Collapsed firm to face charges

The New Zealand Exchange (NZX) is expected to lay stock exchange disciplinary charges over the collapse of discount broking firm Access Brokerage.

Sources have told the Business Herald the actions against Access and director Peter Marshall will be laid within a month.

If Marshall or the now-defunct broking firm is found in breach of NZX rules, they could face penalties of up to $500,000. Restitution to third parties caught up in the collapse can be imposed, alongside any private or public censure.

Marshall, who for months was unable to meet investigators because of ill-health, declined to comment. His lawyer, Wellington-based Peter McMenamin, who frequently took questions on behalf of Marshall, was also silent.

NZX declined to comment on the exchange's case except to say the investigation was going on and that "good progress" was being made.

Access, owned by former Olympic Games boss Bill Garlick, went into liquidation on September 6 - after a $5 million deficit in client funds was uncovered.

Thousands of Access clients avoided loss as the Bank of New Zealand underwrote the shortfall on the firm's trust account.

Speaking to the Business Herald yesterday, Garlick said he was unaware of any charges pending against any parties.

"Access is pretty much behind me," he said, so he wouldn't expect to be kept in the loop by investigators.

"It was a good firm once," he added.

Asked for his theories about what happened in the firm, Garlick the liquidators were the only ones allowed to comment on behalf of Access.

"I don't talk about my affairs publicly. And I can't make a judgment," he said. The Access liquidators, Michael Stiassny and Brendan Gibson from Ferrier Hodgson, will release their second report in the next week or so.

Gibson confirmed the report was due by early April but declined to comment on its contents or a likely release date.

The liquidators' initial report, released in September, showed the firm had been using client funds to run the company for some time, leading to the shortfall in its client trust account. Gibson then estimated that loss to all of the company's creditors and claimants of about $3.7 million before liquidation costs. It is still unclear whether this will be fully recovered.

Interests associated with Garlick earlier emerged as the company's biggest debtor - owing $638,000.

Meanwhile, a separate investigation by the Serious Fraud Office is understood to be nearing completion. However, it still needs to be vetted by the office's lawyers.

The Securities Commission also launched an inquiry after the Access collapse, broadening the investigation in a possible first step towards changing the law governing the NZX.

Commission chairwoman Jane Diplock said in September her organisation would look into Access' banking arrangements, NZX's audit of the firm and any wider issues.

She said the commission would try to determine if any of these issues needed addressing.

Market practice for clearing, settling and delivering trades would also be examined.

NZX has already proposed changes to this system, aimed at reducing the amount and time clients' money spends in brokers' accounts.

Law changes would have to go through Commerce Minister Pete Hodgson. His office would not comment yesterday.