Warning Securities Commission bans Locke Guaranty Trust (NZ) Ltd advertisements


	Advanced Search

Print this page.

20 June 2007

News release

Warning Securities Commission bans Locke Guaranty Trust (NZ) Ltd advertisements

The Securities Commission has banned advertisements for the Locke Secured Capital Plan. The investment is offered by Locke Guaranty Trust (NZ) Limited (LGT).

LGT is incorporated in New Zealand and has an Auckland address. LGT states that New Zealanders are not eligible to invest in the Plan, but appears to be using New Zealand as a base to offer securities in other countries.

"The Commission can and will intervene in deceptive or misleading offers being made by people based in New Zealand even if the offer is not open to New Zealanders. Investors should be warned about the scheme because the Commission believes claims made about it are likely to deceive, mislead or confuse investors," the Commission's Director of Primary Markets, Kathryn Rogers said.

LGT advertised the plan on its website. It stated that the investment is safe and risk free. All investments have a degree of risk and the Commission believes these statements are deceptive and misleading.

The website also stated:

that LGT offers internet banking and is regulated under the Reserve Bank of New Zealand Act 1989; and
that LGT is regulated by the Securities Act 1978.

"The website may have given the false and misleading impression that LGT has been licensed and/or approved by the Securities Commission or the Reserve Bank," Kathryn Rogers said. "LGT is not a registered bank in New Zealand and is not subject to banking regulations."

If its claim that New Zealanders are not eligible to invest is true, then the offer is not subject to the Securities Act. It does not comply with the Act.

The description of the scheme is confusing because it is unclear how LGT intends to use investor's money and information about this appears inconsistent.

LGT has made efforts to remove advertisements for the plan from its website. It has stated that any failure to comply with the law was inadvertent. This however does not alter the position that people may have been deceived or misled by the advertising.

*****

Contacts: Poly Banerjee ph 04 471 7666

Return to index