The Ross Asset Management Investors Group (RAMIG), which represents more than half of the 900-odd RAM investors, has written to the Solicitor General outlining its concerns.

The group said that “following the FMA’s previous lack of action and because warnings about RAM’s viability were ignored three years ago by the authorities… the FMA may be unlikely to objectively investigate issues of its own culpability.”

In an email to the Solicitor General, RAMIG highlighted a number of issues it said were relevant to the question.

It said RAM director David Ross had become an Authorised Financial Adviser and “the action of the FMA and this disclosure was instrumental in assuring many investors that RAM was legitimate and had a more reasonable risk profile.”

The government had passed major pieces of financial legislation since the finance company crashes of about 2008, including the Financial Advisers Act 2008 and the Financial Markets Authority Act 2011, the group said.

“These actions created the impression of reasonable regulatory supervision and oversight of the financial markets, but this was not in fact the case, as evidenced by the collapse of RAM.”

The group also referred to recent news that the Securities Commission (the precursor to the FMA) was warned that there was cause for concern about RAM three years ago in 2009, yet no action was taken. 

“Further, the FMA may now have a conflict of interest, in that it has failed to act as above but is now engaged in the investigation, receivership, liquidation of RAM and potential action against Authorised Financial Advisers who were involved,” RAMIG said.

“This conflict arises at least in part because the FMA now has an incentive to suppress any evidence of liability on the part of the FMA/Securities Commission/government that may impact future liability of the parties.”