A decision on exactly how the money tied up in failed investment broker Halifax Investment Services will be divvied up is due soon but regulators have yet to take action against its directors more than two years after its collapse.
The Australian company and its 70 per cent-owned New Zealand subsidiary Halifax New Zealand went into administration in 2018 and then liquidation in March 2019.
About 12,000 investors have been caught up in the collapse of the online brokerage, with some A$211 million invested. Just over 2000 of those investors are based in New Zealand.
The company's services included margin foreign exchange trading, CFDs (contracts for difference, a form of speculating on market moves), and shares and options trading through the online platforms Interactive Brokers, MetaTrader4 and MetaTrader5.
All of the New Zealand arm's administration and treasury support services were provided by the Australian head office. So, when the Australian business went into administration, Halifax NZ could not operate separately.
The initial administrators' report found that while investors' money was held in trust, there was a shortfall of A$19.7m - about 9 per cent of clients' equity positions.
That has now grown to A$44.6m or about 16 per cent of client equity positions as of February 28 this year.
Liquidators KPMG took the case through a joint court process in Australia and New Zealand, in a first-ever cross-country hearing, for a ruling on how to distribute the money.
The case was heard in December with the judgment reserved.
The Herald understands the judgment will be released next Wednesday.
The liquidators' fifth report released last month shows Halifax New Zealand had cash and other assets to the value of NZ$62.1m and A$58.2m held on trust for the benefit of investors which are subject to the client money court proceedings.
The company also owes preferential creditors $116,360 and unsecured creditors $10,968 although this includes the around 2100 contingent (investor) creditors of the company for the value of $1.
The liquidators are still investigating the conduct of the company's director, former directors and various third party advisers to determine if there are any potential recoveries available.
But they say they are also weighing up the costs and benefits of doing that with the prospects of success and the financial ability of defendants to meet claims.
The sole remaining director is Andrew Gibbs, who was also New Zealand managing director, and through his trust the owner of 30 per cent of the New Zealand business.
Former directors include Christopher Weir, Jeffrey Worboys and Veronica Aris, who all resigned on November 25, 2018 - two days before the administrator was appointed in this country.
New Zealand's market regulator the Financial Markets Authority began an investigation into the company in February last year.
An FMA spokesman said the investigation into Halifax was ongoing.
"We don't comment on live investigations. We are mindful of the other processes under way in relation to Halifax and any findings that may result from them, including the joint Australia-New Zealand court case, the Australia-New Zealand liquidation process, and Asic's ongoing investigation. We continue to receive updates from the liquidators of Halifax."
He said while the FMA endeavoured to run an efficient and timely investigation process, it must be thorough.
In Asic's last update it said it continued to receive regular updates from the liquidators during the liquidation process.
"Asic will consider further the circumstances surrounding the voluntary administration and liquidation of Halifax, as well as the allegations of misconduct raised by the administrators (including in their report to creditors under s439A of the Corporations Act), particularly those concerning compliance with laws on conduct and client money.
"Under the law, including the Corporations Act, licensees must keep client money separate from their own. This is an important safeguard to protect the interests of retail investors.
"Asic takes matters concerning the protection of client money particularly seriously. Asic notes that breaches of the client money provisions attract criminal penalties."