Staff appointment
 John Mulry has been appointed to the newly created
position of Director, Market Supervision.
John has 30 years' experience as a lawyer and
banker in the United States, including practising
securities, regulatory and corporate law,
developing investment and corporate banking
businesses at Bank of America and Citigroup,
and founding a private advisory services firm for
financial institution clients. He is a graduate of
Fordham Law School in New York. John will be
responsible for market oversight and secondary
market enforcement.
At the same time as appointing John Mulry, the
Commission has taken the opportunity to create
a new head of primary market enforcement. Kathryn Rogers, previously Associate
Counsel, has been appointed Director, Primary Markets. Director of Enforcement,
Norman Miller, will retain an oversight and case management role in respect of
enforcement matters, and will head the Commission's international work.
A chart showing the main areas of responsibility of the Commission's senior staff is
on the website.
Warning - Boiler Rooms
The activities of overseas boiler-rooms who telephone New Zealanders
pushing dodgy shares continue apace. We now have 155 names listed on
our website. Probably a relatively small group of people run these boilerrooms.
They change their names and locations regularly, and they change
their tactics. The people that ring you with a new transaction to buy or
swap the original dud shares you bought are probably the very same people
who sold you the shares in the first place. This is a secondary scam. It
seems to offer a chance to recoup earlier losses but inevitably involves the
payment of more money which will again be money down the drain.
Often these secondary approaches are coupled with referrals to supposed
regulatory bodies to confirm the credentials of the "broker". These
regulatory bodies are bogus and if you do call, it is probably to a person
who is sitting right next to the broker. These people use business centres
for telephone and fax facilities. You might call Hong Kong but your call
will be switched through to another location. You simply will never know
where the person at the other end of the telephone is actually based.
These brokers also use bogus websites. Never rely solely on information
from a website that you are referred to. The simple rule is that you should
never do business with someone you don't know and especially when that
person is based off-shore. If you send money away the chances are that
you will never see it again. It is virtually impossible to recover your money
when it goes out of the country.
We reiterate the very grave risks associated with this type of activity. If you
want to invest overseas, the safest way is to use a New Zealand-based broker
who is accountable under New Zealand law.
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Fund managers - substantial security holdings
Fund managers need to be aware of
disclosure requirements in relation
to substantial security holdings in
public issuers, and must ensure that
they comply with these.
The provisions of the Securities
Markets Act 1988 concerning
disclosure of substantial security
holdings in public issuers apply to
individual funds being managed.
These provisions also apply to the
aggregate relevant interest in a public
issuer held by the fund management
company as a whole.
Fund managers need to have
adequate compliance systems in place
to cover these requirements, and
should obtain specialist legal advice
as needed.
Alerting those at risk
"Hang up on these callers" is the
theme for a campaign aimed at people
at risk from boiler room scams.
In response to many inquiries from
people asking if these callers are
genuine, the Commission will run a
publicity campaign in May and June
2005.
We aim to reach small business
people, farmers, foresters, and
those who provide services to these
industries. These people in all parts
of the country are being targeted by
unsolicited telephone callers pushing
dodgy shares and share swaps.
Newspaper and magazine articles and
advertising will invite people to check
out the information on our website
about scams.
We aim to give them the information
they need to resist the clever sales talk
these callers use to part Kiwis from
their money.
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