Investors warned to brace for worst

19:11, Nov 15 2012

Hundreds of affluent New Zealanders face losing chunks of their life savings in what is feared to be a massive Ponzi scheme.

Yesterday, the High Court at Wellington made public the first receivers' report on Ross Asset Management.

It revealed that, of the $449 million the firm's 900 customers believed was being held on their behalf, little over $10m has so far been confirmed as existing.

Founder and sole director David Ross, 62, who is currently in hospital, has clients nationwide, though most are in the lower North Island. Many are understood to be retired farmers.

John Fisk, a partner at PricewaterhouseCoopers charged with untangling Ross' financial records, said more work was needed to establish whether fraud had taken place, but the situation bore the "characteristics of a Ponzi scheme", in which returns being paid are actually the money invested by depositors.

The Financial Markets Authority raided the company's Wellington offices after investors complained they were unable to withdraw their money.

Bruce Tichbon, who heads a group representing investors, said Ross seemed convincing, modest and on top of his game.

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