Bid for info on bank fraud lawsuit rejected

The ASB has filed a lawsuit against former employee Stephen Versalko. Photos / Glenn Jeffrey, supplied

ASB Bank and the employee it fired for alleged fraud tried to keep under wraps details of the High Court case that has been taken to recover the money.

Justice Simon France said while possible fraud on a large retail bank is "a matter of public interest", he rejected a request by the Herald on Sunday to view details of a lawsuit ASB Bank has taken against its former employee.

The Herald on Sunday last week identified Remuera banker Stephen Versalko as the investment adviser that the ASB Bank fired for alleged fraud involving 22 customers.

The bank alleges the staff member - whom it did not name - had made fake investments on behalf of 22 wealthy customers. The bank said customers who had lost money had been repaid.

The Serious Fraud Office is investigating the case.

Legal documents obtained by the newspaper showed that the bank had taken out caveats on two properties that Versalko was involved in purchasing in the three months before he was fired.

The properties - in Remuera and on Coromandel Peninsula - were worth $3.5 million. The documents stated that the bank believed the properties were purchased with "funds beneficially belonging to ... ASB Bank Ltd".

It was also reported that the ASB Bank had filed a lawsuit against Versalko in the High Court at Auckland. Justice France said an application to see details of the case had to be rejected because the information could affect the SFO investigation, and "efforts are being made to trace various money".