SPCS

SOCIETY FOR PROMOTION OF COMMUNITY STANDARDS INC.

Jail sentences had a ‘chilling effect’ on company directors – NZPA

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Last year’s jailing of two directors of a finance company had a chilling effect on boardrooms, Serious Fraud Office head Adam Feeley told MPs.

Two directors of failed finance company Five Star were jailed in December for more than two years for misleading investors, some of whom lost millions. [Both have also been banned for five years from directing a company].

Former managing director Nicholas George Kirk was sentenced to two years and eight months in prison and former director Marcus Arthur MacDonald to two years and three months.

Mr Feeley told Parliament’s law and order select committee that jail was a strong deterrent,

“It really works with white-collar criminals. They don’t like going to jail,” he said.

“We had … the first imprisonment sentence for a finance company director. The level of consternation among company directors as a result of that was palpable.”

He said many who raised concerns were not doing anything wrong but feared potential action.

“There is no doubt that even one imprisonment sentence of a finance company director had quite a chilling effect on the corporate boardroom.” [Read more…]

Surge in Fraud points to huge cost

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Serious Fraud Office boss Adam Feeley has warned that a new report showing a surge in the value of fraud convictions is only scratching the surface of the true cost of financial crime in New Zealand. The latest KPMG fraud barometer showed that the value of fraud convictions in New Zealand in 2010 was more than $172 million, more than the value for 2008 and 2009 combined….

Mr Feeley said the KPMG study prompted discussion about financial fraud, but did not give a true indication of the true level of fraud being committed. “I think we are, and it’s a terrible cliche, really only beginning to cratch the surface of financial crime in New Zealand.”

Stephen Bell, head of forensics at KPMG, said … it was difficult to assess the true extent of fraud in New Zealand, although a 2010 KPMG survey showed companies believed only one third of frauds were being detected, and with lower level fraud excluded from the survey, it was possible the problem could be worth more than $1 billion a year.

Full story: BusinessDay.co.nz Hamish Rutherford, 28 March 2011 http://www.stuff.co.nz/business/money/4815448/Surge-in-fraud-points-to-huge-cost

Note:  The Society (SPCS) as part of its Constitution, seeks “To focus attention on the harmful nature and consequences of  …. fraud, dishonesty in business  and other forms of moral corruption.” Section 2(d)

“White-collar crime investigator” (SFO) probes suspected “serious or complex fraud”

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SFO opens probe into Bublitz’s Mutual Finance – Stuff Business News 30/12/2010

The Serious Fraud Office opened an investigation into the dealings of failed minor lender Mutual Finance last week.

The white-collar crime investigator began its probe on December 23 after receiving information from the financier’s receiver and the Ministry of Economic Development’s National Enforcement Unit (NEU), according to the SFO website.

“The director determined there was reason to suspect that an investigation into the affairs of Mutual Finance  and related companies may disclose serious or complex fraud,” the website said. “SFO has commenced its investigation and is working closely with NEU and the Securities Commission to progress the investigation.”

http://www.stuff.co.nz/business/money/4502880/SFO-opens-probe-into-Bublitzs-Mutual-Finance Story by Paul Mcbeth

Court signals seriousness of white collar crime – banned company directors – jailed

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Two of four former Five Star Finance directors, Nicholas Kirk, 65, an accountant and Marcus MacDonald, 89, a lawyer, were sentenced to prison terms at Auckland District Court today. All had been banned by the Registrar of Companies from acting in any management role in tany company, for five years, in April 2009.

Five Star Finance was put into receivership on 29 August 2007 owing 2,000 investors more than 46 million New Zealand dollars. Serious Fraud Office (SFO) chief executive Adam Feeley said:

“SFO is pleased with the delivery of a custodial sentence. This is the first sentencing in relation to a major finance company collapse [there have been 30 in the last few years], and continues the clear message from the Courts as to the seriousness of white collar crime.” [Read more…]

Bankrupting May Wang “in the interests of justice” – Assoc. Judge Hannah Sargisson

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Associate Judge Hannah Sargisson is reported as saying yesterday, that making prominent businesswoman May Wang bankrupt, while not an easy decision, was correct “in the interests of justice“.  But many may be asking: ‘what exactly does this (quoted) phrase mean and how does it relate to the broader concepts of “truth”, “moral absolutes”, “ethical standards”, “public interest” and “community standards” – given that “justice” is generally perceived to be connected to one of more of these ideas?

To answer this question one must bear in mind that the associate judge said that Ms Wang had not been forthright to creditors or the court and the disclosure of her interests in the UBNZ group, the vehicle through which Hong-Kong listed Natural Dairy had planned to buy the Crafar farms “has been entirely inadequate“. [Emphasis added] [Read more…]