Vivier & Co, which counts one-time political operator Luigi Wewege as a director, is appealing a Financial Markets Authority decision to strip it of its registration as a financial services firm, saying the regulator used an "inflammatory article" as the basis for the deregistration.

Appearing in the High Court in Wellington before Justice Timothy Brewer, Vivier counsel Andrew Riches said the FMA only began to investigate the firm after a member of the public passed on an Interest.co.nz online news article, which linked the company to sub-prime mortgages in Ireland, and questioned whether that reflected badly on the reputation of New Zealand's financial regulation.

The article, by Gareth Vaughan and published on February 26, 2015, detailed Vivier's dispute with an Irish television channel over claims sub-prime mortgages were funded by the proceeds of British fraud.

In April, the regulator notified Vivier it would be removed from the Financial Services Providers Register because it didn't believe the company was providing services in New Zealand. Riches told the court that in the notice of deregistration, the FMA didn't mention the article, which he claims is a breach of natural justice.

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"Bodies shouldn't make decisions based on newspaper articles," Riches said. The email pointing out the article should have been included in the notification to give Vivier the opportunity to "rubbish" the claims, "because the article contains extremely derogatory statements ... and was clearly in the mind of decision makers".

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The "inflammatory article led to the decision" which was made by FMA with "a degree of bias and not as a fair-minded lay person would expect," Riches said.

Justice Brewer has imposed an interim order suppressing publication of naming the person who forwarded the article to the FMA. Riches first argued that the court should name the person as there was suspicion from his clients the journalist himself emailed the regulator, which Mary Scholten QC, appearing for the FMA, said was not the case.

The FMA denies it deregistered Vivier as a result of the article although the regulator did say it started investigating Vivier after the article noted that the Department of Internal Affairs was no longer overseeing Vivier under anti-money laundering and countering financing of terrorism legislation. Further investigation, including a site inspection of the Auckland offices by the Ministry of Business, Innovation and Employment, showed little evidence of activity in the office other than some administrative work.

"FMA doesn't accept that (Vivier ) is providing any financial services listed in New Zealand - there is no evidence of that, apart from an assertion," Scholten said.

This is the first appeal of a deregistration since FMA was granted the powers under the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2014. The government and regulator were concerned shell companies were registering as financial service providers in New Zealand to trade on the country's reputation for not being corrupt.

"Parliament has recognised if registration creates misleading appearance of regulation in New Zealand then that may damage New Zealand's reputation overseas," Scholten said.
Last year, FMA asked Viver to remove references to FMA regulation and the regulator's logo from the website for that reason.

The hearing is set down for one day and is continuing.