CMI has also been banned from offering interests in contributory mortgages to the public for four months. During this time the commission will continue to review CMI’s operations to determine whether any other action should be taken.
The commission considers CMI breached the Contributory Mortgage Regulations in relation to the two mortgages, which were the Otahuna Property Limited first and second mortgages, by:
CMI told the commission about its failure to disclose that the security for the first mortgage was limited to a priority amount and admitted it has a conflict of interest in the continued management of these mortgages. CMI’s failure to disclose to first mortgage investors that their security was limited to a priority amount may give grounds for an action against it by those investors. In these circumstances although CMI proposed steps intended to manage the conflict the commission considers that the only realistic way to manage a conflict of this nature is for an independent party to represent the interests of investors.
CMI has a history of securities law breaches. In 2004 it was convicted for providing misleading information to investors in relation to a contributory mortgage and for paying investors’ money to a borrower when there were insufficient funds to complete the development for which the money was being lent, events occurring in 2000.
Earlier this year the commission accepted an enforceable undertaking from CMI in relation to events occurring in 2004 and 2005.
| « Macquarie signs up to Aegis | Sovereign takes regulation bull by the horns » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved