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FMA staffer scam allegations damaging

Heads may roll at the Financial Markets Authority (FMA) after the embarrassing revelation that one of its analysts was charged with forging his academic record and running a Ponzi-style scam, a former senior adviser at the regulator says.

Monday, September 21st 2015, 6:00AM 7 Comments

by Susan Edmunds

It was revealed by the NZ Herald on Saturday that Benjamin Anthony Kiro, who worked at the FMA from September last year until January, is accused of stealing $210,000.

It is alleged he convinced women he met on dating sites, and businesspeople introduced via associates, to invest in companies planning to list on the stock exchange.

Police say the money he was given was never invested. When asked about it, he produced a bank statement which police allege was false.

It is also alleged that he forged his qualifications to get his job  as an FMA analyst. He claimed to have law and commerce degrees as well as an MBA.

One man who gave Kiro $120,000 told media that working at the FMA gave him credibility and he had assumed that the regulator would do due diligence on its staff.

Gavin Austin, now director of ABC Compliance, was a senior adviser of AFA monitoring at the FMA for three years.

He said the revelations could make things tough for the FMA. “It indicates their internal policies and procedures are not as tight as they should be.”

He said, in his experience, FMA recruiters put a lot of store in an applicant’s academic record. “Rather than looking at what skills the person brings to the role.”

He said, when he was involved in adding members to his team, the regulator’s recruiters did not closely follow the State Services Commission’s pre-employment guidelines. “They don’t tend to pay a lot of attention to that. Their recruiting procedures were not as in line with the State Services procedures as they should have been… heads could roll”.

The State Services Commission requires a base level of checks that all state sector employees are expected to meet when they are recruited, including confirmation of identity, nationality, right to work, criminal records, a check with a former employer and referees. It says: “Some agencies will undertake more detailed checks relevant to the nature of work undertaken by their employees, such as occupational specific qualifications and a right to practice.”

Kiro was recommended to the FMA by Frog Recruitment. Its director Jane Kennelly said her firm’s recruitment process included thorough checking and vetting and exceeded the industry standard.

FMA spokesman Andrew Park said the regulator was constrained in what it could say because it could be called as a witness in the case.  He could not comment on Austin’s allegations specifically.

“Like any responsible employer, we take our recruitment procedures seriously and are extremely disappointed and concerned by the alleged offending. We believe our recruitment procedures to be sensible and proportionate for an entity such as the FMA but will nonetheless be reviewing them in light of this situation.”

 

 

 

 





 

 

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Comments from our readers

On 21 September 2015 at 9:10 am Steven Popodopolus said:
Awkward.

And whilst humrous given the ridiculous, onerous and pointless procedural requirements to be an AFA that have obviously fallen short at the FMA, terrible for the industry as a whole.

Smacks of worst fears whereby the FMA is actually terribly under resourced dealing with too big a task.
On 21 September 2015 at 10:18 am AFA said:
The FMA was probably so delighted to receive a job application from this "diversity" candidate that they didn't bother doing any checks. but what happened when he started work at the FMA and they found out he couldn't do the job ? Did they hold onto him regardless just so they could shown they had a diversity employment program ?
On 21 September 2015 at 10:21 am Charity said:
Mr Kiro may have been just the type of employee that FMA was looking for based up the FMA values as listed on its website. BOLD (Enterprising, Intrepid, Daring). Mr Kiro was apparently all of that and more. PROACTIVE (Strategic, Can-Do, Forward Thinking). Mr Kiro definitely ticks those boxes. CONNECTED (Visible, In-the-know, Influential, Agile). Mr Kiro could definitely be described in those terms. AGILE (Nimble, Adaptable, Energetic). Based on the article that describes Mr Kiro to a T. Where he falls short is RESPECTED (Astute, Credible, Fair, Accountable and Transparent). However, so does FMA. For an organisation charged with making the financial markets transparent and claiming itself to be transparent to refuse to comment because it might be called as a witness in a lawsuit is truly reprehensible. Suppose FMA investigated a market participant about conduct that violated regulations and the participant didn't want to give a statement because he might end up being a witness. FMA needs to be investigated about this situation and action needs to be taken against the HR department within FMA.
On 21 September 2015 at 10:37 am Cranny said:
Is it just me but have their been more ponzi type schemes operating since regulation was put in place.

All these FX type operations allowed under regulation which are ponzi schemes and now a FMA employee running one.

They worry about the adviser force when they cannot keep their own employees in check. This is an absolute disgrace when they cannot keep to their own code of conduct. They are the enforcer and if this employee was an advisers employee - the company's directors would be in court.

I would like to hope we see the same with the FMA. If this was the IRD and one of their employees committing tax evasion their would be an external inquiry. The shark nets appear just to catch dolphins at present - so maybe time they start looking internally. They go on about risk profiling our clients and giving us hard time when they can't even do referee and CV checks on their own employees. Heads should roll and an external enquiry set up to investigate this and whether the FMA are doing the job they set out to do.

Not impressed - appears to be several sets of standards in regulation.
On 21 September 2015 at 11:16 am w k said:
it happens - immigration services head (the local lady), nz military (that pommy chap), mtv (that canadian chap), now fma .... then who's next? either too sloppy or lazy.

it seems much harder to hire someone with a genuine cv?
On 22 September 2015 at 11:49 am R1 said:
With FMA experience under his belt I am betting he will turn up sometime at one of the banks as a senior advisor.
On 22 September 2015 at 3:20 pm Brent Sheather said:
Good comment R1! He is a potential Senior Advisor Private Banking and Wealth Management or, possibly, Compliance.

Regards
Brent

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