SFO chief executive Adam Feeley said WSD was until recently controlled by former Wall Street banking corporation director Riaz Patel and investigations also included the wider group of WSD Financial (NZ) Ltd, WSD Financial Group Ltd and others, none of which are accredited or regulated by the NZX.
"Most of the investors in WSD are overseas residents, so it is important that the SFO does all it can to protect New Zealand's reputation amongst both domestic and international investors as a well-regulated and safe place to invest," he said in a statement, following the execution of warrants at WSD Group's premises in Mount Eden Rd and at a private residence in Glendowie yesterday morning.
Mr Feeley said the investigation, which was being co-ordinated with sharemarket operator NZX and the Securities Commission, centred on allegations "WSD has failed to correctly account to investors for funds received".
As background material, Mr Feeley said WSD Global Markets Ltd was the outsourced margin trader for WSBC Bank, formerly the holder of a banking licence in the Cook Islands.
The Cook Islands Financial Supervisory Commission placed WSBC in statutory management in 2008 and revoked the banking licence with effect from December 2009. During the period of statutory management, the investments of many WSBC clients "appear to have been transferred to WSD entities".
" Concerns have been raised over the legitimacy of some of these transfers," Mr Feeley said.
WSD was believed to be operating in New Zealand, Australia, Kenya, India, Thailand, United Arab Emirates and the United States.
