High court slaps former CBL Corporation director with $1.4 million fine
High court slaps former CBL Corporation director with $1.4 million fine | Insurance Business New Zealand
Insurance News
High court slaps former CBL Corporation director with $1.4 million fine
Decision follows proceedings concerning disclosure and conduct failures
Insurance News
By
Roxanne Libatique
Peter Harris, the former managing director of CBL Corporation Limited (CBLC, in liquidation), has been ordered by the High Court to pay a $1.4 million fine.
The penalty was issued following proceedings brought by the Financial Markets Authority (FMA) concerning breaches of continuous disclosure and misleading conduct under the Financial Markets Conduct Act 2013 (FMCA).
CBLC disclosure and misleading conduct breaches
The case, which has been ongoing since 2019, involved allegations that CBLC, a publicly listed company, failed to provide the market with critical information between 2017 and 2018.
the need for CBL Insurance Limited to increase its reserves
the existence of substantial unpaid insurance premiums from a French subsidiary
directives issued to its Irish subsidiary, CBL Insurance Europe dac, by the Central Bank of Ireland
Additionally, the regulator alleged that CBLC misled investors with a market announcement on Aug. 24, 2017.
CBLC’s settlement with FMA
In March, Harris reached a settlement with the FMA, admitting to seven violations of the FMCA. As part of the settlement, Harris and the FMA jointly supported the financial penalty, which was subsequently approved by the court.
Justice Gault, in delivering the court’s decision, highlighted that Harris’s actions undermined the integrity of New Zealand’s financial markets by depriving investors of crucial, accurate information.
“They are unfair to investors, and jeopardise confidence in the integrity and transparency of New Zealand’s financial markets. Any penalty must bear in mind such harmful effects. The contraventions denied investors access to accurate and timely information, and are inconsistent with the promotion of transparent financial markets,” he said.
The breaches, according to Gault, were inconsistent with the principles of transparency and fairness that are fundamental to the country’s market regulations.
Margot Gatland, head of enforcement at the FMA, noted that the fine reflects the gravity of Harris’s conduct, especially given his leadership position within CBLC.
“As the court states, disclosure is a fundamental obligation which ensures New Zealand’s listed capital markets are efficient, transparent, and fair, and that there is equality of information in the market,” she said.
As part of his settlement, Harris agreed not to take on any management or directorship roles with any listed companies or licensed insurers in New Zealand until the conclusion of another ongoing court proceeding. This separate case involves allegations related to CBLC’s initial public offering (IPO) in 2015 and is set for a hearing in April 2026.
CBLC was listed on the NZX Main Board in 2015 and had a market capitalisation of $747 million before its shares were suspended from trading in February 2018. The company was placed into voluntary administration that same month and entered liquidation in May 2019.
The censure followed an investigation prompted by a client complaint regarding advice on UK pension transfers.
The FMA’s review revealed shortcomings in deVere’s practices, including inadequate record-keeping, failure to demonstrate the suitability of its advice, and insufficient communication with clients about the risks involved.
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