There will be no resignations or disciplinary action at broking firm Forsyth Barr, despite a damning Commerce Commission report alleging "misleading and deceptive" conduct.
The report, released yesterday, gave further background on the commission's investigation into the marketing of Credit Sails, a complex derivative product that failed in the financial crisis, causing 100 per cent losses for investors of $71 million.
Internal Forsyth Barr emails quoted in the report likened investors to flies and complained about toning down the sales pitch in marketing documents.
"We're not selling bloody cigarettes!" said one.
Responding to the publication, Forsyth Barr managing director Neil Paviour-Smith said the firm had already taken responsibility by contributing to a $60m settlement fund to compensate investors.
"It's less about the blame game and more about getting people their money back," he said.
"We've dealt with this, we've moved on from it."
The $60m settlement announced in December was the largest cash payout obtained by the commission.
The deal was struck after the commission threatened to prosecute Forsyth Barr and Credit Sails arranger Calyon, an arm of giant French bank Credit Agricole, alleging the companies breached the Fair Trading Act when they marketed Credit Sails to retail investors.
"It was our involvement that brought about the settlement," said commission chairman Mark Berry.
While he was confident the commission would have prevailed in court, it was more important to get money back for investors quickly. "Prosecutions through the courts can take many years, by the time all appeal rights are exhausted. We knew we were acting for vulnerable investors, many of whom were retired and elderly."
In its report, the commission said describing the Credit Sails product as "protected" was misleading and the collateral that "protected" the product was in fact its greatest risk.
The commission said that although the product was unsuitable for retail investors and both companies held information confirming its unsuitability, retail investors were targeted.
The report placed equal responsibility on Forsyth Barr and Calyon for the way Credit Sails was structured and sold, although the commission agreed not to publish documents and emails from Calyon because they were provided voluntarily by an overseas company over which the commission had no power.
Nevertheless, there was evidence in the report that Forsyth Barr had pushed Calyon to make Credit Sails available to retail clients in New Zealand.
The commission found Calyon had arranged a Credit Sails product in 21 jurisdictions, but only two of those involved an issue to retail investors - New Zealand and Taiwan.
Other emails highlighted efforts to make marketing documents more attractive to investors. In one to Credit Sails arranger Calyon, a Forsyth Barr executive complains that the "sizzle" is being deleted from offer documents.
"One of the deletions we feel is harmful to the marketing of this offer. Remember we catch more flies with honey than vinegar!" the email said.
Another seeks removal of data on returns, which were "a big marketing negative".
Paviour-Smith said he was not proud of the emails exposed in the report, but they were a sideshow to the main issue of trying to get a good outcome for investors.