NZ industry grandfathers face criminal charges
Two of the grandfathers of the New Zealand financial planning industry are facing criminal charges over problems associated with Reeves Moses contributory mortgage scheme.
Reeves Moses founders Roger Moses and Gary Stevens, along with the company's former mortgage manager Peter Nieuwkoop have been charged with more than 100 offences under the Securities Act and the Securities Act (Contributory Mortgage) Regulations.
The charges have been brought by the Crown Solicitor following a Companies Office National Enforcement Unit investigation. They relate to $23.8 million worth of contributory mortgages Reeves Moses put its clients into in 1998.
Brisbane-based Harts Group, which bought Reeves Moses from ASB Bank subsidiary Sovereign more than a year ago, said previously that a pre-listing internal audit revealed that "a number (of the mortgages) contained breached of the Contributory Mortgage regulations, some of which could have resulted in a loss to contributors".
Harts and Sovereign spent $23.8 million last year buying investors out of the mortgages. None of the investors lost money in the deal.
The trio currently face charges in the Auckland District Court relating to the way the mortgages were written and whether they complied with the laws relating to contributory mortgages.
The maximum penalty for the most serious charge is 3 months in jail. The next most serious charge carries a maximum penalty of $15,000. It is understood charges relating to things such as losses are likely to be laid against various people by other parties later. However, no charges have been laid in this area and no names have been mentioned.
Reeves Moses officially changed its name to Harts Group at the start of the month. Reeves Moses InvestorCare is now Harts Portfolio Management and Reeves Moses MortgageCare is now Harts Contributory Mortgages.
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