Proceedings under the Securities Act have been filed against Eric Watson & Mark Hotchin as well as Greg Muir, Sir Tipene O'Regan, Bruce Gordon and Dennis Broit, the former directors and promoters of failed finance company Hanover which collapsed in 2008 causing 16,000 investors to lose more than $500 million.
The CEO of the Financial Markets Authority, Sean Hughes, says, "We make allegations that certain statements that were made in various fund-raising documents and advertisements over the 2007/2008 period were misleading and untrue."
"The money invested over that period is roughly $35 million and that includes investments and re-investments. We'll be bringing that claim to start with, and we'll be looking for liability decisions against those directors and promoters and penalties, and then we'll be looking at the issue of compensation."
Hughes said he was not ruling out future claims against the directors, or anyone else involved with the company, but the FMA was initially focussing on where it felt it had the greatest chance of success.
"The reality is a lot of the money has gone and the prospects of getting 100 cents in the dollar must be seen as remote," he said. "No one should think this is an easy task - that commencing litigation like this is akin to issuing a parking fine. These are very hard cases to run; they involve vast amounts of evidence."
He said he could not promise "mums and dads" they would get their money back, but said the FMA would do its best in the circumstances.
Well, Watson is said to still have over $US 200 million stashed away despite his extremely lavish lifestyle - that added to what the others have should go a reasonable way.
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