New securities laws will test Serious Fraud Office, chief says

Serious Fraud Office chief executive Adam Feeley Photo / Brett Phibbs

Serious Fraud Office chief Adam Feeley has raised questions about the corporate crimefighter's ability to perform the role expected under the theoretically tougher new securities law.

In its annual report released yesterday, Feeley said substantial changes to corporate and securities law and the establishment of the new Financial Markets Authority would have an impact on the SFO.

There was considerable work to be done in the coming year to ensure a seamless operation between regulatory and law enforcement agencies "when it comes to following up on investor and public concerns within New Zealand's financial markets", Feeley said.

New Zealand had only a small pool of the specialised skills needed to investigate financial crime and "the budgetary resources for this work are limited".

"Consequently, if there is to be an effective response to the legitimate concerns raised by the Capital Markets Development Taskforce regarding enforcement, skills and budgets within the public sector will need to be aggregated in the most operationally and cost-effective manner possible."

Feeley raised concerns about the SFO's ability to sustain even its present workload.

It dealt with more than 200 inquiries and more than 100 cases in the year to June and needed more staff to handle the work.

"For an agency which has had fewer than 30 operational staff for most of the year, this is an impressive workload," Feeley said.

"Ultimately, though, it is not a workload which is sustainable - there is inevitably a correlation between staff numbers, case numbers and timeframes."

He said that in the past the SFO managed a high number of investigations and prosecutions but that resulted in there being four to five years between the start of an investigation and the conclusion of a prosecution.

Last year it tried to conclude as many cases as possible and reduce the number of active cases from 69 to 47.

"Notwithstanding the reduction of caseload, the ratio of staff to cases remains problematic."

- Additional reporting: NZPA