A group representing the majority of investors in Ross Asset Management have challenged the proposed payout and won a bigger share of the distribution.
The action was around how money from the successful class action against the ANZ bank for its failure to act on the Ponzi fraud of David Ross (pictured) was distributed.
Under the original proposal a minority of the 555 investors were to receive significantly more money than the other group.
"The smaller group will receive approximately four times as much for each dollar invested as the larger group," Ross Asset Management Investors Group (RAMIG) spokesman Bruce Tichbon says.
"However, our initial calculations are that the disadvantaged majority of investors will be about 33% better off because of the court action they took."
He describes the distribution decision as "a huge moral victory."
Even though the distribution will still favour a minority of the 555 investors over the majority.
Tichbon said in her decision the judge changed a key parameter in the distribution calculation to be more favourable to the disadvantaged group. The judge also awarded costs to the RAMIG group who raised nearly $20,000 through crowd funding amongst themselves to pay for a lawyer to argue their case.
He says it shows "investors can stick up for themselves."
After nine years of litigation the final distribution is approaching, he says.
"In the final wash, the unluckiest investors will get about 25% of their money back, and the luckiest investors will get 100% of their investment back."
"If the pool of money had been distributed fairly and equitably from the outset, we estimate all investors would have got about 60% of their money back. As it now stands, some investors have got their life savings back, others only a pittance."
Around $115 million was invested in the RAM Ponzi scheme.
"RAM investors have been let down by a legal process that should have immediately recovered their money and redistributed it fairly, Tichbon says. "Instead, after the investors have paid over $15 million in legal fees and costs, the final distributions are so unfair that it is almost laughable."
"The reason for the unfair final distributions seems to be New Zealand’s incredibly complicated matrix of commercial law that does not adequately recognise the characteristics of a Ponzi. Despite amazing efforts from several judges over the years to achieve fairness for the RAM investors, for which we are grateful, the situation could not be corrected.
"The government previously recognised the gross unfairness of our lack of Ponzi specific law and proposed a recovery and distribution system that would have overcome most of the problems. The proposed new law could have seen the RAM Ponzi mostly fairly settled in months instead of years, with costs a fraction of the $15 million investors had to pay. But mysteriously the government suddenly dropped the proposed new law; investors can only guess the reasons behind this decision.
"Our Ponzi recovery law is a mess, the unfair results for the RAM investors demonstrate this without a doubt. Other countries have vastly superior laws that better protect investors who are unlucky enough to be confronted by a fraudster like David Ross," Tichbon says.
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