Unemployed Timaru financial adviser Neville Cant has been found guilty of two charges under the Securities Act.
Cant had pleaded not guilty to offering and allotting securities related to the Gables Proportionate Ownership Scheme to members of the public without a prospectus or an offerer’s statement. Two companies of which he is a director, Investment Management (IML) and Combined Financial Services, both faced the same charges.
Following a three-and-a-half day hearing in the Timaru District Court, Judge Paul Kellar found all six charges proven against Cant and the companies yesterday.
The problems with the investment offer began in early 2006 when the Securities Commission decided the information supplied to prospective investors did not comply with the Securities Act. Cant and fellow director Rhys Morgan contacted a lawyer who rewrote the documentation.
Those documents were not completed until less than 24 hours before the settlement date for the purchase of a $2.5 million Auckland property at the centre of the investment deal, May 23.
While Cant had told the court he visited 14 of the 15 investors over a 24-hour period beginning on May 22, taking the offerer’s statement to them, Judge Kellar found he had not.
He could not exclude that Cant had gone to Christchurch on May 22 as he told the court, but the judge said it did not make sense that one investor faxed an application form to Cant’s Timaru office around 1pm the following day, if Cant had met the man the night before, given him an offerer’s statement and had him fill out an application form, which Cant claimed he took away with him.
The judge did not accept that the South Canterbury and North Otago investors had received the offerer’s statements on May 23 as Cant claimed.
Cant’s phone records showed only two calls to investors on May 23. He did not accept the others had called Cant to set up appointments for that day.
If investors had time to review the offerer’s statement they would have seen the investment was different from the scheme they had earlier been asked to invest in, as it did not contain a share component, which would have altered the returns. If he did deliver the statements, then Cant had not drawn the change to their attention, the judge said.
He accepted Cant was under immense pressure to have the deal go through but it was not enough to say he could not comply with the legislation because he ran out of time.
A nominal sentencing date of May 11 was set, although the judge indicated sentencing might occur in Oamaru. Herald Staff
Adviser guilty of cutting corners | Stuff.co.nz.
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