FMA backed off Jock Hobbs investigation

A Financial Markets Authority investigation into director Jock Hobbs' involvement in Strategic Finance's collapse stopped last June because of his deteriorating health.

Mr Hobbs, a former All Black and director of Strategic Finance, died on March 6 after a long illness.

NBR Online understands Mr Hobbs’ illness could have encouraged the FMA to hit the brakes on its Strategic Finance investigation.

That included whether Mr Hobbs, along with other directors, had committed a breach of the Securities Act.

However, the FMA has just confirmed it decided to close the book on Mr Hobbs’ involvement on the basis of "medical evidence."

Mr Hobbs was informed, through his lawyers, on June 14, a spokesman said.

But the FMA’s investigation into whether other parties have committed offences under the Securities Act is continuing.

No decisions on possible charges have yet been made.

Strategic Finance was one of this country’s largest finance company failures when it was placed in moratorium in 2008, owing about $400 million to 13,000 investors.

It’s now gone into receivership and debenture holders have been returned 7c in the dollar, which equates to $26 million.

Receivers PwC said last week another small payment can be expected from property sales next month.

This article is tagged with the following keywords. Find out more about My Tags

Post Comment

54 Comments & Questions

Commenter icon key: Subscriber Verified

Maybe Jock's conscience got the better of him and he coughed up all the required evidence to the FMA and SFO on the Strategic directors and Consultant - Jock's evidence would put them all away for a very long time and make him a hero in the finance sector as well as the rugby world

One can only hope that justice prevails

Reply
Share

Can someone please explain to me what is the difference in behaviour between Hobbs and Hotchin? Why are we supposed to revere Hobbs and despise Hotchin?

Reply
Share

Because Hobbs was a prominent All Black and Rugby official,while Hotchin is not.

Reply
Share

When are the FMA and SFO going to act on Strategic - word has always been that they are waiting for Jock Hobbs to pass away - well he has now.

I am not on the " feel sorry for Jock camp"
I am on the "feel sorry for the investors who got fleeced camp" -

The whole world knows that there were some extremely dodgy deals done at Strategic - Bob's Cove, Soho etc etc

There are no excuses now from Mr Key down to the FMA - do your jobs that the taxpayer pays you to do

Reply
Share

Adam Jock made a contribution to this country thru Rugby and that must be recognised. Quite separately hewas involved with Strategic Finance where serious allegations of wrong doing have been made. It remains to be seen if these are proven.
On the other hand Hotchins only contribution to society has been thru Amandas propping up the high end retail fashion tade single handedly for a period. it remains to be seen whether or not it was Hanover investors who financed Amandas spending habits.

Reply
Share

Bollocks

Jock was probably as guilty as Hotchin - his estate has the loot

Jock or his wife may not have spent the loot - so what

Reply
Share

Wasn't Hubbard a sick man also?? This is outrageous behaviour by the FMA and as distasteful as it might be to some, Hobbs has an estate that they can dip into. If this was an IRD investigation, you can bet death wouldn't mean the end to it .

Reply
Share

Hubbard's crime was he was useless at rugby, supported Labour and liked helping new business and rural business.

He didn't belong to the Northern Club or Business Round Table as he was too busy trying to help Kiwi's.

Reply
Share

Hubbard was not an all black or prominent rugby union official.
Hubbard came from an impoverished household.
Hobbs did not.
hubbard did not go to the right schools.
Hobbs did.

Reply
Share

Hotchin is a crook, no bones about it. He will get his in the end. He deserves to swing.

Reply
Share

Yet again the spiteful venom of the vocal minority rears its ugly head. Clearly you've read all the court documents relating to Hanover and its directors... of that's right they haven't been charged yet.

It seems a very long long time ago people were considered innocent until proven guilty. In Hotchin's case the FMA have frozen his assets over 15 months ago without any charges being laid. That is not justice by any stretch.

As for the comments about Hotchin's wife, for God's sake people need to get over themselves.

As for the FMA's approach to Strategic Finance and Jock Hobbs, justice must be seen to be fair to all involved, regardless of who they were - rugby players or not.

Reply
Share

Justice for investor's - appears not the way govt & SFO see it.

SCF/Hubbard -
1. Too many "big boys" names in arena so we'll go after the old one & overlook everything else.
2. Why are people/investor's questioning insider trading?
3. Why no public inquiry into SCF? Appears govt would be embarressed by this interference!

Honesty doesn't pay.

Reply
Share

If the FMA and SFO don't act on Strategic within the next week or so, they will prove they do not protect NZ Inc and are pussy's to the political machine - no integrity at all

Reply
Share

and integrity is a 9 letter word...

Reply
Share

As I see it there are two sides to Jock (a) the kiwi legend rugby hero and saviour of our national sport - in this case all that has been said about him and his contribution is true, and (b) the financier and leader of Strategic finance, a business so poorly run that its hapless investors have lost $100m's. It should be remembered that the Strategic directors including Mr Hobbs sold the business for circa $200m to Allco (OK they didnt get all cash - but the deal was still very lucrative). I have always thought it is inappropriate to run down someone who has tragically died. In this case Mr Hobbs is not evil and did significant good for us as a country.

Reply
Share

Jock as player and administrator did what he did for his own personal satisfaction. To suggest he saved our national sport is fatuous. If anything respect him for his passion, professionalism and determination. All admirable qualities. But because you like the sport of rugby it does not elevate him to a deity. And besides, you have no idea what positive things could have become of the sport had the NZRFU been sidelinedvin the mid 90s. Itbis also clear that Jock used his profile to raise debenture debt. Just like Hanover used Richard Long. You and I both know little about Hotchin so you cannot suggest that he also did not possess the same qualities as Hobbs. What we do know is both were motivated by money and the lure of building a big business. If either have screwed up and acted fraudulently then tear them apart. But lets stop championing people for silly reasons, like he saved our national sport. Or demonising people because they built a big
house

Reply
Share

Hear..Hear..!

Reply
Share

Check out the deals that Strategic Finance did and many many were traceable to the rugby fraternity.

One character borrowed at one stage over 50% of Strategic Finance's total book! What kind of madhouse finance entity do that?????

Whether there was any wrong-doing by Strategic Finance is however still being investigated.

Reply
Share

With all due respects to Jock Hobbs (RIP) never ever, ever, get involved in any sort of business which have lawyers at their helm. They are the most hapless of all business people. viz Hobbs/Graham et al

Reply
Share

I read the comments on threads like this, and understand why I'm a slave to the Big Brother State, and not a free man.

Was it state schooling that has ensured a complete moronacy amongst the envy ridden great unwashed? That no one seems to understand the basic tenets of a free society anymore?

... The <a href="http://www.solopassion.com/node/8802">rule of law is destroyed in New Zealand. Mark Hotchin is about to go into his sixteenth month frozen</a>, and we get the BS above.

Right. That's it then. Pretty well all over for the West.

Jock, you did well. Way better than anyone above on this thread, or, most likely to follow.

Reply
Share

On the contrary.

There are safeguards in any free society and one of the safeguards is against scoundrels running off with their spoils.

The judge is Hotchin's case has found just cause after an application by the SFO.

Long may this basic tenant of a free society survive!

Reply
Share

I couldn't care less about Hotchin, the man. The point of my link was the principles involved, and how the State has ditched the concept of the rule of law, to the detriment of the freedom of us all.

Tell me, how is sixteen months with frozen assets and still no charges - looking to be no criminal charges because the State can't make a case - different to detention without trial in any other police state?

Can you see beyond Hotchin to the real issues here?

Reply
Share

Tribeless identifies with Hotchkin and his kind.
Hoodwink the public and flee with the booty.
Top marks to the state for their action.
The man is not even behind bars.
Creditor protection in this country has always been woefully weak.
It is about time the tide was turned.
Unfortunately the abolotion of gift duty will assist the rogues in society..

Reply
Share

What is happening is no different to having all of ones assets placed into receivership.
The state are correctly looking outside the company structures and focusing on where the ill gotten gains have been stored.
Any NZ resident who can afford to build a $43 million home has no business sense and not surprisingly has been associated with insolvent companies.
Furthermore,the only way of accumulating such funds is by unscrupulous means..

Reply
Share

The State have no right to do this. The only reason there is little debate is because the med a have told us we are not to like Hotchin . Because we are too lazy to think we accept that proposition.
People talk about being ripped off by Hanover or Strategic. Because investors lost money does not mean they were ripped off. People lose money everyday on the share market.

I have not seen one column centimetre asking investors in Strategic, Hanover et al one simple question " why did you think you were getting 10% interest on your money when the banks were offering 5%? "

The answer, of course is simple: because there was a lot more risk. Why aren't we accusing these investors of greed? Why are we afraid to ask these questions? Why do we insist on demonising coy directors or other business folk who clearly have committed no
fraud? Because we like hating people who we fear might be enjoying life more than us.

Reply
Share

Excellent commentary me boy. The so-called mum and dad investors where all well and happy taking the money when it was going well, but then the world went into a financial mess that little old New Zealand could not escape from.

To suddenly blame directors of well run companies for "failing to see the final impact" for investors is all well and dandy in hindsight, but the real villians are the property developers who borrowed the dosh in the first place and couldn't pay it back... remember Krutziner, McKenna, Henderson, Peters, etc etc etc.

Mums and Dads took the risk and sought a greater return than the banks. Risk means that they were taking a greater chance. But oh no lets make the directors swing from the trees.

No wonder New Zealand has a tall poppy syndrome, its at the arse end of the world and people are so bitter and twisted about someone else doing well that they need to be knocked back to the ground to be with the sparrows - pecking a living off the ground.

Reply
Share

Sorry I don't quite agree with you and Adam. Sure the investors were getting twice what the banks were offering - however they still weren't told that the directors/owners of these companies were on lending the money in deeply subordinated quasi equity positions - which were dressed up in the prospectus' as simple second mortgages. Further, many of these deals were done at 20% plus returns (again this was never disclosed to the investors). The point I am making is that while they were getting say 10% the risk they were taking was true 20% plus equity risk .... but they were not being paid for it. Effectively the 10% plus margin was going to the owners/directors of the finance companies for taking no risk! This was never properly disclosed or explained to the investors - if it was do you think they would have poured the money in?Many of them were not being greedy just trying to maximise investment returns based on the information they had at hand. Which is what every investor strives to do?

Reply
Share

Agree the returns offered never reflected the true risks. Add in the fact that there were in some cases misleading statements and you cannot put all of the blame on the investors.

I think some individuals had too much invested in this sector and too much in any one company - that is more fundamental and for that investors (and more so their advisors) do have to accept some of the blame.

Reply
Share

If anyone, developer, director, CFO acted fraudulently then they should swing. If investors have been misled then they deserve to have the misleader stand accountable. But if the problem is they assumed all was well with the investments the finance company they were lending to and never made the inquiry then, hard as it sounds, tough luck.

A big part of the problem is the State. They mandated that companies produce a 500 page prospectus that not a person in the world ever read, let alone understood. The assumption the poor investor then makes is that because these promotors have complied with the regulations then all is well with this investment. What ever became of caveat emptor?

Reply
Share

Adam yes your right - the average investor had no chance to understand what was going on in these companies. There was no alignment in interests and you mix in smart aggressive owners (and Consultants) the investors had no chance.

Reply
Share

Yes Bud and especially given the dodgy financial planners who preyed on the public to clip the ticket.
Oh well at least they cannot get any more all expenses paid trips on Roddy's yacht,because Roddy no longer controls it.

Reply
Share

Again, you make big assumptions in the pursuitnof makingpeople you don't like wrong. How do you know the terms upon which money was lent to developers?

More so, should the developers have had a greater insight into the impending Market collapse than the investors?

At the 20% that Bud Fox talks about, why do the developers have to burden all the downside?

The problem is intellectual laziness and a State that gallops under the banner that they can remove from life every potential downside and provide even greater upsides.

Now, we are really starting to put our collective fingers on the real scam artists.

Reply
Share

A simpleton can conclude that it was the responsibility of the directors of companies such as Hanover to undertake responsible lending.
The fact that funds were advanced in a manner which displayed a major lack of governance,is patently obvious.
Prudent directors would not have signed off on such irresponsible loans.
The major banks still survive because they have directors who are not fools,and have proper governance structures in place to ensure that the overall risks they take are within acceptable boundaries.
The various failed property developers were freely advanced funds by companies who overlooked their responsibilities to investors.
As for the trustees for the debenture holders,my cat or dog would have been just as effective.

Reply
Share

On that basis,we may expect Tribeless to migrate to the east.
Even better still,why not migrate to a tax haven on an island in the Pacific.

Reply
Share

Wasn't Jock Hobbs a lawyer by training?

Member of the bar?

Reply
Share

Well if I was an investor who got screwed over by Strategic I sure as hell wouldnt give a toss about the health or otherwise of one of the chief protagansists. The investigation should never have been stopped and its a disgusting that this was allowed to eventuate. Are we to set aside the numerous lives ruined by the Strategic collapse because of one mans illness? And frankly what he did or didnt do on the rugby field is irrelevant.

Reply
Share

But you need to remember that if you are an All Black or former all Black,you have the status of a god like creature in the eyes of some.
All is forgiven.
it cannot be disputed that Colin Meads and Jock Hobbs were huge magnets in attracting funds into the respective finance companies they had an association with.
All that glitters is not gold.

Reply
Share

But you need to remember that if you are an All Black or former all Black,you have the status of a god like creature in the eyes of some.
All is forgiven.
it cannot be disputed that Colin Meads and Jock Hobbs were huge magnets in attracting funds into the respective finance companies they had an association with.
All that glitters is not gold.

Reply
Share

I've not once, not once, defended Hotchin the man: I couldn't, I know nothing about him. He may well be a reprobate. I feel sorry for all investors who've lost money. But that is not the point. That was never my point.

I am writing on the principle.

Repeat. I am writing on the principle.

The State has now been able to cut an individual off from their assets for coming up to sixteen months, not only without trial, but without charge.

I would have hoped the SFO basically had a case before the freeze was granted, but now it's looking like they don't even have a criminal case of fraud, as State is having to revert to inappropriate civil action via the FMA.

Does anyone understand the principles behind the rule of law, and what happens when the State puts itself beyond them?

Airhead NZ, we have arrived. Proof? This statement from above:

<i>"Furthermore,the only way of accumulating such funds is by unscrupulous means..</i>

Goodness me. Envy, and uninformed personal vitriol: bad basis to run a country on.

Reply
Share

... In fact, to the writer of the quote I gave just above: you're not an SFO staffer are you?

Given sixteen months and no criminal charge, it appears the powers that be were working on the same theory as you.

Who wants to live in that country? Because it ain't one where freedom is flourishing.

Reply
Share

Then why are you still here bleating on about nothing,operating a website which has no interested parties,part of a political party which noone votes for.
There is a whole world out there.
make the break.
Take a risk.
Go to a place where your constant depression can be cured by consorting with likeminded people.

Reply
Share

Tribeless - you keep whining about not living in NZ. Well for fecks sake pack your bags and go and give us all a break.

Reply
Share

As I said: Airhead NZ.

Reply
Share

I think all of you have no idea of what went on at Strategic Finance

All the dodgy deals were not undertaken by Jock Hobbs. They were undertaken by the Consultant and the executive directors and CEO. They are the ones that should be on trial - not Jock

Reply
Share

You are obviously the Consultant. I assume it went something like this at board meetings: " Jock, we are about to go over a dodgy deal, why don't you step out for a coffee?"

Reply
Share

I thought under NZ company law, all Directors are culpable?

Reply
Share

Quite correct Paul.
That is why we see The Lombard and Bridgecorp directors in the dock.

Reply
Share

The 2009 Annual Return has six directors listed,including Hobbs.
Responsible directors of such a company will be fully informed in regard to its business and should have governance policies in place in regard to the authorisation of loans.
Which should include directors' approval for all loans over a certain size.
Simple stuff.
Hobbs is in boots and all.
A director cannot blame consultants or employees.
The governance lies with them.
If they are not capable of proper governance,the answer is to resign.

Reply
Share

I am no advocate for the US legal system or what has happened in the aftermath of the financial crisis. But at least to some degree their system goes after the individuals and beneficiaries of the corrupt investment schemes.

For instance, legal council chasing Madoffs so called investments, chased down early investors who had recieved money from Madoff and got effectively refunds to be used in the distribution to creditors. This included chasing Family Trusts where the investor had died.

If Hobbs family trust was found to have benefited illegally based on his actions, then why shouldn't the creditors get some or all money returned from the trust.

and in reply to Paul Marsden, yes all directors are culpable. In a conflict of interest they may excuse themselves from a vote, but that doesn't excuse themselves from a collective action taken against the Board it would just mitigate the situation. But of course there must have been a bonafide declared conflict of interest.

I am sorry, but we must see justice being dealt out to the directors and those who benefited from their very very poor standards, and in many cases a total lack of a moral compass when dealing with investors money.

Reply
Share

Absolutely Chris it was a complete lack of morality on their part.

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7951 -0.0014 -0.18%
AUD 0.9053 -0.0027 -0.30%
EUR 0.6279 0.0014 0.22%
GBP 0.4961 0.0018 0.36%
HKD 6.1674 -0.0107 -0.17%
JPY 85.2570 0.0180 0.02%

Commods

Commodity Price Change Time
Gold Index 1248.5 1.960 2014-10-21T00:
Oil Brent 86.2 -0.850 2014-10-21T00:
Oil Nymex 82.5 -0.270 2014-10-21T00:
Silver Index 17.5 0.195 2014-10-21T00:

Indices

Symbol Open High Last %
NZX 50 5233.1 5284.3 5233.1 0.89%
NASDAQ 4359.2 4419.5 4316.1 2.40%
DAX 8934.5 8957.2 8887.0 0.43%
DJI 16406.0 16620.8 16399.7 1.31%
FTSE 6372.3 6393.4 6372.3 0.29%
HKSE 23300.5 23460.8 23088.6 1.37%
NI225 15038.2 15195.8 14804.3 2.64%