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FMA Orders Whimp to Disclose Warning

Page last updated: 6 May 2011

Media Release
6 May 2011

The Financial Markets Authority (FMA) has today ordered Mr Bernard Whimp and associated persons to include a warning from FMA at the beginning of any unsolicited offer they may make.

The order can be found at Warning Disclosure Order under Section 49 of the Financial Markets Authority Act 2011. The order requires that:

  • any offer document containing an unsolicited offer by Mr Whimp, a number of limited partnerships associated with Mr Whimp (the Whimp partnerships), or any associated persons must contain, at the beginning of that offer document, a warning statement in the form attached to the order (warning statement);
  • the warning statement must be printed in a particular font size, colour and layout,
  • Mr Whimp and the Whimp partnerships must provide a copy of the order to their associated persons.

"One of FMA's principal objectives is to ensure New Zealanders have the information and resources they need to make sound investment decisions," said FMA CEO Sean Hughes.

"This order is intended to ensure any person who who receives an offer from Mr Whimp or his associates to buy their shares or other securities will have the information they need to decide if that offer is in their best financial interests."

While Mr Whimp has previously made offers to shareholders in NZX listed companies, this warning applies to any future unsolicited offers. This would include shares or any other securities, such as an investor's stake in a finance company.


Roger Marwick 04 471 7659


Under section 49 Financial Markets Authority Act 2011, if FMA has issued a warning, it may make an order that requires any offer documents of the type specified in the order to contain a copy of the warning in a prominent position, or be accompanied by a copy of the FMA warning (a warning disclosure order).

Before making a warning disclosure order, FMA must first:

  1. issue a warning about any matter relating to a relevant person
  2. give the relevant person at least three working days written notice that FMA may make a warning disclosure order and the reasons why FMA is considering exercising that power
  3. give the relevant person an opportunity to make written submissions and to be heard on the matter within that notice period,
  4. have regard to whether exercising the power contributes to its function of promoting the confident and informed participation of businesses, investors and consumers in the financial markets.

FMA issued a warning on 2 May 2011 about unsolicited offers that may be made by Mr Bernard Whimp and entities associated with him. The warning is available here.

The order binds Mr Whimp, a number of limited partnerships associated with him and associated persons of Mr Whimp and the limited partnerships. This would include any limited partnership or company that Mr Whimp may form after the date of the order.

The limited partnerships associated with Mr Whimp are: Carlyle Securities LP, Cargill Securities LP, Carrington Securities LP, Chase Securities LP, Energy Securities LP, Fairfield Securities LP, NZ Credit Securities LP, NZ Investment Securities LP, Lineside Partners LP, Pearson Securities LP and Powershares LP.

FMA made the warning disclosure order on 6 May 2011 against Mr Whimp, under section 49(1) of the Financial Markets Authority Act 2011 for the following reasons.

  1. Mr Bernard Whimp and associated persons have made unsolicited offers to members of the public, including offers to purchase securities for less than the current market price and offers to purchase securities with payments to be made in instalments over 10 years.
  2. FMA has received a large number of complaints from members of the public in relation to the unsolicited offers made by Mr Whimp and associated persons, including statements to the effect that members of the public were confused or misled about the true terms of the offers.
  3. FMA considers that a fair, efficient, and transparent financial market requires the investors and consumers of that market to make fully informed decisions on the basis of the best information available.
  4. The warning is intended to inform people receiving such an offer of the likely terms if the shares were sold on the open market, so that the people receiving the offer are able to compare the terms of selling securities under an unsolicited offer from Mr Whimp and his associated persons with selling those securities on the open market. FMA considers that this comparison is essential for investors to make an informed decision about whether to sell their investment.
  5. The warning also cautions investors to read through the offer carefully and to seek advice.
  6. Including the warning in a prominent place in the offer document will ensure investors have an opportunity to read the warning before agreeing to sell their securities.

A person who does not comply with an order made by FMA under section 49 of the Financial Markets Authority Act 2011 commits an offence and is liable on summary conviction to a fine of up to $300,000.


Case: Bernard Whimp and associated limited partnerships - Order