The Serious Fraud Office executed search warrants as part of an investigation into Barry Kloogh, of Breathe Financial.

It followed inquiries by the Financial Markets Authority, which led to a referral to the SFO.

Kloogh offered investment, insurance and KiwiSaver advice.

In a statement on the Breathe website, staff said they were shocked by the developments and had been effectively suspended from their employment without pay.

“Obviously, that will impact us all.  However, we collectively believe that Breathe's clients deserve our best professional efforts and we want to communicate as much information as we currently possess, to better inform you. As we understand it, the SFO is investigating all aspects of Barry Kloogh's commercial activities, but particularly his investment activities.

“This investigation effectively 'freezes' Breathe's financial and investment services, until it is concluded.  None of us are personally involved in the investment side of Breathe - that has been Barry Kloogh's sole responsibility.”

Records show he currently owns six properties, including a $1 million-plus lifestyle property in Alexandra and a St Clair, Dunedin, property worth nearly $1m.

He is also a director or shareholder of a range of companies.

It has been reported that at least one investor is setting up a group to represent those affected.

The SFO will only take action in cases of serious or complex fraud – usually those that run into the multiple millions.

A spokesman for the FMA said it could not comment further on the case.

“At this point, there’s nothing we can add to the statement that was issued by the FMA/SFO last week.”