Options trader admits fraud
A stockbroker who used his investors' money to repay others and fund part of an advance fee for a $US20 million loan has admitted fraud charges.
Gregory Alan Arnott, 51, entered guilty pleas to 10 Crimes Act charges brought by the Serious Fraud Office when he appeared in Auckland District Court on Monday.
Arnott, a stockbroker and options trader, was the director of Derivatek NZ and traded in options on behalf of New Zealand clients on the Australian Stock Exchange (ASX).
He admitted that, between April 2008 and May 2012, he used money received from investors for purposes other than options trading.
These included repaying other investors, and funding a portion of an advance fee to obtain a $US20m ($NZ23.5m) loan.
He issued false statements to investors to try to conceal the fraud.
It was earlier alleged the fraud involved $2.5m of investors' money but the exact amount has yet to be resolved, an SFO spokeswoman told NZ Newswire.
Arnott returns to Auckland District Court on July 30 for a disputed facts hearing and will be sentenced at at a later time.
SFO Director Julie Read says Arnott earned the trust of a group of investors through his personal links to them and then misappropriated clients' funds and misrepresented the true position of their investments.
"The SFO hopes that this outcome will go some way to assuring investors that there is an effective response to offending of this nature."
