Getting the "mastermind" behind an A$30 million "Ponzi" scheme to agree never to serve as a director here is an "imaginative use" of Financial Markets Authority's power, says law firm Chapman Tripp.
Nelson's David John Hobbs has agreed to never again direct a New Zealand company and also agreed to not provide financial advice or brokering services in this country.
Hobbs was found in 2012 by the New South Wales Supreme Court to have breached Australian laws over the operation of 14 schemes that received over A$50 million of investment.
He was penalised a record A$500,000 across the Tasman and is permanently banned from managing companies or providing financial services in Australia.
Hobbs has now agreed to a series of undertakings on this side of the ditch that he will not act as a director or promoter of a company here permanently and will not provide financial adviser or brokering services.
If he breaches these undertakings, the Financial Markets Authority can take him to court.
His wife, Jacqueline Hobbs, has agreed to not act a director in this country for four years and also to not provide financial adviser or brokering services in New Zealand.
Law firm Chapman Tripp said this morning that the FMA accepting enforceable undertakings from the pair to achieve an effective banning order for breaches which occurred in Australia was an "imaginative use of its power".
"What it does show is that developments on the other side of the Tasman will often have implications here, and that the FMA is prepared to be proactive in order to provide efficient protection to New Zealand investors," Chapman Tripp partner Victoria Heine said.
If not for the undertakings the FMA could have attempted to get a banning order against the couple under the Financial Markets Conduct Act, which Heine said was an "astonishingly detailed piece of legislation".
"There's a lot of things in there [the FMA] can do...they will look more imaginatively and more creatively at what they can achieve and how in a manner that's fast and efficient," she said.
