A former Hanover boss has failed in an appeal arguing that debt security trustees should shoulder part of the damages being sought by the capital markets watchdog.
Mark Hotchin and other directors and promoters are being sued for $35 million by the Financial Markets Authority over prospectuses the regulator claims were misleading.
The Court of Appeal said the directors of finance companies hold the ultimate responsibility in verifying statements made to investors.
An Auckland lawyer specialising in securities law, Jeremy Muir said the decision makes clear the liability stays with Mr Hotchin and the other directors.
