Unregistered insurance adviser avoids prison

A South Island man who offered insurance advice, without being a registered financial adviser, has been sentenced to community work and community detention.

Thursday, July 5th 2018, 11:21AM

Garry James Patterson pleaded guilty to two charges brought by the Financial Markets Authority (FMA).

Patterson, 63, who is originally from Queenstown but has also been based in Christchurch, held out he was in the business of providing financial services without being registered to do so or a member of an approved dispute resolution scheme.

He had previously served a prison term for signing up clients who did not exist for insurance policies.

Patterson also obstructed the FMA investigation into his conduct by refusing or failing to attend an interview without a reasonable excuse, as is required by statutory notice issued under section 25 of the FMA Act 2011. On this charge, Patterson was convicted and discharged, due to his limited financial means.

Between July 1, 2013 and May 28, 2015, Patterson held out to customers that he was entitled, qualified, able or willing to provide financial services in relation to various insurance policies.

Customers who engaged with him about insurance policies during this time believed they were dealing with a registered financial adviser. The FMA investigated Patterson’s conduct after receiving a complaint.

Her Honour Judge Farish noted that Patterson had a degree of knowledge in relation to his offending and that by holding out he was a registered financial adviser he was offending against both individuals and the financial markets as a whole, and undermining investor confidence in the financial markets.

Karen Chang, FMA head of enforcement, said, “Mr Patterson was not registered, which meant customers did not have the protections they should have had, such as access to an independent dispute resolution scheme. These protections are important as insurance products can be complex and people go to financial advisers to help them to get the appropriate product.

£Mr Patterson also failed to comply with a statutory notice to attend an interview. Compliance with these notices is a legal requirement. It is not optional. The FMA’s information gathering powers, including conducting interviews, are vitally important for the performance of the FMA’s functions and in particular, the investigation of potential breaches of the law. In the appropriate circumstances, such as in this case, we will bring criminal charges for non-compliance.”

The FMA has also issued a public warning to Jonathan Simon Antony Branton-Casey, in relation to his involvement in Patterson’s offending. Branton-Casey facilitated Patterson’s offending, and in doing so failed to exercise the care, diligence and skill expected of a reasonable financial adviser.

Branton-Casey has voluntarily de-registered as a registered financial adviser, and co-operated with the FMA in its investigation of these matters and the prosecution of Patterson. In these circumstances the FMA is satisfied that the public interest supports a public warning rather than court action.

Tags: court