SFO closes WSD investigation

SFO closes WSD investigation

The Serious Fraud Office (SFO) today announced that it had closed its investigation into WSD Global Markets Limited and related companies.

The investigation began in October 2010 after receiving complaints from overseas complainants and New Zealand regulatory authorities.

Chief Executive, Adam Feeley, said that the SFO investigations had highlighted that the complaints related mainly to debts arising out of deposits with WSBC, a bank formerly domiciled in the Cook Islands, and placed in Judicial Management by the Cook Islands’ Courts following termination of its Cook Islands banking licence. 

 
While there was some misunderstanding as to the identity of the company within the WSD Group that owed the obligations and the terms upon which they were owed, the investigation concluded that these were commercial issues, and the SFO did not identify material evidence to suggest that the misunderstanding arose from fraudulent activity. 

Mr Feeley said “The fact that persons have not had their debts repaid is not in itself fraud. This, coupled with some considerable difficulties in securing sufficient cooperation with many of the overseas complainants, has prevented us from taking this matter any further.”

Mr Feeley noted that the SFO had only investigated 9 specific complaints concerning WSD and its related companies.  “The decision not to take the investigation further, should not be interpreted as an approval or endorsement of the WSD businesses.  The only message taken from the SFO’s action should be that in relation to the specific complaints looked at the evidence available was not sufficient to support the laying of criminal charges.”

For further information

Adam Feeley
Chief Executive
Serious Fraud Office
Phone: 021 333 539

Note to editors

Role of the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Act in response to the collapse of financial markets in New Zealand at that time.

The SFO operates three investigative teams:

• Fraud Detection & Intelligence; 
• Financial Markets & Corporate Fraud; and 
• Fraud & Corruption.

The SFO operates under two sets of investigative powers.

Part 1 of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”

Part 2 of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”

The SFO’s Statement of Intent 2010-2012 sets out the SFO’s three year strategic goals and performance standards.  It is available online at: www.sfo.govt.nz(external link)