Te Mana Tātai Hokohoko the Financial Markets Authority asked property developers with wholesale deposit-taking funding arms to supply it with the names of everyone who invested money - and those who didn't.
The FMA's industry probe, announced late last year, is into the relatively new sector which takes money from qualified or wholesale investors, estimated to have around $300 million of people's funds.
Helena Lewis, the authority's head of disclosure and market conduct, wrote to businesses in the sector in November seeking client names.
She asked for everyone who had put money into the schemes but also those who "responded to any of the offers but did not purchase any financial products".
The reasons why they didn't invest were also sought.
Lewis required "details of all wholesale investors who have purchased financial products under the offers, including full name, contact details, date and amount of investment, the reason why they qualify as a wholesale investor and copies of all information supporting the reason why they qualify as a wholesale investor".
Some in the sector told the Herald they found this "invasive" and worried about handing over client lists. But they said they had no choice and had complied, even though it made them uncomfortable.
The new John and Max Key/John and Michael Chow Stonewood Key Capital launched this month, Du Val Corporation, Williams Corporation and Wolfbrook Capital are seeking wholesale or qualified investor funds to build new homes.
The authority's request was headed "notice to require supply of information and production of documents".
Paul Gregory, authority investment management director, expressed concern about the rise of the new financial sector last year.
"We have become increasingly concerned about wholesale offers spreading into mainstream advertising, especially through social media, where the notion highly experienced investors are the target market becomes questionable. We expect entities relying on the wholesale exclusion to learn from this case and reflect on their own marketing practices," he said last October.
In addition to advertising, the authority was going wider.
"It has confirmed previous public signals that it will also be looking at industry-wide use of the wholesale exclusion and, in particular, if the self-certification exclusion is being used appropriately," Gregory said then.
That was revealed when the authority required Du Val to remove misleading advertising which contravened the fair dealing provision.
Lewis wrote to businesses in the sector on November 12 and all information had to be delivered by December 10.
The new relatively unregulated schemes are sometimes referred to as mortgage funds or partnerships or wholesale investment schemes. But they are basically private banks so developers aren't hamstrung by trading bank borrowing issues, allowing them to get access to funds they would find much harder to source - or far more expensive via mezzanine financing.
Many such schemes offer high interest rates of 8.5 per cent to 10 per cent, paid monthly or quarterly.
The authority also asked for "copies of all promotional material relating to the offers, including brochures, advertisements, scripts, phone recordings, prompts or other material used for promoting the offers in writing or verbally together with details of where, how and when the material was published or made available".
Application forms, disclosure material, dates of all offers and the dollar amounts received and number of financial products was sought.
Williams Corporation managing director Matthew Horncastle said: "They just asked for everything. I've got a theory on it. The FMA is doing an information-gathering exercise on the entire industry. I truly believe Williams was the first company to create this industry of developers raising their own capital via social media.
"Everyone got this request. I think the FMA just wants a deeper understanding of what people are doing and then ascertain if the regulations and law is sufficient or needs to be updated."
"The biggest area we will see changes will be around advertising," he predicted.
Authority action last October against Charlotte and Kenyon Clarke's Du Val was precisely over advertising.
Du Val's statements about its mortgage fund breached fair dealing provisions because they gave the impression that the investment was low risk, it said.
"In fact, property development including associated finance is inherently risky," the FMA said. Du Val's statements said the fund had "the best of both worlds", with high security and high return and comparing it favourably to bank term deposits but without a balanced view of the risks.
Kenyon Clarke told the Herald the action was over the mortgage fund which had raised around $20m from wholesale investors: "We have not had a single concern," he said of people in that fund.
On social media this month he announced the high cost of doing business in New Zealand was partly the reason he and his family would leave here for Fiji in July.
"We aren't able to attract the institutional capital we need to grow @duvalgroup into a $3B property, tech and lifestyle group it needs to be. NZ finance and middleman costs represent many tens of thousands if not hundreds of thousands of dollars of margin on margin which makes NZ one of the most expensive places to build in the world.
"Having a permanent home in Fiji before we travel the world is a gift to my wife and children. It's stability and a place to breath [sic] and come home to. Fiji is the country where I asked my wife to marry me, it's the place where we've laughed and played with our children and when I think about happiness and how short life is, I know it's the right place to call," he wrote on February 13.
Du Val also vowed last year to fight the FMA over its action. Moves over that are yet to emerge into the public arena.
New Zealander with colourful history finds himself in third continent's courts.