A New Zealand-based director of Morgan DeVere Corporate Finance Limited has been sentenced to 75 hours of community service for breaching the Financial Service Providers (Registration and Dispute Resolution) Act 2008. (FSP Act). The FMA alleges that the company stated it was registered on the Financial Services Providers Register (FSPR) after it had deregistered.
Director Rene Moorby was charged with one count of breaching sections 12 and 40 of the FSP Act. Mr Moorby, who has worked as a Real Estate agent in Wellington, pleaded guilty at a hearing at Wellington District Court on the 11th April 2019.
Section 12 of the FSP Act provides that no person, including a corporation, can hold out that it is in the business of providing a financial service unless it is registered on the FSPR and a member of an approved dispute resolution scheme. Section 40 of the FSP Act covers a director’s liability if he/she knowingly authorises or fails to prevent a corporation from committing an offence under the Act.
Morgan DeVere Corporate Finance Limited, as a company, has pleaded not guilty to two counts of breaching section 12 of the FSP Act. That case is set for the 23rd April at Wellington District Court.
The FMA alleges the company continued to state it was registered on the FSPR on its website after it had been deregistered and despite subsequent warnings from the Registrar of Financial Services Providers (Registrar) and the FMA.
Karen Chang, Head of Enforcement at the FMA said, “The FSPR has been abused by businesses and individuals who use New Zealand’s reputation as a well-regulated country to target overseas investors. Rene Moorby has been held to account for his role in this.
All companies listed on the FSPR must have a New Zealand or Australian director. Becoming a director brings with it rights and responsibilities. This case shows the FMA will take action to ensure directors understand there are consequences for not meeting these responsibilities.”
This case is one of two, related to abuse of the FSPR, currently before the courts. The case involving Pegasus Markets Limited and director Michael Reps remains before the North Shore District Court.
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About the FSPR:
The Financial Services Providers Register is managed by the Registrar of the FSPR, part of Companies Office. It is a compulsory public register of financial services providers. All businesses on the FSPR must have a New Zealand or Australia-based director.
Being registered on the FSPR demonstrates a business or individual has met basic requirements including passing criminal history checks on its director(s) and that the nature of the financial services they provide is publicly available on the FSPR.
Being registered on the FSPR does not mean a business or individual is licensed, monitored or supervised by regulators in New Zealand or another jurisdiction. The FMA was granted power by the government to direct the Registrar to deregister companies or prevent companies from registering on the FSPR in 2014.