UPDATED-The Securities Commission has confirmed that it has laid criminal charges against Huljich Wealth Management and former managing director Peter Huljich.The charges, laid under the Securities Act, carry a maximum penalty of three months in pri
UPDATED-The Securities Commission has confirmed that it has laid criminal charges against Huljich Wealth Management and former managing director Peter Huljich.
The charges, laid under the Securities Act, carry a maximum penalty of three months in prison and a $300,000 fine.
The Commission alleges Mr Huljich and Huljich Wealth Management misled prospective investors by misrepresenting the investment performance of the scheme’s funds in offer documents.
The offer documents contained graphs comparing the Huljich KiwiSaver Funds’ investment performance to other competitor KiwiSaver funds but failed to disclose that the Huljich performance figures included related party payments made at the direction of Mr Huljich, who resigned from the company in March.
Those payments had a significant impact on the Huljich KiwiSaver Funds’ investment performance figures.
The commission also alleges Peter Huljich made untrue statements in the scheme’s registered prospectuses, which included summary financial performance information but failed to disclose the related party payments.
The commission alleges that the misleading and false statements were made in the scheme’s registered prospectus dated August 22 2008 as amended on February 13 2009, the registered prospectus dated September 18 2009 and investment statements distributed during the period May 1 2008 to January 25 2010.
The first call of the charges will be in the District Court in Auckland on Friday 14 January 2011.
KiwiSaver provider Huljich Wealth Management says it will “vigorously defend” proceedings laid against the firm and its founding partner Peter Huljich in relation to alleged breaches of the Securities Act.
Huljich executive chairman John Banks confirmed in a statement this evening the Securities Commission had filed proceedings against Mr Huljich and the firm but stressed no one else in the company was part of the proceedings.
“These matters have been in the public arena for some time," former Auckland mayor Mr Banks said.
“The proceedings will be vigorously defended and give the company the opportunity to set the record straight. It needs to be remembered that not one investor has lost any money in relation to these allegations,” Mr Banks said.
Hujlich’s troubles centre on allegations former managing director and chief investment officer Peter Huljich manipulated the fund’s investment performance by using related party transactions to cover investment losses.
In March Peter Huljich resigned and former National Party leader and Reserve Bank Governor Don Brash took over.
Last month Dr Brash also resigned and sold his 4.9% stake in the company.
Previously Huljich Wealth Management was told to rewrite its investor statements for retirement fund returns after previous returns did not show Mr Huljich had made two payments totalling $150,000 in periods ending March 2008 and March 2009 as compensation for investment decisions he made.
Mr Huljich has said he felt morally responsible for the investment decisions and there was no intention of boosting the funds' performance, and said they made no difference to performance ranking of the company's KiwiSaver scheme.
At the time the commission said it was looking into whether certain income that was received by the fund was incorrectly reported as investment income in the presentation of historical investment returns for the fund.
