BREAKING NEWS
Queenstown airport evacuated after suspected bomb threat ... Read more
Close

Court action filed against Prince and Partners

JOHN ANTHONY
Last updated 16:38 20/08/2014

Relevant offers

Money

Duncan Garner: My fear is that my children will never be able to buy a house KFC signals plans to start door-to-door deliveries Kiwis thought to be less likely to help themselves at self-service checkouts Homeowners may get the benefit of best interest rates Giving the shoppers what they want: David Jones opens in Wellington Ten questions buyers should ask real estate agents Full house for auction as 'panic buyers' look to snap up homes Owner reunited with lost money after dropping thousands on Auckland street Reserve Bank opens door to much lower interest rates as it attacks the dollar Z Energy ends Countdown fuel dockets in favour of Fly Buys

The Financial Markets Authority (FMA) has used its new powers to litigate on behalf of investors against Prince and Partners Trustee Company, the trustee of failed finance company Viaduct Capital.

Viaduct collapsed in 2009 and was put into receivership in May 2010, owing 110 depositors $7.8 million.

The authority filed civil proceedings against Prince today, using its new power to "stand in the shoes" of another and exercise that person's right to take action against a financial markets organisation.

Law firm Chapman Tripp said the power came under section 34 of the Financial Markets Authority Act that was passed in 2011, but the FMA had until now been preoccupied by legacy cases from the finance company collapses.

Chapman Tripp partner Victoria Heine said section 34 enabled the FMA to bring cases before the courts that might not have been pursued otherwise.

"It's important because investors don't usually have the financial ability to pursue litigation themselves," she said.

It is the first claim filed by the FMA against a trustee.

The authority alleges that Prince breached the obligations it owed to Viaduct investors and to the Treasury by failing to protect the interests of investors in Viaduct. It alleges this resulted in loss to investors and the Treasury.

"The FMA has determined that it is appropriate for the court to consider the conduct in this case and where appropriate to award compensation to investors who suffered loss as a result of Prince's failure to fulfil its obligations as trustee," it said.

The FMA has brought separate criminal charges against individuals associated with Viaduct. They are still before the court.

The Serious Fraud Office (SFO) wound up its investigation into Viaduct in 2011, saying there was insufficient evidence to take it further.

At the time, the SFO said that although there was not enough evidence of fraud to warrant the use of its full investigative powers, other information it had found was a concern.

In March, the FMA filed charges against Viaduct directors Paul Neville Bublitz, Bruce Alexander McKay and Richard Timothy Blackwood.

They were charged with theft in a special relationship, making false statements in a prospectus and false statements made to Viaduct's trustee.

The charges carry maximum sentences of seven, 10 and five years' imprisonment.

Charges were also filed against Nicholaas Hendrik Wevers, but they were withdrawn after Wevers died.

 >Share this story on Facebook

Ad Feedback

- Stuff

Special offers

Featured Promotions

Sponsored Content