Securities Commission shows its awake

The Securities Commission has released information about the status of its investigations into 50 failed finance companies, announcing it has completed 26 finance company investigations and is continuing with 24.

Friday, December 3rd 2010, 6:05PM 3 Comments

The release comes two days after law firm Bell Gully accused the commission of nodding off while finance companies failed.

"The Commission has worked extremely hard to ensure all failed finance companies are being thoroughly investigated," said Commission chairman Jane Diplock.

"The collapse of almost the entire finance company sector over a very short time period has meant that the Commission has had to deploy its limited resources effectively in deciding which cases to investigate first."

The release comes in the wake of accusations from New Zealand Business Roundtable chairman Roger Partridge that the Commission "nodded off."

Appearing before Parliament's commerce select committee Partridge said the regulator failed to use a wide range of existing powers to tackle inadequate disclosure to investors by finance companies.

Challenging the view the Commission lacked enough legal power to prevent the financial collapses he said, "The Securities Commission seems then to have nodded off."

In their update report the Commission revealed criminal charges have been laid against 35 directors or officers of finance companies either by the Commission, or after referral by the Commission, by the National Enforcement Unit of the Companies Office. Three directors have been convicted and civil and criminal charges against directors and officers of 11 companies are currently before the Court.

Diplock said the Commission did not usually comment on the progress of investigations due to the concern of causing reputational damage before evidence can establish whether grounds for concern are justified.

"We must also take care that we don't prejudice the fair and effective trial of a person who is eventually charged by releasing too much information," she said.

"On the other hand, we want to keep the public - and particularly investors - informed about our finance company work."

The Commission said the investigations were sparked by events between 2006 and 2010 when 50 New Zealand finance companies either went into liquidation or receivership.

"The scale and circumstances of the sector gave rise to concerns of inappropriate behavior and breaches of the Securities Act. The Securities Commission therefore began a programme of investigations into the failures."

The Commission also released details of the current finance company cases before the courts.

Details of all the charges can be found at www.depositrates.co.nz

« AMP aims at banks once AXA deal done

KiwiSaver mismatch a 'huge challenge' for advisers »

Special Offers

Comments from our readers

On 4 December 2010 at 3:16 pm albert k said:

I undersatnd what Roger Partridge as saying is SC was asleep prior and during the collapse. To wake up after that, is far too late, SC cannot resurrect the dead finance companies. SC's job is to prevent its death, and random audit without notice one of the most effective ways, which even developing countries practice. I too would like to get a job sleeeping till something big happens, then get paid more to investigate it. Any vacancies out there?

On 6 December 2010 at 11:22 am Barry said:

Totally agree talk about a reactive approach, to put something in place after 1 maybe 2 company collapses might be acceptable but to wait until there is 25+ and then wake up is laughable.

I'd also like to know whats happening with those jokers MFS (now Octavia)me and my family lost way too much money because of that bucket shop and I cant find a dam thing about the Parent company directors being sent to jail.

On 7 December 2010 at 3:21 pm Brunch said:

Securities Commission shows its awake... after sleeping through the first alarm, hitting the 'snooze' button a few times then jolting awake, suddenly sitting up and shrieking "holy s**t I've slept in!"