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Ross victim complains about FMA

HAMISH MCNICOL
Last updated 05:00 20/07/2013

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An investor in David Ross' alleged $400m Ponzi scheme has gone to the Ombudsmen with a formal complaint against the Financial Markets Authority, claiming it failed to perform its statutory obligations.

Barry Prince, who invested with Ross Asset Management, has set his sights on the financial market regulator which he claimed failed to carry out due diligence on Ross.

In the letter of complaint, Prince said the FMA seemed to have rubber stamped Ross's application to become an Authorised Financial Adviser without properly checking its content.

"Their failure to perform their statutory obligations resulted in hundreds of elderly investors losing their retirement funds," he wrote.

Prince claimed the FMA only realised Ross had falsified information in his application after investors had discovered and informed them of a mistake in mid-2012.

He wanted the Ombudsman to ascertain whether the FMA had carried out the necessary checks on Ross before he was approved as a financial adviser.

Ross, 63, appeared in court this month charged on eight counts by the FMA and Serious Fraud Office, but was remanded without plea until August 22.

He was charged by the FMA with providing financial services when he was not registered to do so, as well as making and supplying false or misleading statements and information to the FMA.

The first of the FMA charges carries a maximum penalty of 12 months' jail or a $100,000 fine, and the other two maximum fines of $100,000 and $300,000 respectively.

Ross faced a further five counts from the SFO for his alleged $400m Ponzi scheme.

The delay of legal proceedings against Ross this month, after eight months of waiting, irritated investors who turned their attention to the SFO and FMA. Fairfax NZ

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- BusinessDay.co.nz

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