Insufficient grounds to prosecute WSD Global - SFO
The Serious Fraud Office (SFO) says it has closed down its investigation into WSD Global Markets Ltd and related companies.
The investigation began in October after it received complaints from overseas investors and New Zealand regulatory authorities, mostly related to deposits with WSBC, a bank formerly based in the Cook Islands, said SFO chief executive, Adam Feeley.
The SFO had investigated nine specific complaints concerning WSD and its related companies.
"The decision not to take the investigation further, should not be interpreted as an approval or endorsement of the WSD businesses," he said.
"The only message taken from the SFO's action should be that in relation to the specific complaints looked at the evidence available was not sufficient to support the laying of criminal charges."
The WSBC was placed in statutory management by the Cook Islands Financial Supervisory Commission in 2008, and its banking licence revoked with effect from December 31, 2009. Some critics of the company later alleged that the investments of many WSBC clients appeared to have been transferred to WSD-linked entities during the statutory management.
When the SFO began in October investigating allegations that WSD had failed to correctly account to investors for funds received, Mr Feeley said there was a "misconception" that the SFO had previously investigated WSBC.
"In 2008 we simply to provided assistance to the foreign authorities who were investigating WSBC," he said. "The file was closed once that role had been fulfilled."
Today he said that there had been "some misunderstanding" as to the identity of the company within the WSD Group that owed the obligations and the terms upon which they were owed: the probe involved WSD Global Markets Ltd, WSD Financial (NZ) Ltd, WSD Financial Group Ltd and others. The Thai Securities and Exchange Commission terminated WSD Financial (NZ) Ltd's futures trading licence on June 8 last year.
WSD Global Markets Ltd is accredited as an NZX futures and options firm, but none of the other companies was accredited or regulated by NZX.
The SFO began its investigation by executing search warrants at WSD Group's premises in Mt Eden, Auckland, and a private residence in suburban Glendowie, and said that WSD was "until recently controlled by former Wall Street Banking Corporation (WSBC) director, Riaz Patel".
Mr Feeley said today the SFO had concluded that the complaints related to commercial issues, and it did not identify material evidence to suggest that the misunderstanding arose from fraudulent activity.
"The fact that persons have not had their debts repaid is not in itself fraud," Mr Feeley said.
"This, coupled with some considerable difficulties in securing sufficient cooperation with many of the overseas complainants, has prevented us from taking this matter any further."