Record $60m Credit Sails deal almost paid out
A record $60 million settlement fund has been almost completely paid out to investors in a failed financial product called Credit Sails.
Of 2218 investors owed money, just one owed $17,000 could not be found and repaid. The money was obtained by the Commerce Commission from the firms involved in marketing Credit Sails - sharebroker Forsyth Barr and multinational bank Credit Agricole - who agreed to pay $60m to settle a claim they had engaged in misleading and deceptive conduct in breach of the Fair Trading Act.
The firms have never admitted liability.
Commission chairman Mark Berry said that completion of the payment process, organised by the Public Trust, was a fantastic for investors. "Most of the investors in the fund were elderly, and it was important for the commission to settle this in the most advantageous way for these people," Berry said.
"Hopefully, having the money returned to them will have a big impact on the quality of their lives."
The payout represented reimbursement of about $870 for every $1000 lost when Credit Sails failed in 2006. "Without the settlement reached by the commission investors may have only received $20 for every $1000 invested," he said.
Credit Sails were issued in 2006, raising $91.5m. They were marketed as high- yielding capital-protected notes, but their complex structure using bond insurance derivatives led to virtually total losses. Fairfax NZ
- Taranaki Daily News
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