KEY POINTS:
Collapsed Access Brokerage, whose former boss Peter Marshall is in jail, faces a penalty of $750,000 for breaching NZX participant rules.
In a ruling made public today, NZX Discipline said the penalty was only to be paid if Access's creditors were met in full.
NZX had agreed to the settlement in recognition of the financial position of Access, and the likelihood Access would not have sufficient funds on completion of its liquidation to pay any penalty after paying its creditors.
NZX Discipline, which is independent from NZX and its subsidiaries, has the job of hearing matters about the conduct of parties regulated by NZX participation and listing rules.
Its decision released today followed NZX and Access Brokerage reaching a settlement, as approved by NZX Discipline in March 2007.
Information on the outcome of the settlement should be released now that charges against Marshall had been determined, NZX Discipline said.
Last week Marshall was jailed for three years when he appeared in the Wellington District Court.
He became Access Brokerage chief executive in 1995 and was responsible for it when it collapsed, owing $3.9 million in client accounts, in September 2004.
Marshall denied 14 Serious Fraud Office charges of false accounting with the intent to defraud, and making false statements with the intent to defraud between August 2001 and July 2004.
In April, a jury of 11 found him guilty on all 14 counts.
NZX Discipline said in its decision that Access Brokerage had accepted it acted in breach of NZX participant and business rules and their predecessors, in the period before September 3, 2004.
The breaches included failing to: hold all client funds on trust and separately identify them as required; maintain its liquid capital at the prescribed level and to inform NZX of the deficit in capital; and observe and maintain proper ethical standards.
NZX Discipline said these were serious breaches of NZX rules which were fundamental to market integrity, and publicly censured Access accordingly.
Along with the financial penalty and public censure, Access' designation as an NZX market participant was revoked. It had ceased to carry on business as an NZX participant on September 3, 2004.
While, accepting the pecuniary penalty should be paid only if Access's creditors were met in full, NZX Discipline said it emphasised the breaches were of the most serious nature.
The financial penalty for such breaches would normally be set at a higher level.
"NZX Discipline stresses, therefore, that for similar breaches that might arise in the future, a considerably higher level of financial penalty is likely to be levied.
"NZX also believes it is in the best interests of the New Zealand capital markets that this disciplinary action is settled and completed rather than being determined over a lengthy period of time at significant cost."
- NZPA
