NBR print edition 5/4/13 – FMA declines NBR access to information

This is disturbing, that the Financial Markets Authority (FMA) will not release the second referee’s details.


NBR Print edition 5/4/13 – FMA declines NBR access to information – Duncan Bridgeman

The Financial Markets Authority is refusing to disclose the identity of a second referee supporting David Ross’ application to become an authorised financial advisor.

To get their ticket, and AFA is required to pass a “good character” assessment with support from two testimonials, including one from a recognised industry or professional organisation.

Mr Ross became an AFA on July 12, 2011 after the FMA authorised him to provide “financial advice and discretionary investment management services” under section 55 of the Financial Advisors Act 2008

Following NBR enquiries, FMA confirmed in December that the Institute of Finance Professionals (INFINZ) provided one testimonial.

However, the regulator will not release details sought by NBR under the Official Information Act of a second  testimony provided by a client, saying the identification is subject to the Privacy Act.

NBR sought the identity on public interest grounds including the public having a right to know the calibre of referees backing this country’s AFA’s, especially given  the collapse of Ross Asset Management.

Article continues in print edition

Bloomberg – Madoff investors can’t sue SEC

There have been constant calls from RAM investors to sue the FMA in NZ for failing to follow up on multiple warnings over the years that RAM was fraudulent. Our advice has been its hard to sue the NZ government and RAMIG’s efforts for now would be better used elsewhere.

The following press from the Madoff case in USA shows the same problem there, the federal Appeals Court refuses to support a suit against the Securities Exchange Commission (or SEC, the equivalent of the FMA and its predecessor the Securities Commission in NZ). This is despite the SEC being given multiple warnings on Madoff, and doing multiple investigations of Madoff and failing to find anything wrong.

In NZ the FMA and the Securities Commission, as far as we know, did not even investigate Ross Asset Management, despite multiple warnings.

However, other aspects of the US law are still of interest to RAM investors. The US courts vigorously pursue claw back in Ponzi cases, and in this regard they set a common law standard for the NZ courts to specifically accept or reject.



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Text here abridged.

Bernard Madoff’s investors can’t sue the U.S. Securities and Exchange Commission for failing to uncover his massive Ponzi scheme, a federal appeals court ruled.

The regulator’s “regrettable inaction” is shielded by law, the New York-based appeals panel said today, upholding a lower-court decision to dismiss suits in which investors accused the SEC of negligence.

“Despite our sympathy for plaintiffs’ predicament (and our antipathy for the SEC’s conduct), Congress’s intent to shield regulatory agencies€™ discretionary use of specific investigative powers€ defeats the investors€™ claims, the court said.

The SEC’€™s inspector general found in a 2009 report that the agency had failed to make a €œthorough and competent€ investigation of Madoffs firm, Bernard L. Madoff Investment Securities Inc., despite having received detailed complaints.