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October 2004 Edition ----to page back through Previous Editions click here

Well, well, Mr Bradshaw the Serious Fraud Office chief has come out alleging bias in favour of white collar criminals over rank and file ones. That's quite a change from him but it certainly is in the right direction. Whether he is just responding to the wishes of his political masters as would seem to be his norm is of course hard to tell.

It would be good if Mr Bradshaw changed his very narrow view on what constitutes fraud. He seems to have to be able to detect a flow of funds or property from the victim to the offender. He is not much interested where offenders in professional positions neglect their duty and fudge it to keep their job or keep in with high profile crooks masking as sports heros or the like, and property transfers at inappropriate prices or innocent people get mixed up in business defaults.

That brings us on to the Access Brokerage affair. This sharebroking firm went insolvent and had apparently been teaming and lading for up to 2 years. This is a procedure where one drags the chain on paying out money while seizing upon incoming money as fast as possible so that business continues even although the firm cannot meet its financial obligations.

There are many issues here. Firstly the NZ Society of Accountants used to have special strict procedures for the auditing of Solicitor's Trust Accounts which insured all money was accounted for and no deficiency was hidden by teaming or lading. Brokerage trust accounts would be an obvious candidate to come under this regime and surly would have done so. But it seems the Institute of Chartered Accountants of New Zealand has had nothing to say on this Access Brokerage affair as is its reaction to virtually everything these days.

Then we have the new 24 member panel of the revamped Stock Exchange, known as NZX Discipline. One would have thought that the first action of this panel would be to check that all the broker's trust accounts had had a recent audit. Not so it would even although their are seven ICANZ members on this panel. It perhaps helps the understanding to know that of the seven, two of these accountants, Don Trow and Peter Hays, saw fit to stick up for the Bank of New Zealand in 1993, in the Bank's defence of its fake insurance scheme and other misallocations of bond income to increase the Bank's 1990 reported profit by about $70m.

The Bank of New Zealand is of course associated with the Access Brokerage collapse and it eventually made good the losses of traders which is to its credit. The BNZ is of course under different ownership than in 1990. But it hasn't distanced itself from that era as much as it might. One hopes that its bailout is not going to result in a coverup. Access provided all clients with BNZ bank accounts which were officially in the name of Access or so it was claimed. It should always be checked out what happens in an insolvency when such an innovation evolves.

Another big move in the fight against white collar fraud must now be acknowledged. The Securities Commission has brought Insider Trading charges against some 2002 Tranz Rail staff and directors. The ridiculous sale price of the company's shares at that time has had much mention on this site. But more than insider trading would seem to be involved here. The prices are too preposterous for the buyers to simply have been taken in by failure to disclose or even by a pack of lies. One must be open to the possibility that any lies are but a mask for the operation of bribes and/or blackmail. Many of the buyers were fund managers. The owners of some of these funds are much divorced from and held in contempt by the managers it would seem. Accountants are mixed up in all this and the disclosures should precipitate some downfalls.