Moves to De-register Adviser for ‘Tombstoning’

A financial adviser, alleged to have applied for health and life insurance for non-existent people in order to receive commission payments, is being de-registered and has had his financial advice provider licence cancelled, the Financial Markets Authority says.

In a statement the FMA says it has cancelled Les Vela Ltd’s (trading as Wise Insurance) FAP licence. It has also directed the Registrar of Financial Service Providers to de-register financial adviser and Les Vela’s sole director and shareholder, Le Zhou (also known as Eric), from the financial services providers register and prevent his re-registration for five years.

…We are seeing an increase in fraudulent activity by financial advisers, particularly in relation to insurances and mortgages…

FMA’s Executive Director for Response and Enforcement Louise Unger says under current weaker economic conditions “…we are seeing an increase in fraudulent activity by financial advisers, particularly in relation to insurances and mortgages. While these instances are the exception rather than the norm, the severity of the conduct makes this a priority for the FMA to address.”

…It investigated 15 insurance policy applications submitted on behalf of 27 non-existent individuals, resulting in commissions paid to Zhou totalling $260,937…

The authority says that following notification from the impacted insurer, it investigated 15 insurance policy applications submitted by Zhou on behalf of 27 non-existent individuals, resulting in commissions paid to Zhou totalling $260,937.

“The practice of submitting insurance applications for people who do not exist is known as ‘tombstoning’. Behaviour like this results in the erosion of the public’s confidence in the financial advice industry,” says Unger.

“It is important for financial advisers to act ethically to maintain trust and uphold the integrity of the sector, which Mr Zhou has failed to do.”

The FMA says it’s satisfied that Les Vela no longer meets key requirements for a market services licence under the Financial Markets Conduct Act because:

• Les Vela and Le Zhou failed to comply with the code of conduct, in particular, act with integrity
• Le Zhou, as Les Vela’s sole director and its only financial adviser, is not a fit and proper person
• Les Vela is likely to breach its market services licensee obligations 

In addition to notifying the FMA, financial services providers are able to report concerning financial adviser conduct to the police given such conduct may constitute a criminal offence.

The FMA says in this case, the police arrested and charged the North Shore man in July 2025. He faces three representative charges of forgery in the North Shore District Court, reappearing in October.

The FMA statement also quotes Acting Detective Senior Sergeant Ben Bergin, from the Waitematā Financial Crime Team who says police are “…continuing to see an increase in people using their employment or access to systems to commit offending. Abusing these systems for personal gain is a criminal offence, and police are continuing to hold offenders to account.”

The authority adds that misleading or fraudulent activity by financial advisers is a focus for it, as outlined in the recently-issued Financial Conduct Report that lists its regulatory priorities for the coming year.