Regulator settles some CBL Corporation claims

CBL's Peter Harris is still going to trial over IPO claims. Photo / Brett Phibbs

The Financial Markets Authority has settled some claims against former directors of CBL Corporation, the listed insurer that collapsed in 2018 resulting in swathes of litigation.

The markets regulator was one of several civil claimants to pursue directors of CBL alleging misleading conduct and continuous disclosure breaches.

Parties in two investor class actions filed in the high court at Auckland also reached agreement last week, as have claims made by liquidators.

The FMA had filed two civil suits related to the insurer’s downfall.

The first related to its initial public offering and was against former managing director Peter Harris, chairman Alistair Hutchinson and chief financial officer Carden Mulholland. That case has not been settled and is going to trial in April 2024.

The second case was against CBL and four independent directors, for not telling the market about the need for CBL Insurance to strengthen its reserves, the existence and impact of aged receivables, and directions from the Central Bank of Ireland relating to a European subsidiary. It also claimed misleading conduct over a market update in August 2017.

A penalty hearing for the FMA second case is yet to take place in the high court at Auckland.

The FMA is not the only government agency interested in the collapse of CBL Corporation and its subsidiaries.

The Serious Fraud Office’s fraud case against Harris and Mulholland was heard over the past two months and is awaiting a verdict.