Ross Asset Management investors reach $4.5 million settlements so far

Monday 18th July 2016

The liquidator of Ross Asset Management has cut deals totalling $4.5 million with 16 investors and is in talks with a number of others about reaching settlements.

PwC's John Fisk is seeking to recover as much as possible of the $100 million-to-$115 million of investor money frittered away in the country's biggest Ponzi scheme. In his latest update, Fisk said claims against 65 investors are subject to standstill agreements, where the liquidator has agreed not to issue proceedings until an upcoming Supreme Court hearing is ruled on, in exchange for the investor not challenging them as being time-barred.

So far, two investors have refused to enter into the agreements, which led to legal proceedings being issued against them, although one of those has since settled, Fisk said in his report. Another 16 settled with the liquidator to avoid the threat of future litigation for a combined value of $4.5 million, of which $1.5 million was received at the time of the report on July 15.

"The liquidators are in discussions with other investors regarding further settlements or the entering into of standstill agreements," Fisk said.

Wellington-based David Ross built up a private investment service by word of mouth, producing regular reports for shareholders indicating healthy but fictitious returns. Between June 2000 and September 2012, Ross reported false profits of $351 million from fictitious securities trading as part of a fraud that was the largest single such crime committed by an individual in New Zealand.

The liquidator is pursuing Wellington lawyer Hamish McIntosh for $954,000 he pulled out of Ross Asset Management prior to its collapse as a test case for other potential investors. The Court of Appeal dismissed McIntosh's bid to keep the $454,000 of fictitious profits he extracted before the investment firm's collapse but upheld the High Court ruling allowing him to keep his $500,000 principal, a finding which pleased neither side.

The Supreme Court hearing to rule on appeals from both sides is set down for July 27.

David Ross is serving 10 years and 10 months in jail for the fraud.

BusinessDesk.co.nz

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