A man has accused the Financial Markets Authority of failing to prevent a conflict of interest after he discovered the person investigating his complaint previously worked for the company he was complaining about.
But the regulator says its staff are subject to strict business policies and practices designed to mitigate any potential conflicts of interest and it is confident "no breach" of the policy had occurred.
The man, who doesn't want to be identified, complained to the FMA about a foreign exchange trading firm in January.
After months of not hearing back from the regulator he got back in touch and spoke with an investigator only to discover the investigator worked for the foreign exchange company prior to his role at the FMA.
"He should have recused himself from the start."
The man said the FMA investigator told him he had looked into the complaint but had only talked to the foreign exchange company involved.
He was also concerned the investigator lacked experience in foreign exchange trading as he had previously worked in derivatives - a different area of investment.
"He only talked to the perpetrator which is just preposterous. He had no experience of FX [foreign exchange] systems."
The man asked to speak to the investigator's manager and received a reply from the FMA's manager of supervision, Michael Hewes, acknowledging his concerns about the potential conflict of interest.
In an email Hewes said: "Firstly I would like to acknowledge your concern raised regarding any potential 'conflict of interest' with staff members.
"In reviewing this particular case I am confident that no 'breach' has occurred, and the discussions held with you were not biased in any way."
However he said it should not have happened. "That said this should not have happened, and I have reminded my team about our policies."
Hewes said standard practice with any notifications from the public was that it undertook a risk assessment and then engaged its various subject matter experts with the FMA before responding.
A spokesman for the FMA said it was confident that external advice was not required in relation to the man's concerns.
"The FMA can and does seek outside expertise on a range of issues, where it believes this is appropriate. The FMA is confident that external advice was not required in this case."
Hewes said the man's views would be taken into account as part of a sector risk assessment on derivative issuers.
But ultimately the FMA spokesman said it disagreed with the complainant on the issues raised.
Asked why it had taken so long to look into the complaint he said it looked at all matters raised in a risk-based way and followed up with companies and potentially the broader market "as appropriate".
But the man said he felt he had never been given the chance to outline the issues of his case to anybody with foreign exchange expertise.
"I have never had a verbal or written explanation from the FMA in six months of trying. The only letters I have received are similar to your letter, without anybody
making the effort to address my issues with an FX systems expert."
The man, who said there was nothing in it for him in taking the complaint, said he felt the regulator should have engaged with him a lot more and taken his concerns more seriously.
"My entire motive is to stop supposedly reputable firms playing fast and loose with the facts.
"Surely the FMA has an obligation to ensure that firms it regulates operate with integrity and fairness?"