The law has imposed more than 100 years of detention on managers of finance industry failures; fines and reparation minimal

The law has imposed more than 100 years of detention on managers of finance industry failures; fines and reparation minimal

Starting in 2006, finance companies started to fail.

A few became a rush.

We reported on the industry collapse, summarising the fall in our Deep Freeze list.

One incessant gripe from commenters and investors who became victims, was there seemed to be no legal consequences for leaders of these failed companies who lost so much of their investors' money. 

More than $9 billion of investor funds got caught up in the troubles, and more than $3 billion was lost.

But the legal machinery moved slowly into gear, and has gained some traction and momentum.

Company managers have gone to jail. Others have received home detention and community service sentences. Some have even been ordered to make reparation in addition to fines imposed.

Now is the time to summarise what the legal system has achieved in terms of sanctioning business leaders over this whole very sorry saga.

So we have compiled this Porridge List.

It is a comprehensive table, detailing who has received what punishment.

There are 67 companies on our Deep Freeze List.

There are currently 51 people on our Porridge List.

Nineteen of them got jail time, and are serving a combined 86 years in total.

Another 19 of them got home detention, and their movements are restricted for a total of 15 years.

Thirteen of them got Community Service, committing them to 159 days of service.

And 14 have been ordered to make reparation or pay fines, and their fines total $3.3 million.

So far. There are more trials to be completed, others yet to get underway.

We are asking readers to review our lists and advise any corrections or updates that need to be made. You can email us at news@interest.co.nz or use the comment box below or on the Porridge List page itself.

The interim totals of all sentences are:

Total jail time ... 86 years & 1 month
Total home detention ... 15 years & 1 month
Total community service time ... 158.5 days (0.43 years)
Total $ reparation and fines ... $3.3 million

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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But no investor has been jailed yet , have they , for being naive and greedy ?
 
... and not all the failed managers were dishonest ... incompetent yes , but not necessarily breaking the law ...
 
Jail some of the stupid investors who entrusted their lifesavinsg to a bunch of suede shoed feather merchants , say I .

Well, OK.  But you'll also have to be locked up for at least three years if your car is stolen, because you were stupid enough to park it somewhere unattended.  And if I was the judge I'd extend your non-parole period as punishment for your inexcusable negligence in not leaving a velociraptor in the back seat.

... ... my car wasn't stolen .... but someone did nick my Creedence Clearwater Revival CD ... Had to make do with Mantovani since then .... he is an excitement machine , Mr Mantovani ...

Well, jail's probably going too far for having your Creedence CD nicked.  Give yourself a spanking and that'll do.

.. listening to Mantovani for the last 15 years is punishment enough , methinks ...

 
I invested as small amount in a finance company, and I wasn't being greedy, it was only a few % above the bank interest rates. I fully read the prospectus too. However the prospectus was wrong, and some of the directors did go to jail or receive home detention as a result. If I had had the correct information I wouldn't have invested.
 
The streaker who ran across the field in a sport recently in Australia, I believe received 90 days jail time, yet some of these directors in NZ only got home detention. Something is wrong there. NZ is too soft I think, and I don't think we should have home detention. .
 

Sorry Rob , but wham bang , go directly to jail , do not pass go , do not collect $ 200 ....
 
... and take some spare clothes , extra-large sizes .... 'cos we're putting you in with the streaker guy ...

spare clothes optional on that one I think Gummy
 

Do you have a comparative list for benefit fraud. Maybe on a $ for years sentenced basis.

A great suggestion, and one from which we might be able to detrmine a finance/benefit fraud punishment ratio.
 
The 'ordered reparations' to 'money lost' ratios may also be interesting.

 

For welfare fraudsters, the average offending is $70,000, and those found guilty have a 60 percent chance of being jailed.

 

 

From: http://www.3news.co.nz/Courts-tougher-on-benefit-fraud-than-tax-dodging--study/tabid/1607/articleID/273541/Default.aspx#ixzz2eod78ObB

 

Which seems to come from this research

 

http://sydney.edu.au/law/parsons/ATTA/docs_pdfs/conference_papers/Marriot_P.pdf

How about you add to this  list David the incompetent bureaucrats who make running a business so bloody difficult. Example why change the motor vehicle register so that names are no longer disclosed. All this does is enable people to buy vehicles on finance, pawn them to some unsuspecting individual, and let the financier take a massive hit. It is a criminal act, yet some government cretin would deem it a civil matter. How bloody stupid. It is this sort of incompetent politicking that cost billions of dollars in losses to investors David and its time interest.co.nz started reporting fact not fiction, and expose some of the real issues facing kiwis , which only add cost to business and underpin the black economy. All in the name of satisfying a few civil libertarians who don't want there names recorded on a public record.

Why so eager to sweep deliberate criminal fraud under the carpet, downplay the severity by dragging up unrelated red herrings like benefit fraud, and blame the victims?  Criminals who've committed deliberate and pre-meditated offences shouldn't get this crawly suck-up rationalisation just because they had a glossy brochure, a company name vaguely evocative of European nobility and a nice suit.

What we actually need is some statistics on
`1. How much Community Service is actually completed
2. What do they actually do?
 
I haven't seen Sir Doug Graham picking up rubbish in my neighbourhood.

Based on these 1990s figures I would guess the main people getting community service are boy racers, taggers, and company directors (it is just there are a lot more boy racers and taggers). Breaching Community Service results in a fine not exceeding $500, which may be a bit more of an impost on most people getting Community Service.
 
http://www.justice.govt.nz/publications/global-publications/r/review-of-community-based-sentences-in-new-zealand/use-of-community-based-sentences