The Serious Fraud Office (SFO) says it has launched a formal investigation into David Ross, his in-receivership Ross Asset Management Limited and associated entities.
The announcement comes after Ross Asset Management's receiver PwC last week released a damning report saying it could only locate NZ$10.2 million of a purported almost NZ$450 million held by Ross Asset Management on behalf of 900-odd investors, and suggested the business may have been operating as a Ponzi scheme.
Acting SFO CEO Simon McArley said the SFO had been working with the Financial Markets Authority (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," McArley said.
“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 (receiver) John Fisk early this week to progress that”, he added
“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”.
Following complaints by investors, the FMA opened its own investigation into Wellington Financial Advisor, David Ross and firm Ross Asset Management on 25 October. A freeze was obtained on David Ross’ assets and John Fisk and David Bridgman of PwC were appointed receivers and managers.
"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," the SFO said.