

Priest signed a deed of arrangement with Ross Asset Management in the early 1990s, initially because he wanted to buy some Canadian stock and saw the tie-up as a custodial arrangement while he managed the buying and selling of the shares.

Complicating matters, Ross used a single ANZ Bank current account to run all transactions through - making it difficult to trace who bought what, and leading the liquidator to pool all transactions through it into a single pool for distribution.

During the October hearing, Priest testified that he "intuitively knew" how much Ross Asset Management was holding on his behalf, and hadn't kept formal records. He also relied on Ross's quarterly statements and the stock broking service, Iress, to keep track of what he owned.

In his reply affidavit to Bodman's expert evidence, Priest said he began his career as a sharebroker in mid-1963 when there were fewer compliance requirements.

"I readily accept that I could be considered to be the product of a different era in that regard and that legitimate criticism could be made of me with regard to my strict compliance with the requirements of the modern regulatory framework," Priest said in his reply affidavit.

"The reality is that from around 2009 I began to wind down my career as a sharebroker. I had no great enthusiasm for the requirements of the modern regulatory framework."

Priest said the Wellington-based brokerage had ceased being a NZX advisory firm by "failing to fully comply with the requirements of the NZX and the regulatory framework."

Currently, there is between $3 million and $4 million available to be distributed to investors, excluding the $2 million of shares in this dispute. Defrauded RAM investors expect to receive 3 cents in every dollar invested.

Ross Asset Management's assets were frozen and receivers appointed in 2012 by the Financial Markets Authority after the watchdog received complaints about delayed or non-payment of investor funds. Ross wasn't available in the early days of the investigation due to his hospitalisation under the Mental Health Act.

PwC's Fisk and David Bridgman were appointed to preserve the assets of the Ross family and related trusts as part of the wider investigation into Ross Asset Management