KEY POINTS:
Some financial advisers have reached out of court settlements with clients who lost money in finance company collapses.
Kapiti Coast stockbroker Chris Lee said he knew of eight cases in which financial advisers had paid back money lost by clients following advice from the adviser, a Wellington newspaper reported today.
Most of the settlements had been covered by a confidentiality agreement, but Mr Lee knew about them because he had helped some investors put their cases together.
In the negotiations he had been involved with, advisers had bought debentures previously bought by their clients. The adviser would then receive any money that was paid back by the finance company.
More than 12 New Zealand finance firms have gone under in the past 18 months, affecting nearly $2 billion in investors' money.
Most of the advisers to settle so far had put clients' money into Bridgecorp, which went into receivership in July.
Mr Lee is underwriting money his clients lost after he advised them to invest in Provincial Finance, which failed in 2006.
Provincial Finance investors were expected to get back between 90c and 95c in the dollar and Mr Lee would pay the shortfall, which was expected to cost him "the thick end of a million".
- NZPA
