Commission to pursue criminal charges against fin coys
Commerce Minister Lianne Dalziel is letting the watchdogs off the leash.
Thursday, May 22nd 2008, 5:45AM
The powers to take such action was given the to the commission last year: however as the law stands the commission can only use its litigation fund for civil, but not criminal, actions.
The Commission has received big boosts to its litigation fund over the past few years: it has gone from $1.3 million in 2005 to $5 million and annual increases of $854,000 for the next two years.
On top of that - as Good Returns reported late last year – the commission is diverting its windfall settlement in the Midavia Tranz Rail case into its litigation fund.
The total settlement, including costs and interest, is now $29.5 million, the commission reported last month.
It is understood nearly $20 million of this could go into the litigation fund.
The use of securities law to make criminal prosecutions is a new departure for New Zealand law but it is increasingly common overseas, with executives being jailed in the United States and Australia over recent years.
Dalziel says the commission and the Registrar of Companies are already working with receivers and liquidators of failed finance companies. Although funding decisions have yet to be finalised, their work on the cases is well advanced.
"It's clear that the threat of criminal conviction is an effective deterrent to criminal behaviour. The government is committed to making sure the Securities Commission has the money to do the job well," she says.
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