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Financial Markets Conduct Act 2013

Enforcement, liability, and appeals - Offences relating to defective disclosure and false statements

510: Offence of knowingly or recklessly contravening prohibition on offers where defective disclosure in PDS or register entry

You could also call this:

"Breaking the rules about giving true information when selling financial products is a serious offence"

Illustration for Financial Markets Conduct Act 2013

If you make an offer to people to buy financial products, you must follow the rules. You commit an offence if you break the rules in section 82 and you know or should have known that the information was false or missing. This can happen if you make a statement that is false or misleading, or if you leave out important information.

If you are a director of a company that breaks the rules, you can also commit an offence. This happens if the company makes an offer with your permission, and you know or should have known that the information was false or missing. You must have given permission for the offer to happen, and you must have known about the false or missing information.

If you commit an offence, you can be punished when you are convicted. As an individual, you can be imprisoned for up to 10 years, or fined up to $1 million, or both. As a company, you can be fined up to $5 million.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091740.

Topics:
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511: Offence of knowingly or recklessly contravening other provisions relating to defective disclosure, or

"Breaking disclosure rules on purpose or by being reckless can get you in trouble with the law."

Part 8Enforcement, liability, and appeals
Offences relating to defective disclosure and false statements

510Offence of knowingly or recklessly contravening prohibition on offers where defective disclosure in PDS or register entry

  1. An offeror that contravenes section 82 commits an offence if the offeror—

  2. knows that, or is reckless as to whether, the statement referred to in section 82(1)(a)(i) is false or misleading or is likely to mislead; or
    1. knows that, or is reckless as to whether, there is an omission as referred to in section 82(1)(a)(ii); or
      1. knows of, or is reckless as to whether there is, a circumstance of a kind referred to in section 82(1)(a)(iii).

        1. If an offeror contravenes section 82, a director of the offeror commits an offence if—

        2. the offer, or the continuing of the offer, of the financial products under the regulated offer takes place with the director's authority, permission, or consent; and
          1. the director—
            1. knows that, or is reckless as to whether, the statement referred to in section 82(1)(a)(i) is false or misleading or is likely to mislead; or
              1. knows that, or is reckless as to whether, there is an omission as referred to in section 82(1)(a)(ii); or
                1. knows of, or is reckless as to whether there is, a circumstance of a kind referred to in section 82(1)(a)(iii).

                2. A person who commits an offence under subsection (1) or (2) is liable on conviction,—

                3. in the case of an individual, to imprisonment for a term not exceeding 10 years, a fine not exceeding $1 million, or both; and
                  1. in any other case, to a fine not exceeding $5 million.