Former CBL boss cuts deal with Financial Markets Authority to settle case

Navigation for News Categories

The Financial Markets Authority’s headquarters in Auckland.
Photo: Google Street View

The Financial Markets Authority (FMA) and former head of the failed CBL insurance group have cut a deal to settle a civil case about market disclosures.

The FMA said CBL managing director Peter Harris will admit breaches of rules for not disclosing to investors its insurance business needed to strengthen its reserves, unpaid premiums from its French business and official directions made to its Irish subsidiary.

It said he has also accepted that a CBL statement to the stock exchange in mid-2017 was misleading and deceptive.

The FMA has also accepted an offer from Harris not to hold any management or directorship positions with any listed or insurance company.

FMA head of enforcement Margot Gatland said the action against Harris and other directors was in the public interest to pursue “significant misconduct”.

“We are satisfied this agreement to move to a penalty hearing, with in-court admissions of contraventions and the management restrictions to which Harris is now subject, meets our objectives at this time.”

The settlement will be put to the High Court for approval and a ruling on penalties.

Four directors of CBL reached agreement last year with the FMA on similar claims, and were ordered to pay $4.1 million in penalties.

The FMA is still pursuing a disclosure breaches action against the former chief financial officer, Carden Mulholland, and a separate action against him, Harris and the estate of deceased former director Alistair Hutchison about CBL’s share market float in 2015.