Financial Crime World

Financial Markets and Corporate Fraud in New Zealand

Introduction

This article provides an overview of key sections from the New Zealand legal code related to financial markets and corporate fraud. It highlights the main topics covered, including false accounting, FMA charges, and offences related to financial services.

False Accounting (Section 260)

  • Everyone is liable to imprisonment for up to 10 years who makes or causes to be made any false entry in any book or account or other document required or used for accounting purposes.
  • The intent behind this action must be to obtain by deception any property, privilege, service, pecuniary advantage, benefit, or valuable consideration.

FMA Charges (Section 11 Financial Service Providers (Registration and Dispute Resolution) Act 2008)

  • A person must not be in the business of providing a financial service unless they are registered for that service under this Part.
  • If a person knowingly breaches this subsection, they commit an offence and are liable to imprisonment or a fine.

Offence of False Declaration, etc, in Support of Application for Authorisation or Grant of QFE Status (Section 136 Financial Advisers Act 2008)

  • A person commits an offence if they have made any declaration or representation knowing it to be false or misleading in a material particular for the purpose of obtaining authorisation or the grant of QFE status.

Criminal Liability for Obstructing Exercise of Powers (Section 61 Financial Markets Authority Act 2011)

  • Every person commits an offence if they refuse or fail to comply with a notice under section 25, provide false information, resist, obstruct, or delay a person acting under a warrant issued under section 29, or deceive the FMA.

Regulatory Bodies in New Zealand

The Serious Fraud Office (SFO) and the Financial Markets Authority (FMA) play crucial roles in investigating and prosecuting breaches of financial markets legislation. The SFO operates three investigative teams and has two sets of investigative powers, while the FMA is an independent Crown entity with a primary statutory function to investigate and prosecute breaches of financial markets legislation.

Conclusion

This article provides an overview of key sections from the New Zealand legal code related to corporate fraud, false accounting, and the roles and functions of regulatory bodies in New Zealand. It highlights the importance of compliance with financial markets legislation and the consequences of non-compliance.