The Financial Markets Authority (FMA) has reached a resolution with Peter Harris, former managing director of the defunct CBL Corporation Limited (CBLC).
This settlement pertains to legal actions concerning allegations of failures in continuous disclosure and misleading conduct that took place between 2017 and 2018.
At the heart of the matter were accusations by the FMA that CBLC did not fulfill its duty to inform the market about critical issues affecting its operations. These included:
Additionally, CBLC faced allegations of deceptive practices in connection with its August 2017 market communication.
As part of the agreement awaiting judicial endorsement in Auckland's High Court, Harris has acknowledged contraventions under the Financial Markets Conduct Act 2013. Moreover, he has consented to an Enforceable Undertaking that prohibits him from occupying any management or board roles within New Zealand's listed or licensed insurance firms, pending the resolution of ongoing legal matters tied to CBLC's initial public offering in 2015.
FMA head of enforcement Margot Gatland shared her approval of the settlement's terms, highlighting its alignment with the regulator's mission to address and penalise major infractions by CBLC's leadership.
“The FMA took these civil proceedings in the public interest to meet our regulatory objectives, including to hold significant misconduct to account by several directors and officers of CBLC. We are satisfied this agreement to move to a penalty hearing, with in-court admissions of contraventions, and the management restrictions to which Mr Harris is now subject, meets our objectives at this time in relation to Mr Harris and the Continuous Disclosure Proceeding,” she said.
In a related settlement from December 2023, CBLC and its former executives agreed to a$72.5 million settlement with shareholders and liquidators, an agreement that included a personal contribution from Harris. While the defendants did not admit any wrongdoing, a considerable portion of this sum is allocated to CBLC's shareholders who joined in the action.
The agreement between the FMA and CBLC follows civil proceedings against Tower Limited after allegedly failing to properly apply discounts to customers with multiple policies.
