FMA staffer scam allegations damaging
Heads may roll at the Financial Markets Authority (FMA) after the embarrassing revelation that one of its analysts was charged with forging his academic record and running a Ponzi-style scam, a former senior adviser at the regulator says.
Monday, September 21st 2015, 6:00AM 
7 Comments
by Susan Edmunds
It was revealed by the NZ Herald on Saturday that Benjamin Anthony Kiro, who worked at the FMA from September last year until January, is accused of stealing $210,000.
It is alleged he convinced women he met on dating sites, and businesspeople introduced via associates, to invest in companies planning to list on the stock exchange.
Police say the money he was given was never invested. When asked about it, he produced a bank statement which police allege was false.
It is also alleged that he forged his qualifications to get his job as an FMA analyst. He claimed to have law and commerce degrees as well as an MBA.
One man who gave Kiro $120,000 told media that working at the FMA gave him credibility and he had assumed that the regulator would do due diligence on its staff.
Gavin Austin, now director of ABC Compliance, was a senior adviser of AFA monitoring at the FMA for three years.
He said the revelations could make things tough for the FMA. “It indicates their internal policies and procedures are not as tight as they should be.”
He said, in his experience, FMA recruiters put a lot of store in an applicant’s academic record. “Rather than looking at what skills the person brings to the role.”
He said, when he was involved in adding members to his team, the regulator’s recruiters did not closely follow the State Services Commission’s pre-employment guidelines. “They don’t tend to pay a lot of attention to that. Their recruiting procedures were not as in line with the State Services procedures as they should have been… heads could roll”.
The State Services Commission requires a base level of checks that all state sector employees are expected to meet when they are recruited, including confirmation of identity, nationality, right to work, criminal records, a check with a former employer and referees. It says: “Some agencies will undertake more detailed checks relevant to the nature of work undertaken by their employees, such as occupational specific qualifications and a right to practice.”
Kiro was recommended to the FMA by Frog Recruitment. Its director Jane Kennelly said her firm’s recruitment process included thorough checking and vetting and exceeded the industry standard.
FMA spokesman Andrew Park said the regulator was constrained in what it could say because it could be called as a witness in the case. He could not comment on Austin’s allegations specifically.
“Like any responsible employer, we take our recruitment procedures seriously and are extremely disappointed and concerned by the alleged offending. We believe our recruitment procedures to be sensible and proportionate for an entity such as the FMA but will nonetheless be reviewing them in light of this situation.”
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Comments from our readers
All these FX type operations allowed under regulation which are ponzi schemes and now a FMA employee running one.
They worry about the adviser force when they cannot keep their own employees in check. This is an absolute disgrace when they cannot keep to their own code of conduct. They are the enforcer and if this employee was an advisers employee - the company's directors would be in court.
I would like to hope we see the same with the FMA. If this was the IRD and one of their employees committing tax evasion their would be an external inquiry. The shark nets appear just to catch dolphins at present - so maybe time they start looking internally. They go on about risk profiling our clients and giving us hard time when they can't even do referee and CV checks on their own employees. Heads should roll and an external enquiry set up to investigate this and whether the FMA are doing the job they set out to do.
Not impressed - appears to be several sets of standards in regulation.
it seems much harder to hire someone with a genuine cv?
Regards
Brent
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And whilst humrous given the ridiculous, onerous and pointless procedural requirements to be an AFA that have obviously fallen short at the FMA, terrible for the industry as a whole.
Smacks of worst fears whereby the FMA is actually terribly under resourced dealing with too big a task.