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Ross in hospital as managers appointed

Investment adviser David Ross has been cooped up in hospital while the Financial Markets Authority investigates his business, which is now in the hands of two PwC insolvency specialists.

Tuesday, November 6th 2012, 1:49PM 4 Comments

by Niko Kloeten

The High Court has granted an application by the Financial Markets Authority to appoint John Fisk and David Bridgman of PwC as receivers and managers of Ross’s investment firm Ross Asset Management, which has had its assets frozen.

While PwC manages the company, unnamed brokers from First NZ Capital will look at the state of its investments.

The order, made today in the High Court at Wellington by Justice Jill Mallon, gives Fisk five days to make a preliminary report on the businesses that have been frozen.

The FMA was awarded a freezing order last Friday after a five-day investigation into the company and its associated entities, which are directed by Ross, a Wellington-based Authorised Financial Adviser.

It started the investigation after being contacted by concerned investors, a number of whom had been unable to withdraw their money.

Hugh Rennie, QC, the lawyer representing the FMA, told the court today that Ross Asset Management was believed to have more than 900 clients, with accounts totalling more than $430 million. 

He said there could be a shortfall on clients’ accounts and said the company seemed to be two years behind on its tax returns.

Ross’s lawyer Pip England of Chapman Tripp said his client is currently in hospital; although he couldn’t divulge the nature of his health issues he said he had been in hospital “for a number of days”.

England said he would be issuing a statement on the matter in the next few days.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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Comments from our readers

On 6 November 2012 at 10:57 pm Old Timer said:
ping PONG ponzeee!!! and you don't think it'll reflect on you? Sorry,it will reflect on you....and me. Thank goodness my clients think I'm a good bloke {blokess} and I use a water tight wrap account {tuis]. God, I remember the '87 days when brokers [share] ripped off the poor clients in their 'interesting' ways. And you young fullas and fulleses think this is a new phenomenon.
Enough of the hyperbole.
This situstion, Ladies and Gents, is yet another Media slap for our industry [note, not profession].
I have and do love helping my clients and have done so for the last 26 years. What I do get peeved of with the having to explain to clients, on occassions, about the "S#%#s" that exist in our industry and how I'm not one of them. This will BITE us people. The more media exposure this gets, the more explaining you'll have to do as to how safe you clients money is. Very Sad.
On 7 November 2012 at 3:47 pm Independent Observer said:
Agree with 'Old Timer'

The industry needs to be more proactive in 'controlling' the industry, before consumers restore their confidence in us
On 8 November 2012 at 10:06 pm Perspective said:
Agree with Old Timer, I was still in short pants in '87 but an adviser for the last 13 years under a wrap service also.

Should I be surprised that somebody allededly operating a ponzi scheme could actually qualify as an AFA like I had to (you know, prove your systems & processes etc etc)??

Or, did this chap get grandfathered in by some cosy arrangement simply because he'd been in the industry a while?

Just shows that no amount of legislation will catch a clever crook (the FMA didn't catch him afterall, it was the clients who complained), it will only create hurdles for the majority who are honest, caring professionals.

Suck it up I guess.
On 9 November 2012 at 5:18 pm brent sheather said:
Good point from perspective above.If he was an AFA then how did this disaster happen. By the way I have been in the industry since 84,commerce degree,passed exams and a year of study to get into the NZ society of investment analysts in 86 and still had to do virtually all the (mostly stupid) courses to become an AFA.no grandfathering for this mug.
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