One of the insurance companies that had an agency agreement with disgraced Masterton firm Morison Guildford has ended the relationship.
Morison Guildford were heavily criticised in a Securities Commission report for the way it sold a so-called investment fund, which in effect was nothing more than a scam.
The Gideon fund, which New Zealanders invested more than $5 million in, claimed returns of up to 51.5% annually. According to the commission it was an illegal offering as it had no investment statement or prospectus.
The commission described
Morison Guildford’s conduct as "incompetent and irresponsible."Sovereign head of marketing Vena Crawley has confirmed that the company "no longer has a business arrangement with Masterton financial advisory firm, Morison Guildford."
Crawley won't say why the arrangement was terminated.
"Unfortunately we are unable to disclose why due to confidentiality arrangements we have with all our advisers."
A number of other firms are understood to have agency agreements with Morison Guildford.
Besides criticising the advisory firm over the way it sold the scam Gideon fund the commission also said questions of liability arose from Morison Guildford’s possible role as an investment broker for the fund.
These matters have been referred to the Registrar of Companies for his further consideration, it said.
The office of the Registrar of Companies says it has a copy of the commission’s report and is currently deciding what, if any, action it should take.
The registrar has the power to prosecute advisers under the Investment Advisors (Disclosure) Act 1996.
Fines of up to $10,000 can be imposed by the courts on individuals, while firms face fines of up to $30,000.
Although the act has been in force for several years, no adviser has ever been convicted of an offence.
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