SFO confirms investigation into Ross Asset Management

19 November 2012

SFO confirms investigation into Ross Asset Management

The Serious Fraud Office (SFO) today confirmed that it has commenced a formal investigation into David Ross, Ross Asset Management Limited (In Receivership) and associated entities.

In response to investor complaints, the Financial Markets Authority (FMA) opened an investigation into Wellington Financial Advisor, David Ross and firm Ross Asset Management on 25 October. A freeze was obtained on Mr Ross' assets and John Fisk and David Bridgman from PricewaterhouseCoopers, were appointed as receivers and managers.

Acting Chief Executive of the SFO, Simon McArley said the Office had been working with the FMA over the last two weeks. An evaluation of the information now available has concluded that there are reasonable grounds to believe that an offence of serious fraud may have been committed and accordingly have commenced a Part II investigation under the SFO Act.

"We will continue to work closely with the FMA to ensure both agencies' resources are applied effectively in a coordinated and timely manner. We are meeting with the FMA and Mr Fisk early this week to progress that", he said.

"The SFO notes with concern the comments made by Mr Fisk that it is likely the historical returns advised to investors may be fictitious and that what has occurred has the characteristics of a Ponzi scheme. Given the scale of the potential loss this is a matter we take extremely seriously".

A dedicated telephone message line +64 (0)4 462 7040 has been established by PwC for any investors or creditors who have an enquiry relating to Ross Asset Management Limited (In Receivership) and related entities. Investors with questions should continue to contact PwC.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Role of the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

The SFO operates three investigative teams:

• Evaluation & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

The SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director "has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud."

Part II of the SFO Act provides the SFO with more extensive powers where: "...the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed..."

The SFO's Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2012-2015 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz