KEY POINTS:
Criminal prosecutions against finance companies that have misled investors may now proceed quicker, after the Government said today it will change Securities Commission rules.
Commerce Minister Lianne Dalziel said today that the commission will now be able to use its "litigation fund" to pursue criminal prosecutions. Currently it can only use this money for civil prosecutions.
The change means an amendment to the minister's "output agreement" with the Commission is needed.
"I want the regulator to have every support possible in order to allow it to take prompt and effective action that will help to rebuild public confidence in the finance market," said Dalziel.
Criminal cases have previously been handled by the Registrar of Companies' National Enforcement Unit which is part of the Ministry of Economic Development.
The Registrar of Companies will work with the Securities Commission on allocating responsibility for future criminal prosecutions.
"The Commission and the Registrar are already working with receivers and liquidators of failed finance companies," said Dalziel. "Although funding decisions have yet to be finalised, their work on the cases is well advanced."
Lianne Dalziel said criminal prosecutions under the Securities Act were an important part of the enforcement of the law. "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."
