The trustee for failed finance company, Viaduct Capital, have settled civil proceedings filed by the FMA for $4.5 million.
This is the first time the FMA has used its powers to act for investors.
The basis of the FMA’s case against Prince and Partners Trustee Company is that it failed to carry out its functions with the care, diligence and skill expected of a reasonably competent and prudent trustee.
“By bringing this claim and receiving these admissions, we’ve highlighted the type of misconduct that is unacceptable from a licensed supervisor.” FMA’s Head of Enforcement Karen Chang says.
Viaduct owed secured depositors $7.8 million when it went into receivership in May 2010. $7.3 million was covered by the Crown Guarantee and repaid to investors by Treasury. $515,000 is owed to investors who invested in Viaduct after the Crown Guarantee was withdrawn.
It is unclear what FMA will do with the settlement money.
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