FMA to sue Strategic Finance directors
Directors of failed Strategic Finance are being pursued by authorities over alleged breaches of the Securities Act.
Following a two-and-a-half-year investigation the Financial Markets Authority said it was intending to file civil action against Kerry Finnigan, Graham Jackson, Marcel Lindale, Timothy Rich, Denis Thom and David Wolfenden.
A seventh Strategic director, former New Zealand Rugby Union boss Jock Hobbs, died last year.
The FMA said the alleged breaches of the Securities Act related to claims made in the company's prospectus and advertising between March and August 2008.
Strategic collapsed in March 2010 under the weight of bad loans made to property developers, owing 11,000 investors $383 million.
The FMA's head of enforcement Belinda Moffat said the six former Strategic directors had been notified of the intent to take action.
"FMA's role as a publicly-funded litigant, acting in the public interest, necessitates this announcement to keep the market and investors informed," she said.
Strategic's receiver PricewaterhouseCoopers announced in December it was also filing civil action against the directors.
Receivers have said in the reports investors are likely to receive returns as little as 12 cents in the dollar.
The FMA said the directors and PWC were "now engaged in settlement discussions with the directors on a without-prejudice and confidential basis".