Blatant Dishonesty

Over the past fifteen years that we have run our financial planning practice, we have had a number of people contact us because of concerns that they have had with the services provided by other financial planners. Some of the concerns or problems have purely been the result of incompetent investment or insurance advice. However one fraudulent case affecting many investors surpasses them all. And there are a large number of victims.

Over the past few weeks we have been contacted by several very concerned family members to hopefully find light at the end of a tunnel from investments placed through Aucklandbased advisers, Bradley and Bradley by their parents and other family members. The businesses associated with these advisers are now in liquidation and the Serious Fraud Office is conducting a thorough investigation.

Never before have we encountered such deliberate deception. These investors had all or a significant portion of their life savings invested through Bradley and Bradley. They had been their advisers for many years. The reality unfortunately is that most likely all the monies they invested have gone west, unless the investments were held in the investors own names. We believe that things may have been going reasonably well for investors until 2006, when the Bradley’s appeared to have written to all their clients and moved them out of genuine investments at New Zealand Funds Management and into their own investment scam. We understand that most of the monies that had been invested through NZFM were withdrawn in the early 2000’s.

The documentation that we have seen for the investments the Bradley’s were offering could hardly be called documentation. There seems to have been no registered offer documents, and investors simply signed a piece of paper that Bradley’s sent them, and sent off their cheques. They appear to have been illegal offer documents.

The lengths that these people went to in order to cover their tracks is also almost unbelievable. The hard drives on their computers appeared to have been attacked with hammers in order to make them unreadable. Despite this, we understand that the SFO have managed to recover a reasonable amount. They had even sent client files to Australia for so called “safe keeping”. Fortunately the liquidators were contacted by an Australian freight forwarder in Sydney who happened to read a New Zealand Herald article about the liquidation. This enabled the liquidator to obtain several boxes of files.

There does not appear to be money in any known bank accounts in New Zealandor elsewhere. The liquidator has managed to secure a house reputedly worth $4.5M, however there is considerable debt secured against this property. Given the apparent lack of any monies in bank accounts there is a possibility that the Bradley’s themselves may have been scammed in a Ponzi scheme!

As is usual, it is the investors who will really miss out. For most it will mean a substantially reduced lifestyle in retirement. It will also reduce a lot of inheritances. Remember most of the investors were elderly. Unless something miraculous comes out of the woodwork, collectively they could have been scammed out of over $20 million dollars. Now it takes some really good planning to hide that amount of money. It also takes a lot of shopping or the good life to get through it also. But then again an Auckland based bank investment adviser managed to do it recently too!

Disclosure:As required under the Securities Markets Act 1988 and the Securities Markets (Investment Advisers and Brokers) Regulations 2007, a Pascoe Barton disclosure statement is available on request free of charge, by contacting Pascoe Barton Limited on (07) 306 0080 or from www.pascoebarton.co.nz.