Ponzi scheme lawsuit cracks $75m
A group of angry investors suing ANZ over losses in the Ross Asset Management Ponzi scheme say their claim now tops $75 million.
Ross Asset Management (RAM) investor group spokesman John Strahl said more than 500 out-of-pocket investors had joined the class action.
‘‘ANZ Bank was David Ross’s banker and profited for over 20 years from this relationship,’’ he said. ‘‘As the largest bank in New Zealand and one of the biggest fund managers in Australasia we believe ANZ Bank knew how client accounts should have been operated and should have known that the way the RAM accounts were being operated was in breach of the laws.’’
Ross was jailed for up to 10 years and 10 months in prison in November 2013, after pleading guilty to a series of charges related to his running of RAM, a Wellington investment management firm.
Hundreds of investors believed Ross was managing accounts with investments worth, collectively, almost $380m, but instead, he had been running a massive Ponzi scheme, and liquidators found only a fraction of the money investors believed they were owed.
Strahl said ANZ staff had noticed, and recorded concerns about how RAM was operating, and could have alerted authorities and RAM investors helping minimise losses.
‘‘They made observations internally about the transactions they saw,’’ he said. ‘‘But they never took any action.’’
Strahl believed ANZ owed a duty of care to people with money in RAM trust accounts.
‘‘This was the finding of the New Zealand Financial Markets Authority and is why the regulator fought the ANZ Bank in New Zealand for three years so it could bring this to the attention of RAM investors,’’ he said.
The case, which ANZ is seeking to have struck out in a hearing inmarch, could establish banks have a duty to act when they have suspicions of criminal wrongdoing.
‘‘Banks just can’t turn a blind eye when its suits them,’’ Strahl said.
‘‘What we are seeing in Australia is that it is unacceptable not to know and understand your client.’’
He drew a parallel between ANZ’S handling of the RAM accounts with Westpac’s antimoney laundering failures in Australia, which resulted in the resignations of the bank’s CEO and chair have stark parallels for New Zealand.
‘‘The investors in the Ross Asset Management Ponzi scheme have been similarly let down by ANZ Bank in New Zealand,’’ he said. The action against ANZ Bank is being fully funded by LPF Group, a New Zealand-based litigation funder.