Former managing director Peter Harris, who is a target of both actions, said the FMA proceedings "will be vigorously defended," as well as any that might arise from an 18-month Serious Fraud Office investigation.
The first FMA action relates to disclosures during the $125 million initial public offering in September 2015. The FMA alleges a failure to disclose related party transactions and false and/or misleading statements in respect of CBL's solvency ratios and the use of the IPO proceeds.
This action is against Harris, director Alistair Hutchison and former chief financial officer Carden Mulholland.
Mulholland resigned in November 2017, giving six months' notice.
The second action alleges a failure to comply with continuous disclosure obligations on the need to strengthen the main insurance company subsidiary's reserves, the age of premium receivables from French subsidiary Securities and Financial Solutions Europe, and the directions and conditions imposed on CBL's European subsidiary by the Central Bank of Ireland.
The second suit also alleges misleading and deceptive conduct and/or unsubstantiated representations in trade in respect of CBL's market announcement on August 24, 2017.
That announcement was the company's financial results for the six months ended June when it said underlying profit rose 2 per cent to $23.6m with revenue jumping 35 per cent to $206.2m.
However, the company said a one-off $16.5m increase in reserves against future claim forecasts led to a reported net profit of $12.6m, down 32 per cent.
The directors included in the second action are former chair John Wells, Harris, directors Anthony Hannon, Norman Donaldson, Ian Marsh, Alistair Hutchison and the ex-CFO, Mulholland.
The FMA said pursuing these cases will send "an important denunciation and deterrence message," hold to account "those considered most culpable for any identified misconduct," and clarify the law and provide important legal precedents.
"Our key statutory objective is to promote and facilitate the development of fair, efficient and transparent financial markets," said FMA general counsel Nick Kynoch in a statement.
"There will be corporate failures in a well-functioning market. However, the size and circumstances of CBL's collapse threaten our overarching objective. Because of this, we conducted a significant and complex investigation into CBL's failure," Kynoch said.
He also acknowledged the two litigation-funded class actions against CBL "which are primarily aimed at securing compensation for investors. The FMA will engage with investors and the courts to manage the various proceedings now in progress," he said.
"Investors exercising their own legal rights and pursuing privately funded litigation plays an important part in a well-functioning market, which the FMA strongly supports.
"However, private civil litigation may not always address areas of broader public interest that are of concern to the FMA."
The FMA notes that if any declarations of contravention and penalties are granted, they "provide the ability for individual claimants to seek compensation" relying on such court rulings.
The maximum penalty for the FMA's action is likely to be $1m for an individual or $5m in any other case, the regulator said.
FMA's announcement comes as the class action case funded by Australia-based IMF Bentham released paperwork showing the Auckland High Court granted it leave to proceed with its class action last week.
CBL's liquidators, Neale Jackson and Brendon Gibson of KordaMentha, neither consented to nor opposed the IMF-funded suit but will abide by the court's decision, Justice Simon Moore said in a court minute.
Justice Moore noted the other class action, which is backed by New Zealand-based litigation funder LPF Group, and said that "in many respects this representative action seems to define the class in substantially the same way as the present proceedings."
The minute said an application has been filed to have those proceedings transferred to Auckland. LPF said it didn't apply to have the case moved, the defendants did.
A key difference between the two class actions is the IMF one is against only CBL and its insurer whereas the other class action, which is backed by CBL's major institutional investors, is against both CBL and its directors.
"Unresolved at this stage is how those actions should proceed," Justice Moore said.
"It is suggested by the applicant that, if possible, the same judge should be assigned to both matters to consider all preliminary and case management issues," he said.
Harris said the court is "the proper forum for the claims to be litigated – rather than the public jockeying for position by the two litigation funders who are focused on getting their place at the compensation trough ahead of anyone else and trying to settle without going to court."
CBL went into liquidation in May this year. Its shares last traded at $3.17 on NZX before they were suspended in February 2018, valuing the company at $747.4m.
