The Securities Commission has filed court proceedings over alleged breaches by Lombard Group of its disclosure obligations.
Lombard Group, which was the parent of the failed Lombard Finance and Investments, entered into a reverse takeover agreement with Australian Consolidated Insurance last year.
It was renamed Insured Group.
Insured Group's managing director, Wayne Millar, says he can't understand why the Commission is seeking penalties of up to $1.3 million from the current Australian owners, who have nothing to do with the 2008 position of either Lombard company.
Mr Millar says it's particularly disappointing for the company, which sought to be listed in New Zealand when other companies were leaving for foreign stock exchanges.
Insured Group says its operating subsidiaries in Australia aren't affected by the legal action, and it will update shareholders once it has received the full papers from the regulator and sought more legal advice.