Power refers Strategic Finance to Securities Commission

A spokesman for the regulator confirmed Power referred the MP's concerns about Strategic but declined to comment on whether it was investigating whether the finance company had misrepresented the status of some of the firm's securities.

Boscawen told Parliament in December that Strategic's accounts showed some $68 million worth of debt had been classified as second mortgages when it was effectively a third-ranking security.

"When Strategic Finance-a company that went into receivership just 10 days ago-prepared its 2008 accounts, rather than showing mortgages that were in substance first, second, and third mortgages, it showed only first mortgages and second mortgages," Boscawen told Parliament in a speech to the first reading of the Securities Trustees and Statutory Supervisors Bill last week. "A year later, when Strategic Finance did its accounts to 30 June, they now showed, for the first time, what the company called a second mortgage with a subordinate position."

Boscawen told Parliament that in his view, the finance company's accounts for the year ended June 2008 were misleading, and that this in turn may have misled investors who voted in favour of the moratorium. He said the situation was not corrected until June 2009 statements were prepared.