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FMA billed $125,000 over collapsed trial

NZ Newswire logoNZ Newswire 14/03/2018

The financial markets watchdog has been hit with a $125,000 bill for costs and an "unprecedented" mistake as it tries to restart a fraud case that collapsed after nine months in court and cost it more than $3 million.

Prosecutors have been given a July, 2018 retrial date for their case against Viaduct Capital and Mutual Finance executives Paul Bublitz, Bruce McKay and Richard Blackwood, brought by the Financial Markets Authority.

The first trial against the group - who ran the companies that collapsed in 2010, owing investors more than $17m - kicked off in 2016 and was expected to last 12 weeks.

Nine months later, a mistrial was declared because prosecutors accidentally turned a large amount of documents over to the defence too late, breaching disclosure rules.

All charges against a fourth accused, Lance Morrison, were dropped in June, while a retrial was ordered for the other three.

In a decision released on Wednesday, the High Court awarded Morrison $75,000 towards the costs of his defence - although he asked for more than $200,000.

The court also ordered the FMA to pay $10,000 to each of the defendants and to the Ministry of Justice for the procedural error that led to the first trial being aborted.

"It is common ground the failure in the present case was significant," Justice Mark Woolford said.

"The volume of late disclosure is seemingly unprecedented in New Zealand."

Figures released under the Official Information Act show the original prosecution cost the FMA $3.58m, including nearly 13,000 staff hours.

A fifth accused, Peter Chevin, was sentenced to nine months' home detention after pleading guilty at the start of the trial in 2016.

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