Financier seeks costs after part-acquittal

A former board member of a failed financial firm is now seeking costs after he was partially exonerated of fraud charges and freed from prison.

Paul Bublitz’s nearly decade-old legal saga and the maligned Financial Markets Authority prosecution against him returned yesterday to the High Court at Auckland as he sought compensation for the criminal charges he was acquitted of.

The businessman, Bruce Mckay and Richard Blackwood were all found guilty in February last year of some of the charges the FMA laid after an investigation into the group began in mid2011.

However, after a successful challenge to the Court of Appeal, several of the men’s convictions were overturned in August, while Bublitz also walked free from his prison sentence.

The trio had been accused by the financial watchdog of deliberately misleading investors and potential investors in an attempt to rescue failing investments during the financial collapse of 2007

— 2008 (GFC).

Mckay and Blackwood were serving as directors of Viaduct Capital, while Bublitz was a board member for Mutual Finance, when the two firms went into receivership in 2010 — owing investors $17 million. Both Viaduct Capital, which was also investigated by the Serious Fraud Office and Treasury, and Mutual Finance were part of the Government’s GFC insurance scheme — meaning any losses would be passed on to the taxpayer.

Bublitz, represented by Rachael Reed QC, is now seeking costs under the Costs in Criminal Cases Act 1967 for the charges he was acquitted of.

The court heard at a brief hearing yesterday before Justice Fitzgerald that the Crown is also seeking costs for the charges Bublitz was convicted of — if he is successful in his own application.

Bublitz, who began his financial career as an 18-year-old, was at the hearing and sitting in the public gallery. The case is due to return to court in September.