The case against advice Robinson have to Neville Mace and his family trust was heard in the Auckland High Court.
It was brought under the Fair Trading Act.
Justice John Fogarty described the six investments made on Robinson’s advice as “disastrous”.
The six investments made by the Mace family trust were in NZX-listed electricity retailer Pulse Utilities, start-up investments Digi-Clik International, Zeroshift, bio-tech start-up Enviro Energy, and a loan to Pulse director James Martin on the advice of Robinson between 2008 and 2012.
Two key themes in the case where that Robinson didn't explained the risks around investing in start up companies, and he told the client he was investing in the companies too.
However, he failed to disclose that his investments were by being issued scrip as a form of commission.
Robinson was a former AMP adviser and during that time Mace was invested in conservative funds.
However when Robinson left AMP and established his own business, Strategic Planning Group (SPG) he moved the client to more aggressive investments.
However in evidence Mace says when he moved he did not intend to change his investment profile.
“I made it very clear to Mr Robinson that while we obviously wanted as high a return as possible, we were only interested in investments which he regarded as being very safe. I told him we were approaching retirement and could not replace any money that was lost. ”
In the judgment Fogarty said Robinson was negligent in the advice he gave.
He said Robinson’s conduct “falls well short of the quality of advice required in the circumstances by an investment advisor. ”
It wasn’t just negligent, he said. “It was deliberately misleading.”
The full judgment can be found here
Mark Turnock does not face charges under the crimes act from the SFO as we previously reported.
The following is from the FMA.
Andrew Robinson and Mark Turnock
The criminal proceeding brought by FMA relates to allegations of breaches of the Financial Reporting Act, Financial Advisers Act and Financial Service Providers (Registration and Dispute Resolution) Act. The Serious Fraud Office has also laid separate charges under the Crimes Act against Mr Robinson.
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