Investment brokerage firm Forsyth Barr says a high credit rating was the reason it recommended its clients invest in the failed financial product Credit Sails.
The Commerce Commission announced on Tuesday it has reached an out-of-court settlement with five companies that marketed the product in 2006.
They are: Forsyth Barr, Forsyth Barr Group, Credit Agricole, Credit Sail and Calyon Hong Kong.
The companies have agreed to create a $60 million fund to return to investors, meaning they will receive back about 85% of the money they invested.
The Commission said Credit Sails was marketed in a way that is likely to have breached the Fair Trading Act.
Forsyth Barr managing director Neil Paviour-Smith says his company was influenced to offer the product by an AA credit rating from Standard & Poor's.
He says the decision to market the Credit Sails investment offering occurred before the global credit meltdown.
Since then, Mr Paviour-Smith says, Forsyth Barr and others have revised their views about such products and that is why they are no longer on the market.
He says the company has been been trying to secure the return of Credit Sails investors' money since 2009.
Fund manager Gregory Marshall, who is acting for about 800 investors, says Credit Sails was designed to fail and his company tried to warn off potential participants.