7 December 2011
The Financial Markets Authority has completed its criminal investigation of South Canterbury Finance (SCF) and will support the Serious Fraud Office's case against five individuals involved with SCF's affairs.
FMA Chief executive Sean Hughes said FMA will supply particulars of false statements in two SCF prospectuses to support some of the 21 charges filed by the SFO at the Timaru District Court today.
The untrue statements relate to the level of loan impairments and the availability of banking facilities, Mr Hughes said.
"As with other investigations into failed finance companies, FMA has worked closely with the SFO on this case.
"A single prosecution is more efficient and is consistent with FMA's Enforcement Policy, which allows for joint prosecutions where appropriate.
"We have also taken into account the fact that the Crimes Act charges laid by the SFO carry heavier maximum sentences than Securities Act charges targeting the same behaviour. Convictions on Securities Act charges would be unlikely to add to the penalties resulting from the SFO charges."
Mr Hughes said FMA was examining avenues to take civil proceedings in order to recuperate some of the moneys paid out to SCF investors under the Crown Retail Deposit Guarantee Scheme.
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