The trustees are now making an application to serve the action on Robinson's lawyer on his behalf. Photo / Thinsktock
The trustees are now making an application to serve the action on Robinson's lawyer on his behalf. Photo / Thinsktock
An out-of-pocket client is trying to bankrupt his struck-off former financial adviser who recommended six "disastrous investments".
Andrew Hrothgar Robinson was the second authorised financial adviser to ever lose his license when the Financial Markets Authority cancelled it in December 2012.
Before this, Robinson had acted as an investment adviserfor Aucklander Neville Mace and an associated family trust.
Mace and other trustees - in the words of a High Court judge - made "six disastrous investments" on Robinson's recommendations and then sued him for damages for their losses.
They claimed four of the six investments - which totalled more than $1.5 million - were entered into because of Robinson's misleading conduct.
They alleged before each transaction Robinson represented he had already personally invested in a similar way but did not disclose this was by way of convertible notes in lieu of him being paid a commission.
They also claimed the former authorised financial adviser did not adequately warn them of the investments' risks.
Robinson, on the other hand, said any advice he gave was in line with the aggressive risk profile the trustees were following.
In his decision on this point, Justice John Fogarty found that the trustees were induced to enter into the investments because of Robinson's "misleading and deceptive conduct" that gave Mace a "wholly inappropriate confidence" in their merit.
While the trustees' allegations that Robinson breached a fiduciary duty failed, the judge found in their favour on a claim of negligence against the former financial adviser. Justice Fogarty, in July last year, ordered Robinson to pay damages and interest of $1.59 million to the trustees.
The trustees then attempted to serve bankruptcy proceedings on Robinson last December but he had moved and left no forwarding address.
The case was called in the High Court at Auckland's bankruptcy list last week but put off until the end of the month.
The trustees are now making an application to serve the action on Robinson's lawyer on his behalf.
