KEY POINTS:
Following a 13-day trial, which was postponed several times due to the defendant's ill health, a Wellington District Court jury yesterday found former Access managing director Peter Marshall, 62, guilty on 14 fraud charges related to a $4.8 million shortfall in client funds discovered in September 2004 after he went on sick leave.
Marshall was granted bail until sentencing on May 29. His lawyer Brooke Gibson said his client was yet to indicate whether he would appeal.
During the trial, former Access employee Linda Hassell told the court there were a number of instances of shortfalls of funds in the company's expense account for a number of years before the company's collapse and at one point the shortfall was up to $1 million.
Another employee, Valerie Wenk, told of a number of times when transfers were made from the trust account where clients' funds were held to the firm's expense account to cover expenses.
Wenk said she spent a lot of time trying to fix discrepancies and had problems reconciling reports that had to be filed with NZX.
At one point she was aware of a shortfall of $3.5 million.
SFO forensic accountant David Osborn told the court false entries in Access' financial journals were used to show the company as solvent, then also used to report to the NZX that the firm could meet its obligations to clients.
Osborn said he expected an accountant could recognise that things were put into the wrong columns on the NZX reports, and the journals and the entries they were based on would have been available if the NZX inspectors or company founder Bill Garlick had wanted to see them.
A 2005 Securities Commission report found that NZX's broker compliance regime suffered from inexperience, inadequate training and poor understanding of relevant rules during the period leading up to Access' collapse.
The Bank of New Zealand, which jointly underwrote the shortfall in funds with NZX, is seeking to recover its $4.8 million losses from the market operator and regulator and from auditors Deloittes.
The BNZ and liquidator Korda Mentha, which is also taking action to recover $400,000 in costs from the market operator and auditor Deloittes, say the two firms' inspections of Access' books should have raised concerns long before the online sharetrader went belly up.
In February the Court of Appeal overturned a 2006 High Court decision which prevented BNZ from taking action, but NZX is seeking leave to take the matter to the Supreme Court, BNZ general counsel Mark Dowland said yesterday.
Dowland said yesterday's verdict in the Marshall trial had little bearing on BNZ's action: "We were reasonably confident about that position in any event."
NZX head of market supervision Elaine Campbell said NZX's regulatory division was "pleased" with yesterday's verdict, "and are happy that the core responsibility for the collapse of Access Brokerage has been properly identified".
"NZX Regulation now looks forward to completing the disciplinary and civil proceedings outstanding."
THE ACTION
September 3, 2004: Access Brokerage's majority owner Bill Garlick tells NZX his firm is in trouble.
September 6: Access goes into liquidation after a $4.8 million deficit in client funds is uncovered.
September 13: The Securities Commission launches an inquiry into the collapse.
September 15: Liquidator Ferrier Hodgson's initial report shows the firm ran on client funds for some time, leading to the shortfall in those funds. BNZ offers to cover the shortfall.
April 8, 2005: Second report by Ferrier Hodgson finds Access' problems may date back as far as 1998.
April 14: NZX charges Access Brokerage and former managing director Peter Marshall with breaching rules.
May 10: Serious Fraud Office charges Marshall with 13 counts of false accounting and two of making false statements.
February 27, 2006: At a depositions hearing Marshall pleads not guilty but accepts there is a case to answer.
July 24: Marshall's trial postponed after he suffers a series of strokes.
March 2007: A hearing to determine Marshall's fitness to stand trial is adjourned after he suffers strokes in January and February.
September 18: Marshall's lawyers apply for an adjournment, saying he is too ill to mount a defence. He is given until November 5 to provide evidence to that effect.
November 5: The court is told Marshall's health would suffer further during a three-week trial, and he is unable to remember much of what took place around the time of the alleged offences.
December 4: Marshall ruled fit to stand trial.
April 2, 2008: Trial begins.
Yesterday: Marshall found guilty on 14 fraud charges.
- Additional reporting: NZPA
