Finance Company Cases before the Court

FMA alleged that the Defendants:

- Five Star Consumer Finance Limited (FSCF) charges: made untrue statements in the investment statements and registered prospectuses of that company dated 20 September 2006.

It is also alleges that the directors made further untrue statements when they signed a prospectus extension certificates 21 December 2006.

- Five Star Finance and Five Star Debenture Nominee (FSF and FSDN) charges: offered securities in contravention of the Securities Act in that they did so without having registered a prospectus or provided investors with an investment statement. Further, that they offered investments in FSF and FSDN in advertisements that were not authorised advertisements for purposes of the Securities Act.

The SFO also laid charges against all four directors of FSCF.

The FSCF charges were laid indictably under section 58 of the Securities Act and carry a maximum penalty of five years imprisonment or fines of up to $300,000.

The FSF and FSDN charges were laid summarily under section 59 of the Securities Act and carry a maximum penalty of a fine not exceeding $300,000.

4 August 2008 in the District Court at Auckland (FSF and FSDN).

30 November 2009 in the District Court at Auckland (FSCF).

All defendants pleaded 'guilty'. Kirk and Macdonald were sentenced to over 2 years imprisonment on these charges on 22 December 2010. Bowden was sentenced to home detention.

Williams has applied to vacate his pleas of guilty. The applications is opposed. The application will be heard late March.

John Hotchin, Donald Young, Kenneth Moses and Mervyn Doolan

FMA alleged that the directors made untrue statements in the registered prospectus and investment statement of Nathans Finance NZ Limited (in receivership) dated 13 December 2006.

FMA also alleged that the directors made further untrue statements when they signed a prospectus extension certificate on 30 March 2007.

In addition FMA alleged that letters sent to members of the public advertising Nathans Finance debenture stock contained untrue statements about some of the matters referred to above. These claims do not apply to Mr Hotchin who had resigned his directorship by the time the advertisements were sent out.

The defendants denied the charges.

Criminal charges - These charges were laid indictably under section 58 of the Securities Act and carry a maximum penalty of five years imprisonment or fines of up to $300,000 plus $10,000 for every day the offence is continued.

Civil proceedings - The proceedings were issued under section 55C and related sections of the Securities Act. FMA applied for declarations of civil liability and civil pecuniary penalties of up to $500,000 against each of the five directors.

Criminal charges - filed on 12 December 2008 in the District Court at Auckland.

Civil proceedings - filed on 12 December 2008 in the High Court at Auckland.

Criminal charges - High Court trial began on 21 March 2011 and completed on 17 June 2011.

Hotchin entered a guilty plea and was sentenced on 4 March 2011 to 11 months home detention and 200 hours community service, and was ordered to pay reparation of $200,000.

Verdict delivered on 8 July 2011. Moses, Doolan, and Young were each found guilty on five out of the six counts in the indictment.  Sentencing was on for 2 September 2011. Doolan was sentenced for 2 years 4 months imprisonment with reparation of $150,000, Moses for 2 years 2 months imprisonment with reparation of $425,000 and Young 9 months home detention, 300 hours community service and reparation of $310,000. Appeals by Moses and Doolan against imprisonment on 27 September 2011 were dismissed.

Civil proceedings - stayed pending resolution of the criminal case.

Rodney Petricevic, Robert Roest, Bruce Davidson, Gary Urwin and Peter Steigrad

FMA alleges the directors made untrue statements in the investment statements and registered prospectuses of Bridgecorp and BIL dated 21 December 2006.

FMA also alleges that the directors made further untrue statements when they signed prospectus extension certificates for Bridgecorp and BIL on 30 March 2007.

The defendants deny the charges.

The SFO has also laid charges relating to these companies.

Criminal charges - these charges are laid indictably under section 58 of the Securities Act and carry a maximum penalty of five years imprisonment or fines of up to $300,000

Civil proceedings - the proceedings are issued under section 55C and related sections of the Securities Act. FMA has applied for declarations of civil liability and civil pecuniary penalties of up to $500,000 against each of the five directors.

Criminal charges -12 December 2008 (non-executive directors), 11 May 2009 (executive directors) in the District Court at Auckland.

Civil proceedings -12 December 2008 at the High Court in Auckland.

Criminal charges - High Court trial commenced 25 October 2011 (12 weeks).

Mr Davidson entered a guilty plea and was sentenced on 7 October 2011 to 9 months home detention, 200 hours community work and payment of $500,000 reparation.

Mr Urwin pleaded guilty on 9 November, 2011. Sentencing will be on 5 April 2012. Gary Urwin has applied to vacate his pleas of guilty.

Civil proceedings - stayed pending resolution of the criminal case.

Civil and criminal proceedings - Neal Nicholls, Owen Tallentire, Colin Ryan and Robert Sutherland

Criminal charges only - Wayne Douglas (executive director) (resigned as a director in February 2007)

FMA alleges that Capital + Merchant Finance's offer documents and advertisements misled investors.

FMA alleges that the directors made untrue statements in the registered prospectus and investment statement dated 15 August 2006. FMA also alleges that the current four directors made similar untrue statements in the registered prospectus and investment statement dated 10 September 2007.

In addition, FMA alleges that five advertisements distributed during 2007 contained untrue statements. These claims do not apply to Mr Douglas who had resigned his directorship by then.

FMA further alleges that Mr Nicholls and Mr Ryan knowingly misled FMA.

The defendants deny the charges.

Criminal charges - most of the criminal charges are laid indictably under section 58 of the Securities Act and carry a maximum penalty of five years imprisonment or fines of up to $300,000. Criminal charges are also laid against Mr Nicholls and Mr Ryan under section 59A of the Securities Act and carry a maximum fine of $300,000 plus $10,000 for every day the offence is continued.

Civil proceedings - the proceedings are issued under section 55C and related sections of the Securities Act. FMA has applied for declarations of civil liability and civil pecuniary penalties of up to $500,000 against each of the current four directors.

Criminal charges - 17 December 2009 in the District Court at Auckland.

Civil proceedings - 30 November 2009 in the High Court at Auckland.

Criminal charges - High Court trial set down for 16 April 2012 (9 weeks). Pre-trial hearing held 19 and 20 September 2011.

Trial set down for 11 February 2013.

Civil proceedings - stayed pending resolution of the criminal case.

FMA alleges that Lombard Finance & Investments' offer documents and advertisements misled investors.

FMA alleges that the directors made false statements in the registered prospectus dated 7 September 2007, as amended by a memorandum of amendments dated 24 December 2007, and investment statements dated 28 December 2007.

In addition, FMA alleges that a DVD advertisement distributed during 2007 and 2008 contained similar untrue statements.

The defendants deny the charges.

Criminal charges - these charges are laid indictably under section 58 of the Securities Act and carry a maximum penalty of five years imprisonment or fines of up to $300,000 plus $10,000 for every day the offence is continued.

Civil proceedings - the proceedings are issued under section 55C and related sections of the Securities Act. FMA has applied for declarations of civil liability and civil pecuniary penalties of up to $500,000 against each of the five directors.

Criminal charges -14 April 2010 in the District Court at Wellington.

Civil proceedings -1 April 2010 in the High Court at Wellington.

Criminal charges - High Court trial commenced 17 October 2011.

Sentencing will be 29 March 2012.

Civil proceedings - stayed pending resolution of the criminal case.

Vance Arkinstall, Richard Bettle, Terence Butler, Ann Butler, Paul Forsyth and Robert Barry Whale

FMA alleges that Dominion Finance Group's offer documents and advertisements misled investors.

FMA alleges that the directors made false statements in the Dominion Finance Group registered prospectus dated 13 September 2007, as amended by an extension certificate 20 December 2007 and the North South Finance registered prospectus dated 11 September 2007, as amended by an extension certificate 20 December 2007.

In addition, FMA alleges that a quarterly newsletter of Dominion Finance Group and a letter to the investors of both Dominion Finance Group and North South Finance distributed during 2008 contained similar untrue statements.

The defendants deny the charges.

Criminal charges - these charges are laid indictably under section 58 of the Securities Act and carry a maximum penalty of five years imprisonment or fines of up to $300,000 plus $10,000 for every day the offence is continued.

Civil proceedings - The proceedings are issued under section 55C and related sections of the Securities Act. FMA has applied for declarations of civil liability and civil pecuniary penalties of up to $500,000 against each of the directors.

Criminal charges - filed on 22 June 2010 in the District Court at Auckland.

Civil proceedings - filed on 4 June 2010 in the High Court at Auckland.

Criminal charges - Trial date awaited.

Civil proceedings - stayed pending resolution of the criminal case.

Stephen Charles Smith and Shane Joseph Buckley, and Raymond Tasman Schofield

FMA alleges the directors breached section 58 of the Securities Act by making untrue statements in documents offering securities to the public. FMA alleges that in substance Mr Schofield acted as a director of Belgrave.

FMA further alleges the defendants breached section 377 of the Companies Act 1993 by making a false or misleading statement to the trustee appointed to safeguard the interests of investors in Belgrave secured debenture stock.

The SFO has also laid charges against the three men under the Crimes Act 1961.

Criminal charges - these charges are laid indictably under section 58 of the Securities Act and carry a maximum penalty of five years imprisonment or fines of up to $300,000 plus $10,000 for every day the offence is continued.

The maximum penalty for a breach of section 377 is five years imprisonment or a $200,000 fine

Criminal charges - filed on 14 September 2011 in the District Court at Auckland.

Criminal charges - Trial date awaited.