The Financial Markets Authority (FMA) has filed criminal charges in the North Shore District Court against an unnamed company & its NZ-based director for breaching the Financial Service Providers (Registration & Dispute Resolution) Act (FSP Act).
The FMA said it hadn’t named either the company or the New Zealand-based director in this release because the court hadn’t yet heard the issue of name suppression.
The company is charged with 2 counts of breaching section 12 of the act and the NZ-based director is charged with 2 counts of breaching sections 12 & 40.
Section 12 provides that no person, including a corporation, can hold out that it is in the business of providing a financial service unless it is registered on the Financial Service Providers Register & a member of an approved dispute resolution scheme. Section 40 covers a director’s liability if he knowingly authorises or knowingly fails to prevent a corporation committing an offence under the act.
Each charge for breaching section 12 carries a maximum fine of $300,000 for a company and a maximum penalty of either $100,000 fine &/or one-year jail term for an individual. The authority said these charges were the first of their kind under section 12.
The FMA alleges the company continued to hold out on 2 websites that it was registered on the Financial Service Providers Register after it had been deregistered and despite subsequent warnings from the Companies Office regarding misleading statements on its website as to registration.
FMA head of enforcement Karen Chang said: “The FMA will hold directors of companies to account where the company is in breach of the FSP Act and we’re concerned the register is being abused. Our intention to target directors who encourage or facilitate abuse of the register was set out in our report in September 2017, so a clear warning has been given.
“The register has been abused by businesses & individuals who use New Zealand’s reputation as a well regulated country to target overseas investors. The FMA invests significant time & resources in tackling this problem to protect the legitimacy of New Zealand’s financial services firms.”
Attribution: FMA release.