By Hamish Fletcher 5:30 AM Monday May 13, 2013
Tougher licensing rules for authorised financial advisers – like suspected Ponzi-scheme operator David Ross – won’t be introduced in a law change despite being suggested by the market regulator. Read more
Frank Marvin 09 May 2013
Some Queenstown investors have lost their life savings in the Ross Asset Management collapse, a man fighting on their behalf says. Read more
JASON KRUPP Last updated 05:00 30/04/2013
Ross Asset Management (RAM) investors have slated the Financial Markets Authority (FMA) for taking six months to directly contact them, saying the watchdog is doing a poor job of standing up for investors.
That was in reaction to the first piece of direct correspondence from the regulator that many of the victims caught in the RAM collapse have received. It was dated May 1 but sent last week, and contains a list of 45 detailed financial questions.
This is disturbing, that the Financial Markets Authority (FMA) will not release the second referee’s details.
BEGINS
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
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.
Begins
MADOFF INVESTORS CAN’T SUE SEC – Apr 11, 2013
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 thorough and competent investigation of Madoffs firm, Bernard L. Madoff Investment Securities Inc., despite having received detailed complaints.
Rising Cost of Ross Asset Collapse
Blair Cunningham – National Business Review – Thursday 14 March 2013
http://www.nbr.co.nz/article/what-ross-asset-collapse-has-cost-investors-so-far-bc-p-137228
The collapse of Wellington-based Ross Asset Management has so far cost investors $112,000 in legal fees, with a further $204,000 in liquidators’ fees yet to be charged.
Liquidators of Ross Asset Management and its associated entities have found $11 million in assets of the $450 million which around 900 investors thought was being managed on their behalf.
PwC liquidator John Fisk says since the company and associated entities went into receivership in November a further $86,000 has been paid in administration costs and expenses.
“This is primarily the costs associated with maintaining the Ross Group Companies’ offices on The Terrace and the employment of former staff to assist in investigations.
“Staff resigned from RAM when it went into receivership but PwC has since rehired at least two employees to help with investigations.
“The liquidators intend to vacate the offices shortly, which should reduce on-going overhead costs.”
The RAM liquidation committee, chaired by former commercial lawyer Jiohn Strahl, held its first meeting late last month – the details of which have now been released.
Tax returns
Mr Fisk has agreed to write to the IRD requesting an extension of time for all investors to amend their tax returns for the period ending March 31, 2008, the earliest period to which it would be possible to obtain a reassessment.
He has also told investors to consider what impact the receivership and liquidation of the group companies may have on their income tax return for the period ended March 31, 2012, if it has not already been filed.
Mr Fisk says PwC has yet to charge its $204,000 remuneration bill or pay $22,511 of disbursements.
Moves will also be made soon to recover debts from David Ross.
“According to the most recent set of financial statements, David and Jillian Ross are jointly indebted to Ross Asset Management in the sum of $3,491,579. Recovery action against Mr and Mrs Ross is expected shortly in relation to the repayment of this amount.”
He says the liquidation committee has encouraged PwC to act quickly to recover the debt, although he is uncertain about just how much money will be repaid.
Mr Fisk has previously indicated the sale of assets may not be out of the question to recover the debt.
RAM’s bank accounts in the 12 months leading to receivership show $17.5 million of investment sales, against $29.48 million of investor payments.
Jason Krupp 07/03/2013
The Internal Revenue Department may add its name to the list of parties affected by Ross Asset Management fraud.
In a report on the first meeting between PricewaterhouseCoopers and an advisory committee of investors, liquidator John Fisk said he had begun talks with the IRD over refunding tax payments made on fictitious Ross earnings.
Claim to test Ponzi features in Ross firm
JASON KRUPP
Last updated 05:00 29/01/2013
A claim over shares held by Ross Asset Management could determine how those who lost money in the firm’s collapse try to claw back their losses back, says an expert.
NBR – Ross Asset investors treated for depression
Blair Cunningham | Thursday January 17, 2013 | 9 comments
The Ross Asset Management liquidation is taking its toll on investors, with some being treated for depression.
NBR – Ross Asset Management liquidators face hurdles in untangling mess
Businessdesk | Monday December 24, 2012
PwC’s John Fisk and David Bridgman have found another pitfall as they try to untangle the mess surrounding Ross Asset Management which may make it more difficult to try and recovery the missing investor funds.