The Wellington financial adviser accused of running a Ponzi-like scheme affecting 1200 investors – including Wakatipu residents – has pleaded guilty to charges laid by the Serious Fraud Office (SFO) and Financial Markets Authority (FMA) today.
David Ross, former manager of Ross Asset Management (RAM) made his guilty plea in the Wellington District Court.
SFO charged Ross on June 13 with four counts of false accounting and one count of theft by a person in a special relationship.
Two weeks later, the FMA charged him with providing a financial service when not registered, making a false or misleading declaration or representation to FMA to obtain Authorised Financial Adviser status, and supplying information or producing documents to FMA which he knew to be false or misleading.
Ross has been remanded in custody and is scheduled to reappear in the dock on October 24 for a sentencing date.
The SFO has alleged large portions of Ross’s client portfolios were invested through a related broker Bevis Marks, with the value overstated by more than $380 million. A Ponzi scheme is a money-go-round arrangement which uses cash from new investors to pay returns to existing members, who typically think they’re reaping the rewards of an astute investment plan.
Ross Asset Management’s assets were frozen and receivers appointed last year by the FMA after the watchdog received complaints – including one from a Wakatipu investor – about delayed or non-payment of investor funds.
Ross wasn’t available in the early days of the investigation due to his hospitalisation under the Mental Health Act.
An estimated 27 Wakatipu investors are among those said to have lost out.