Financial Markets Authority Chairman Craig Stobo steps down after independent review into his conduct

Financial Markets Authority (FMA) chairman Craig Stobo has resigned, following an independent review into his conduct finding "just cause" for him to be removed from the FMA board, based on public comments he made falling "well below the expectations of a Crown entity board chair."

An independent review was undertaken by King's Counsel Wendy Aldred after the Ministry of Business, Innovation and Employment (MBIE) announced in December that an investigation had been launched. 

The review examined several matters including his relationship with a former staff member, his travel and role as an independent director for a company.

While Stobo's conduct on some of these other issues didn't meet the 'just cause' threshold for his removal, the review said: “Together, however, these matters somewhat contribute to my conclusion that Mr Stobo’s conduct as a whole has not reflected a diligent prioritisation of the FMA’s interests over his outside activities, and weigh further in favour of my overall conclusion.”

The findings

There was no evidence of an inappropriate relationship between Stobo and a former staff member with whom he attended a programme of events with in Estonia in July 2025, the review found.

“However, there were shortcomings in Mr Stobo’s communications with the FMA,” Aldred wrote in the review.

Kyla Bottriell, the former staff member, said she welcomed the release of the independent investigation.

"It confirms I had an entirely professional relationship with Mr Stobo. That finding matters because false and damaging rumours about me were allowed to circulate within the FMA and to media, causing me both personal and professional harm," Bottriell said.

"The report corrects the public record, but it does not repair the harm, or answer wider questions about how a conduct regulator allowed misinformation to escalate causing lasting damage to my reputation."

Bottriell says she has raised; "legitimate concerns through proper channels about the FMA's internal culture ... These concerns predate this investigation and remain unaddressed."

"The FMA holds market participants to standards of fairness, transparency and good conduct. It should apply the same standards internally. I expect the FMA to acknowledge the harm caused to me and to support a credible independent review of the conduct and culture issues that allowed this to occur."

The FMA has been approached about Bottriell's comments.

Asked about the report, the FMA directed interest.co.nz to MBIE for any comments on the review, which shared details from Commerce and Consumer Affairs Minister Cameron Brewer's press release. 

Brewer said he had accepted Stobo's resignation. Following the release of the report, he said it was appropriate for Stobo to resign from the role.

“The Financial Market Authority’s primary role is promoting and facilitating the development of fair, efficient and transparent financial markets in New Zealand. Confidence in the independence and integrity of the regulator, and in its leadership, is fundamental."

Brewer thanked Stobo for his service. "During his time as Chair, the FMA has worked through significant change across the financial services sector and continued work on the development of New Zealand’s financial markets regulatory framework, including engagement with regulated entities and cross‑sector agencies.”

'Breached the requirement of political impartiality'

The report also found Stobo “appropriately disclosed to the FMA that he had been appointed as an independent director of The Independent Mortgage Company Ltd.”

Stobo later agreed to resign as an independent director of that company but the review said there was a delay in his resignation and “he should not have delayed for as long as he did.”

Travel also came up as an issue. Aldred said in the review: “I do not consider that Mr Stobo’s conduct in making several applications for travel expenses that would have seen him combine personal travel with FMA funded travel was inappropriate.”

“In short, he made the applications as required and, to the extent that they were declined by the Audit and Risk Committee Chair, he accepted those decisions. The process operated as per FMA policy.”

The review also pointed out that Stobo’s conduct in making certain comments in the media and a public submission to Parliament on the Treaty Principles Bill “fell well below the expectations of a Crown entity board chair”.

“His conduct in making comments in the media that were laudatory of the present coalition government (and specific members of it) and critical of the opposition, breached the Public Service Commission’s Code of Conduct for Crown Entity Board Members and specifically breached the requirement of political impartiality,” Aldred said in the report.

“The comments made by Mr Stobo would, in my view, be likely to erode the public’s confidence in the independence of the FMA, and could adversely affect its ability to work with future governments.”

The review said Stobo also questioned the requirement for a mandatory Climate Related Disclosures regime. Given that Climate Related Disclosures monitoring and enforcement are FMA functions under law, he should not have done this without discussing it with the board, the review said.

“Mr Stobo’s reliance on not having referred to his FMA role when commenting, and on stating that his remarks were made specifically in some other capacity, was insufficient to overcome the concern that people would associate his views with the FMA or its Board, given the high profile of the FMA Board Chair role, particularly within the financial sector.”

'Just cause' for removal

Aldred, in the review, said in relation to the question of whether there was “just cause” for his removal as a FMA board member, she concluded there is “just cause” based on her findings in regards to issues around his public comments.

"The repeated nature of Mr Stobo’s conduct, notwithstanding guidance provided on his induction into the role and the concerns subsequently raised with him by FMA management, has contributed to my view of the seriousness of this non-compliance."

In terms of other matters in relation to engaging with staff and The Independent Mortgage Company Limited situation, Aldred said; “there were shortcomings in Mr Stobo’s conduct that reflected a lack of judgement on his part but which fell short of conduct that would have, by themselves, amounted to ‘just cause’”.

“Together, however, these matters somewhat contribute to my conclusion that Mr Stobo’s conduct as a whole has not reflected a diligent prioritisation of the FMA’s interests over his outside activities, and weigh further in favour of my overall conclusion.”

Steven Bardy will continue as Acting Chair while a process is undertaken to appoint a permanent Chair.