The Securities Commission appears to have been warned about suspected Ponzi scheme operator David Ross three years ago, but took no action. [David Ross was sole director of failed Ross Asset Management Ltd]
An email obtained through the Official Information Act shows Securities Commissioner Annabel Cotton was told of concerns about Ross in September 2009.
At the time, Ms Cotton had a special role as commissioner for financial advisers, responsible for developing a code of conduct for the financial advisory industry.
The email reads:
“Has anyone every [sic] looked into the activities of David Ross funds management? He doesn’t ad [sic] up to me and I could explain why verbally if you wished.”
The name of the sender was redacted from the OIA document, although it is understood the sender was a professional investor.
Ms Cotton said she had forwarded the email from her personal address to her Securities Commission address so that she could discuss it with commission staff when she was next in the office, “and to the best of my knowledge that’s what I would have done”.
“What happened from there I don’t know. I would have left it with a senior staff to work things from there and decide what to do.”
The Dominion Post has learnt of another individual who claimed he contacted Ms Cotton verbally about Ross, before September 2009.
The person, who asked not to be named, said he was told the commission was too busy to look into his concerns.
“I remember Annabel’s words exactly,” he said. “[She said] ‘I hope you’re not right’.”
Ms Cotton, who owns investor relations consultancy Merlin, said she had no recollection of the conversation.
The Financial Markets Authority, successor to the Securities Commission, licensed Ross as an authorised financial adviser in July last year.
Ross’s Wellington offices were raided by the FMA on October 31 after it received client complaints on October 25.
Receivers appointed to Ross companies by the High Court have found assets totalling $11.5 million, a significant shortfall on client accounts purporting to be worth $449.6m.
The Serious Fraud Office is investigating.
The Dominion Post, Thursday, December 13, 2012, p. A3
Ross Asset Investors may face ‘gruesome legal fight’
The National Business Review, Tuesday 4 December, 2012