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Prudential process essential to head off FMA

Chris Hutching for NBR NZ Property Investor
Thu, 25 Sep 2014

A recent Financial Markets Authority court case sent shivers down the spines of many directors and senior executives.

Property companies featured most among those targeted by the FMA with two more prosecutions in the pipeline.

Those cases may be less decisive than the other recently successful case because at least one of them will be contested.

The successful case that rated headlines was the prosecution of directors Hayden George Jones and Thomas Alexander George Jones and fine of $35,000 each for failing to file financial statements for Heritage Park Taupo and Prudential Real Estate Investment.

But law firm Chapman Tripp partners are telling clients to relax a little – “the sky is not about to fall in” on non director participants.

Chapman Tripp says the Financial Markets Conduct Act will fail if it ties up investment offers in unnecessary bureaucracy (as some market participants claim).

The law firm points out a high threshold is required to prove recklessness and intent.

One of the most important elements in an offer of securities is an independent due diligence committee with all the procedures spelled out at the outset.

The client newsletter provides considerable detail on steps company officers can take to ensure they stay on the correct side of the law. 

Chris Hutching for NBR NZ Property Investor
Thu, 25 Sep 2014
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Prudential process essential to head off FMA
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