Huljich cops big fine for misleading investors

Former fund manager Peter Huljich has been convicted and fined more than $100,000 for misleading investors about the performance of his KiwiSaver scheme.

Tuesday, December 20th 2011, 12:28PM 8 Comments

Today in the Auckland District Court Judge Brook Gibson handed down fines of $112,500 to Huljich and $239,000 to the company he directed, Huljich Wealth Management, which was also ordered to pay $95,000 in court costs.

Huljich faced one charge brought by the Financial Markets Authority while the company, now known as HWM NZ Holdings, faced two charges relating to misleading claims about the performance of the Huljich KiwiSaver scheme.

Both Huljich and the company pleaded guilty to their respective charges in September and Huljich asked earlier this month to be discharged without conviction.

The FMA had asked for fines of between $700,000 and $800,000 for both.

The charges stemmed from offer documents between May 2008 and January 2010, which featured graphs comparing the performance of the Huljich KiwiSaver funds to other providers.

However, these figures didn't include related-party payments made into the funds at the direction of Huljich.

The Huljich KiwiSaver scheme was sold to rival fund manager Fisher Funds earlier this year for an undisclosed sum.

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Comments from our readers

On 20 December 2011 at 6:11 pm adam smith said:

Can anyone tell me why if the company and one Director are charged with providing a misleading prospectus and investment statement, the other two Directors (Dr Brash and Mr Banks) get off scot-free? Perhaps FMA could explain why all Directors aren't equally responsible? Phil, perhaps you could ask FMA to reply.

On 20 December 2011 at 7:33 pm reg said:

Seems a bit harsh. Unlike a lot of others he put money in rather than stuffing his own pocket and no one lost any money. Not too bad by NZ standards.

On 21 December 2011 at 8:44 am Independent Observer said:

I wonder why My Huljich - in his capacity as a Director - was singled out, and Mr Brash & Mr Banks escaped a dishonourable mention?

On 21 December 2011 at 11:07 am Dirty Harry said:

Reg, this has all been gone over before. Deceptive, misleading conduct is totally unacceptable. He artificially boosted the returns, attracted members because of that.
Propping up a non-performing fund (AKA “poor investment decisions”) and hiding that you have, while marketing the hell out of your 'performance' does hurt people. (Let’s not bring up ‘performance fees’ here although they could well be a relevant part of this discussion).
And if he hadn't got caught, you would expect he might want "his" money back at some point, somehow.

HWM / Huljich is KiwiSaver’s biggest embarrassment. From dodgy door-to-door sellers, to fake returns, to celebrity directors who escape accountability.
KiwiSaver is a better scheme with this outfit off the list.

On 22 December 2011 at 8:45 am Independent Observer said:

I tend to agree with Dirty Harry: It's not ok to fudge the system in anyway... irrespective of the intentions (good, bad or otherwise), or the celebrity status of those involved.

Huljich's actions have exposed the Kiwisaver system for being vulnerable and the Regulatory response for being inadequate.

I am now more concerned about how the judicial system targeted some Directors, whilst others got off scott free. It wasn’t so long ago that Reeves & Doolan were exposed for breach of duties, despite their pleas of ignorance.

On 22 December 2011 at 11:03 am Dirty Harry said:

IO has it. Since Long is now in the gun for lending his celeb credibility to Hanover, Banks and Brash should definitely be held to account right alongside Huljich.

In fact, all Long did was read a statement on behalf of a company, whereas Banks and Brash were directly involved in and responsible for the running of the company. By comparison Long was the lesser offender (if at all).

On 22 December 2011 at 2:03 pm Insurance broker said:

Now now people - we couldn't possibly damage Mr Banks' reputation now could we? He was pretty convincing in a presentation I went to for Hujlich KiwiSaver but then again he couldn't answer the question someone asked him as to of what the funds were actually investing in. The main point seemed to be the high returns so i'd say these guys have all got off very lightly.

On 30 January 2012 at 10:38 pm J Wood said:

This article should be retitled - Huljich cops huge reward for spruiking his Kiwisaver. This fine was just one of the costs of doing business and it was a drop in the ocean for the 20 million he made.