The Financial Markets Authority has begun civil action against the directors and promoters of finance company Hanover Finance.
Some 16,000 investors lost $550 million in the company's collapse.
Financial Markets Authority chief executive Sean Hughes told TVNZ's Q & A programme it commenced action against Hanover's key players on Friday.
Six people are named in the action - Eric Watson, Mark Hotchin, Greg Muir, Sir Tipene O'Regan, Bruce Gordon and Dennis Broit.
Mr Hughes says the action has been brought because of statements made in fundraising documents and advertisements in 2007 and 2008, which the authority alleges were misleading and untrue.
He says the authority has focussed on a period when it believes it has the best chance of securing a judgement against those named in the lawsuit.
Mr Hughes says about $35 million was invested in Hanover during the period in question.
He says the authority didn't believe a criminal prosecution was possible, but the lawsuit will be seeking both financial penalties and compensation.
Mr Hughes says he won't rule out further claims against the individuals named in the lawsuit, or against others.