Labour is calling on Simon Botherway, the man overseeing the establishment of a new financial markets regulation agency, to step down.
The Office of the Ombudsman is investigating a complaint that Mr Botherway failed to disclose a potential conflict of interest when the Securities Commission recommended placing Timaru businessman Allan Hubbard into statutory managment.
Mr Botherway's brother was bankrupted after Mr Hubbard's South Canterbury Finance put his business into receivership last year.
Labour's finance spokesperson David Cunliffe told Parliament on Tuesday night that Mr Botherway also has close links with the major beneficiary of the deposit guarantee for South Canterbury Finance.
Mr Cunliffe said Mr Botherway must immediately stand aside from the board establishing the new Financial Markets Authority.
Mr Hubbard and his wife Margaret were placed under statutory management on 20 June, along with Aorangi Securities and several other trusts.
South Canterbury Finance, owned by Mr Hubbard, was put in receivership on 31 August owing about $1.6 billion to 35,000 investors.