The High Court has penalised a former insurance group head $1.4 million. Photo: RNZ / Angus Dreaver
- Head of failed CBL insurance group ordered to pay $1.4m
- Admitted accusations of not disclosing key information to investors
- Judge says rule breaches serious and undermine integrity of markets.
The head of the failed CBL Insurance group has been ordered to pay $1.4 million for breaching financial market rules.
The High Court penalty followed a settlement between the Financial Markets Authority and Peter Harris over not disclosing key information about the state of the group's finances.
The FMA had alleged that Harris did not disclose that CBL needed to strengthen its reserves; that the group had a large amount of insurance premiums owed which had not been paid; and that regulators in Ireland had made orders about a CBL subsidiary.
He was also accused of misleading and deceptive conduct relating to statements made to the stock exchange.
High Court Justice Gault approved the settlement and set the penalty, which he said reflected the "harmful effects" of Harris's actions.
"Such breaches undermine market integrity and transparency. They are unfair to investors, and jeopardise confidence in the integrity and transparency of New Zealand's financial markets."
"The contraventions denied investors access to accurate and timely information ... Investors were provided with misleading information in August 2017 and no further information was made available to them about the multiple material issues impacting CBLC's business until 5 February 2018."
The CBL group was worth almost $750m when it collapsed in 2018 as regulators in New Zealand and Europe investigated its dealings and moved to put the group into liquidation.
FMA head of enforcement Margot Gatland FMA Head of Enforcement, Margot Gatland, said the breaches were serious.
"Disclosure is a fundamental obligation which ensures New Zealand's listed capital markets are efficient, transparent and fair, and that there is equality of information in the market. Mr Harris's actions fell well below the requirements."
Four other directors of CBL settled with the FMA last December on similar charges and were penalised $4.1m.
