Abuse of FSPR results in fine for Morgan DeVere in New Zealand
This is the first time the Financial Markets Authority has prosecuted this type of abuse of the Financial Services Providers Register.
Morgan DeVere Corporate Finance Limited (Morgan DeVere) has been fined $40,000 over abuse of the Financial Services Providers Register (FSPR), the New Zealand Financial Markets Authority (FMA) has announced.
The fine follows Morgan DeVere’s conviction at the Wellington District Court on two charges of breaching the Financial Services Providers (Registration and Dispute Resolution) Act 2008 (FSP Act) in May this year.
Morgan DeVere continued to claim it was registered on the FSPR although it had been deregistered and despite subsequent warnings from the FMA and the Registrar of the FSPR. Section 12 of the FSP Act says that no person, including a corporation, can claim that it is registered under the FSP Act unless it is registered on the FSPR and a member of an approved dispute resolution scheme.
The New Zealand-based director of the company, former Wellington real estate agent Rene Moorby pleaded guilty and was sentenced to 75 hours of community service in April 2019 for his part in the offending.
Karen Chang, Head of Enforcement at the FMA said: “This is the first time the FMA has prosecuted this type of abuse of the FSPR.”
“Our concern is that businesses and individuals have been using New Zealand’s reputation as a well-regulated country to target overseas investors – claiming they’re registered on our FSPR when they’re not, misleads consumers and implies a cloak of respectability they’re not entitled to.”
A second case related to abuse of the FSPR, involving Pegasus Markets Limited and director Michael Reps, is pending before the North Shore District Court.
The Financial Services Providers Register is managed by the Registrar of the FSPR, part of Companies Office. It is a compulsory public register of financial services providers. All businesses on the FSPR must have a New Zealand or Australia-based director.
