FMA chief executive Rob Everett told the Herald on Friday that these discussions were ongoing.
"We are still hopeful that a sensible and appropriate settlement can be reached in terms of getting some money back to investors and dealing with the issues we've seen. But we have made very clear that we're willing to go to trial if that doesn't happen."
Asked if the FMA's preference was to settle, Everett said: "Well, always - because you have a better chance of getting recovery for investors quicker and not continuing to spend taxpayer money and tie up the courts and frankly, given the time lapse, you know, we would always be keen to have the issue brought to a close and ... tied up sooner rather than later.
"But on all of these settlements we've gone through in finance company cases we have to balance the time and the cost of going to court with making sure that if we reach a settlement it's in investors' interests and the market's interests."
Settling is the norm in litigation - and in the year to June 30 some 15 per cent of all civil cases across the High Court were decided at trial. Even this is a high rate compared with jurisdictions similar to New Zealand.
Hanover investor George Craddock, who lost hundreds of thousands of dollars, said its failure six years ago "still felt like yesterday".
"It's like a death in the family when you lose your life savings and have to start all over again," said Craddock.
If a settlement did go ahead, Craddock said he would prefer an acknowledgment of liability and compensation for investors.
A lawyer representing Mark Hotchin did not respond to a request for comment yesterday.
Hotchin's bid to join Hanover trustees, New Zealand Guardian Trust Company and Perpetual Trust, in the FMA proceedings is still live.
Last month he won leave to take an appeal to the Supreme Court.
