About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Friday, November 15th, 10:33AM
rss
Latest Headlines

Insolvency changes upset burnt investors

Investors who lose money in Ponzi schemes could find it harder to recover it under changes to insolvency laws announced by Government.

Tuesday, November 5th 2019, 9:22PM

The Government is introducing new rules to provide better consumer protection for people with vouchers for failed companies; to ensure protection for wages owed to employees of failed businesses, including long-service leave and payments in lieu of notice; and to provide better protection for creditors by extending the clawback period from two to four years when a creditor is a related-party of the failed company.

But it is also reducing the period during which unrelated party creditors can be required to pay back amounts received from a business being liquidated, from two years to six months.

In a cabinet paper, Commerce Minister Kris Faafoi said that would reduce the amount that could be clawed back from investors who successfully withdrew money from a Ponzi scheme.

"This will have the effect of reducing the amount available to be shared amongst other investors and, therefore, increase the differences in the losses between different classes of investor."

Ross Asset Management Investors Group spokesman Bruce Tichbon, who represents those who lost money in the ponzi scheme administered by David Ross, said it was a "disaster for small investors".

"Even though small investors in this country have lost billions to investment fraudsters over the past decade the Government seems to be intent on making the situation worse.

"The Minister must explain why he was previously committed to reform of this country's unjust Ponzi recovery law, or the lack of it ...Then without notice the Minister has done a complete back flip.

"The Minister should also explain why he did not consider an insurance scheme to better protect small investors from investment fraud, as has been in place for 50 years in the USA."

Faafoi said MBIE released a discussion document last year on issues with applying the voidable transactions regime to Ponzi schemes.

“It also proposed a bespoke regulatory solution that would have provided for more equitable treatment of different classes of investors.

“I have since put this work on hold, for two reasons. First, I did not want to delay progress on the reforms outlined in this paper, which taken together, will significantly improve insolvency law.

“Second, most submitters did not consider it to be a high priority issue. Although many submitters acknowledged that there are issues with applying the voidable transactions regime to Ponzi schemes, the detriments associated with retaining the status quo are relatively low because: There are very few Ponzi schemes. There have been one or two a year, on average, over the last decade; the costs of a bespoke regime could be out-of-proportion to the size of the problem; and although the proposed regime would be fairer, the law is clear, so liquidators know what they are required to do and investors know where they stand.”

Tags: Kris Faafoi ponzi Ross Asset Management

« FMA fesses up to website breach and apologisesInvestor confidence drops »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • FMA fesses up to website breach and apologises
    “Correct quote from the Act but reporting is not mandatory as the wording used is "may" not must. Shanks comments have beenquoted...”
    2 hours ago by gavin austin adviser business compliance
  • When is a client really a client?
    “Agree Murray. Financial consideration has nothing to do with the new laws. Might I suggest that the government and the...”
    2 hours ago by JPHale
  • When is a client really a client?
    “I think anyone who thinks someone becomes their client only after that person has accepted an advice recommendation from...”
    16 hours ago by Murray Weatherston
  • When is a client really a client?
    “thanks regant, generally agree with you. not your fault that i didn't make myself clear enough. ...”
    18 hours ago by w k
  • Long-serving ACC investment chief calls it a day
    “I'm surprised that no-one has commented yet, but isn't it a little strange that their in-house equities strategy is following...”
    18 hours ago by smitty
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.30 4.20 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.45 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime - - - -
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.35 4.04 4.02 4.39

Last updated: 11 November 2019 4:01pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com