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Home / Business / Markets / Shares

FMA backs Strategic Finance secrecy

NZ Herald
5 Jun, 2014 07:00 PM2 mins to read

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FMA's head of enforcement Belinda Moffat.

FMA's head of enforcement Belinda Moffat.

Confidentiality agreement helped secure $22m payback deal, says agency head.

The Financial Markets Authority won't disclose who will pay what in a $22 million Strategic Finance settlement and says this confidentiality is appropriate.

Strategic Finance directors and its auditors, BDO Spicers, will pay $22 million after reaching a settlement with the FMA and the failed firm's receivers.

Under the settlement announced yesterday, another 5c in the dollar will be paid to the finance company's secured investors, who were owed more than $360 million when the company went into receivership.

Read also:
Strategic Finance's $22m settlement

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This means the total amount returned to secured investors by the end of the year will amount to 15c in the dollar.

The FMA's head of enforcement Belinda Moffat would not disclose who paid what out of the directors and auditors.

"That's confidential," she said.

Asked if it was appropriate for a regulator to enter into a confidential settlement with the directors, who it believed were likely to have breached the Securities Act, Moffat said: "When we consider what's in the best interest of the investors and in the public interest, we do have the ability and authority to reach a settlement like this and we carefully consider what is appropriate."

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If confidentiality led to a result that would give a good return for individual investors and the public, "then it is appropriate for us to agree to terms of confidentiality".

Moffat said the FMA considered the most important information for the public and investors was the total amount to be returned, the $22 million.

The six former Strategic directors in the settlement - Kerry Finnigan, Graham Edward Jackson, Marcel Aubrey Lindale, Timothy John Rich, Denis Grenville Thom and David John Wolfenden - have also undertaken not to act as directors or promoter of a public issuer of securities for five years or as chief executives or chief financial officers for three years.

Last year, the FMA said it believed the directors were likely to have breached disclosure obligations under the Securities Act by making false statements.

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See yesterday's PwC announcement here:

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