The Financial Markets Authority has started civil legal proceedings against the former 'directors and promoters' of finance company Hanover.
More than 16,000 investors lost more than $500 million when the company collapsed in 2008.
Sean Hughes, the CEO of the FMA told TV ONE's Q&A program papers were filed in Auckland on Friday.
Here is the FMA statement:
On Friday March 30 the Financial Markets Authority filed civil proceedings against directors and promoters of Hanover Finance Ltd, Hanover Capital Ltd, and United Finance Ltd.
Proceedings under the Securities Act have been filed against Mark Hotchin, Eric Watson, Greg Muir, Sir Tipene O’Regan, Bruce Gordon and Dennis Broit.
They relate to statements made in the December 2007 prospectuses, subsequent advertising, and the March 2008 prospectus extension certificate.
FMA is seeking declarations, pecuniary penalty orders and compensation for investors who made investments during the period 7 December 2007 to 22 July 2008.
During this period new investments and reinvestments totalled $35 million.
The Serious Fraud Office investigation into matters relating to the Hanover Group is continuing.
This action follows hot on the heals of a successful criminal prosecution in the Lombard case.