Unemployed Timaru financial adviser Neville Cant has been found guilty of two charges under the Securities Act.
Cant had pleaded not guilty to offering and allotting securities related to the Gables Proportionate Ownership Scheme to members of the public without a prospectus or an offerer’s statement. Two companies of which he is a director, Investment Management (IML) and Combined Financial Services, both faced the same charges.
Following a three-and-a-half day hearing in the Timaru District Court, Judge Paul Kellar found all six charges proven against Cant and the companies yesterday.
The problems with the investment offer began in early 2006 when the Securities Commission decided the information supplied to prospective investors did not comply with the Securities Act. Cant and fellow director Rhys Morgan contacted a lawyer who rewrote the documentation.
Those documents were not completed until less than 24 hours before the settlement date for the purchase of a $2.5 million Auckland property at the centre of the investment deal, May 23.
While Cant had told the court he visited 14 of the 15 investors over a 24-hour period beginning on May 22, taking the offerer’s statement to them, Judge Kellar found he had not.
He could not exclude that Cant had gone to Christchurch on May 22 as he told the court, but the judge said it did not make sense that one investor faxed an application form to Cant’s Timaru office around 1pm the following day, if Cant had met the man the night before, given him an offerer’s statement and had him fill out an application form, which Cant claimed he took away with him.
The judge did not accept that the South Canterbury and North Otago investors had received the offerer’s statements on May 23 as Cant claimed.
Cant’s phone records showed only two calls to investors on May 23. He did not accept the others had called Cant to set up appointments for that day.
If investors had time to review the offerer’s statement they would have seen the investment was different from the scheme they had earlier been asked to invest in, as it did not contain a share component, which would have altered the returns. If he did deliver the statements, then Cant had not drawn the change to their attention, the judge said.
He accepted Cant was under immense pressure to have the deal go through but it was not enough to say he could not comply with the legislation because he ran out of time.
A nominal sentencing date of May 11 was set, although the judge indicated sentencing might occur in Oamaru. Herald Staff
Art lovers are being warned not to be fooled by two Israeli tourists selling watercolours door-to-door in Christchurch for $250.
The paintings are made in China and available via the internet for a fraction of this price, police warn.
Lyttelton detective Michael Ford said the man and woman arrived in the country on tourist visas on February 26 and had been driving a Toyota Prius licence plate YF4903 and knocking on doors on Mt Pleasant’s Major Hornbrook Drive.
Ford said immigration officials were also keen to find the couple as they were breaching the conditions of their tourist visa.
Hey, do you have a Twitter account? Have you ever noticed those messages in which people tell you where they are? Pretty annoying, eh. Well, they’re actually also potentially pretty dangerous. We’re about to tell you why.
Don’t get us wrong, we love the whole location-aware thing. The information is very interesting and can be used to create some pretty awesome applications. However, the way in which people are stimulated to participate in sharing this information, is less awesome. Services like Foursquare allow you to fulfill some primeval urge to colonize the planet. A part of that is letting everyone know you own that specific spot. You get to tell where you are and if you’re there first, it’s yours. O, and of course there’s badges..
Foursquare
The danger is publicly telling people where you are. This is because it leaves one place you’re definitely not… home. So here we are; on one end we’re leaving lights on when we’re going on a holiday, and on the other we’re telling everybody on the internet we’re not home. It gets even worse if you have “friends” who want to colonize your house. That means they have to enter your address, to tell everyone where they are. Your address.. on the internet.. Now you know what to do when people reach for their phone as soon as they enter your home. That’s right, slap them across the face.
The goal of this website is to raise some awareness on this issue and have people think about how they use services like Foursquare, Brightkite, Google Buzz etc. Because all this site is, is a dressed up Twitter search page. Everybody can get this information
Identity crime is on the rise as criminals become cyber savvy and fish around on social networking sites for personal information, experts say.
Already the cost of identity crime is put at up to $200 million a year in New Zealand. Facebook, Bebo and Twitter continue to gain popularity but having weak passwords and posting personal information make the sites easy prey for criminals.
Privacy Commissioner Marie Shroff said recent reports suggested a huge increase in social networking sites being used for identity fraud. If someone got enough personal information, including your name, address, date of birth, bank account number or employment details, they could apply for a credit card or loan in your name, she said. “Your personal information has value – don’t let someone else profit from it.”
Internal Affairs said identity crime was increasingly used to facilitate other crime.
Identity crime – including creating a false identity with fictitious data and counterfeit documents, stealing the identity of another person or colluding with someone to get access to their data or documents – is believed to cost between $132m to $200m to the economy annually.
Detective Sergeant John van den Heuvel, of the National Cyber Crime Centre, said people freely posted information on the internet – from their date of birth, pets names, where they worked and what they did. Often security settings were not activated.
“It’s a huge amount of personal information you wouldn’t stop and give to the person on the street.” Criminals could pose as a friend of a friend and become accepted into the inner circle, sending scam emails for money or gathering details.
“It’s clear that criminals do `fish’ these social networking sites to gain evidence,” he said. “They can monitor your activity if you’re sending out tweets when you’re not home or excited about your overseas holiday. Who are you telling this too?”
Sites could be hacked because of weak passwords.
Green MP Sue Bradford’s Twitter account was hacked last year with messages posted about her sex life; she has since changed her password.
Dutch website PleaseRobMe.com was started last month highlighting the danger of sharing too much information and how vulnerable people can be to burglars. It lists “recent empty homes” showing tweets from people broadcasting where they are.
Business Ethics Speaker Chuck Galagher (a former fraudster) makes some interesting comments on a recent article in which the experts comment on why white collar crime is hard to deter.
How do companies deter White Collar Crime?
With media reports filled with stories of “white collar crime” such as the developing Koss embezzlement story and the on-going reports related to Allen Stanford and recently sentenced Bernie Madoff, it’s no wonder that organizations are seeking to find deterrents to this seemingly growing phenomenon.
As I prepare to address a group in just hours, I came across this article in the Charleston Regional Business Journal and it struck me – “We’re going about this all wrong!” But, before I suggest what’s right let’s look at excerpts from the article featured below. The whole article is here:
Law school panelists: White collar crime hard to deter
Crime pays, at least if you’re a midlevel executive wearing a white collar.
Panelists at a symposium on crime and punishment said that fraudsters find the risk of being caught typically worth the potential reward for all but the most top-level executives.
Using Enron and WorldCom, along with more recent financial fraud, as examples, the panelists — a federal prosecutor, a CPA and a former Securities and Exchange Commission official — said deterring white collar crime is difficult, partly because criminals are typically caught after years of high living and typically only the top executives receive the harshest penalties.
COMMENT #1: The first problem I see is that none of the panelists have any background as a criminal. Each represent a segment of society that intellectually is connected with and perhaps understands “white collar crime”, but none are “white collar criminals.” Therefore, they see things from their perspective but have no practical experience in showing others how to deter crime. See the list below and then ask yourself, how could any of these folks really identify with the commission of a crime and therefore how to prevent it?
There is a saying that goes something like: “once a thief always a thief.” It is with this piece of ‘common knowledge’ or ‘common wisdom’ in mind that ex-convicts have found themselves having a hard time reintegrating in society after having done their time. There may be a little light at the end of the tunnel now in terms of employ-ability for ex-convicts after a study dine by Carnegie Mellon University.
ScienceDaily (May 27, 2009) — Carnegie Mellon University researchers have created a model for providing empirical evidence on when an ex-convict has been “clean” long enough to be considered “redeemed” for employment purposes.
The new study, which appears in the current issue of Criminology, estimates that after five years of staying clean an individual with a criminal record is of no greater risk of committing another crime than other individuals of the same age. The research comes at a time when President Barack Obama’s crime agenda includes breaking down employment barriers for people who have a prior criminal record, but who have stayed clean since their earlier offense.
“In the past, employers had no way of knowing when it might be safe to look past a criminal record,” said Alfred Blumstein, co-author of the study and the J. Erik Jonsson University Professor of Urban Systems and Operations Research at Carnegie Mellon’s H. John Heinz III College. “Hiring an ex-offender was a totally arbitrary decision. We believe our model can change that and help provide employers with data in making such decisions. Or it can be used by state criminal-record repositories in deciding when a prior arrest is too ‘stale’ to warrant distributing.” Blumstein’s co-author is Kiminori Nakamura, a Ph.D. student at the Heinz College.
The issue of employing ex-offenders has become more of a problem, as a vast majority of larger U.S. employers now perform criminal background checks, Blumstein said. He noted that advances in information technology allow criminal records to be kept longer and to be distributed easily, and employers are concerned about liability risk if the former offender commits a new crime. Blumstein said this makes it difficult for a large number of people who have committed crimes when they were much younger, but have stayed clean since then.
The study, funded by The National Institute of Justice, used criminal-history records of more than 88,000 first-time offenders in New York in 1980. Most committed new crimes within the first few years after their initial arrest, but only a small minority had a new arrest after staying clean for at least five years. After determining whether the offenders had remained clean during the ensuing 25 years, the data on the 1980 offenders was compared against two comparison groups. The study determined that after about five years those in the offender group were at or below the risk of arrest as people in the general population who were the same age. A more demanding comparison is with people of the same age who had never been arrested. Those with a prior record had to stay clean longer, but their risk could be close enough even to that low-risk group.
Future studies will address other states and sampling years to assess the consistency of results. This effort is intended to develop standards for employers and record repositories to help reduce the handicaps imposed on those who had committed a crime when they were younger.
ADDITIONAL THOUGHTS: THE RELATIVITY OF BACKGROUND CHECKS
It cannot be denied that that this study may be of great importance for those that make their hiring decisions in part on the basis of background checks. Personally I believe that everyone deserves a second chance. But that is not the issue here. The background checks tell us nothing about the “shoulds.” While the second chance option remains open at all times it is good for any employer to have a complete picture when a hiring decision is being made. It is important if you give someone a second, third or more chance that you are actually aware that you are doing just that. That is where background checks come in: they form part of the risk considerations and in nowadays litigious climate.
At the same time look at what has been happening in the past year: one after the other big fraudster has been discovered, and I doubt when we look at these high profile fraudsters that we would have found anything troublesome in the pasts of these fraudsters. Madoff did not as far as known have a criminal record prior to the discovery of his ponzi of the century, and the same applies for the many mortgage fraudsters, insurance fraudster, top managers gone bad, politicians abusing their expense accounts: one by one respectable people who for one reason after another have crossed the line without a criminal past. While the past may provide you some indication about the future, based on the “common wisdom” argument, it is good to understand that more and more we will need to monitor the here and now, the risk of good people going bad as I cannot help but thinking that that is where the greatest risk comes from.
Guide for disclosure of credit ratings by non-bank deposit takers
The Securities Commission today issued interim guidance for non-bank deposit takers (NBDTs) on disclosure of credit ratings. Mandatory credit rating requirements for NBDTs come into effect on 1 March.
The Commission has provided this guidance pending the introduction of new credit rating disclosure regulations being prepared by the Ministry of Economic Development. The guidance note sets out the Commission’s enforcement approach to disclosure of credit ratings for the period until regulations come into force.
“Credit ratings are important to help investors to assess the risks of an investment. Deposit takers must ensure that they give investors clear information about their credit ratings and what those ratings mean, and that references to credit ratings are not likely to mislead or confuse”, Commission Chairman Jane Diplock says
The Securities Commission has information for investors about credit ratings and what they mean on its website, www.looklearninvest.org.nz.
The new credit rating requirements for non-bank deposit takers under the Reserve Bank of New Zealand Act 1989 come into force on 1 March 2010. From that date all deposit takers must have a credit rating, or be exempted from this requirement by the Reserve Bank.
Under changes to the Reserve Bank Act made in 2008, the Reserve Bank became the prudential regulator of NBDTs. The Securities Commission has responsibility for the enforcement of deposit takers’ disclosure requirements under the Securities Act 1978.
The Securities Commission warns people who have been invited to invest in Inertialess Drive ZPE (2010) Limited that its share offer is illegal.
The Securities Commission has banned a document offering shares in Inertialess Drive ZPE (2010) Limited. The offer is illegal because no prospectus has been registered, and there is no investment statement.
The company is based in Mount Maunganui and Ken Pedlar is its sole director and shareholder.
“In New Zealand, most offers of investments must have a registered prospectus and an investment statement,” the Commission’s Chairman Jane Diplock says. “These documents are important to allow people to make an informed decision about investing.”
The Commission understands that offer documents were sent to people who responded to advertisements by the company in the Bay of Plenty Times in December 2009.
The Commission warns people about buying securities that do not have the required offer documents.
“Under New Zealand law anyone who has subscribed for securities in offers that are illegal is entitled to have their money refunded,” Jane Diplock says.
The Commission had previously, in 1998, banned advertising for shares by Inertialess Drive Technologies (1995) Limited (now liquidated) because there was no registered prospectus. In 2000 the Commission also banned advertising for shares in Inertialess Drive Corporation Limited for the same reason. Mr Pedlar was involved in both these companies. The advertisements in the Bay of Plenty Times are targeted at former shareholders of these companies.
Huljich KiwiSaver Fund withdraws investment statement
The Securities Commission has been advised that Huljich Wealth Management (New Zealand) Limited has voluntarily withdrawn its current investment statement for the Huljich KiwiSaver Fund after Commission staff expressed concerns about reporting of historical investment returns.
The Commission understands that Huljich is preparing a new prospectus and investment statement. Pending the availability of the new offer documents, applications for membership are being held by the trustee, Trustees Executors Superannuation Limited, and will not be processed until the updated investment statement has been distributed to applicants.
The Commission welcomes these moves by Huljich, and is seeking further information on certain transactions that have been undertaken by the fund, and on the disclosure of income arising from these transactions. Huljich is cooperating with the Commission’s inquiries.
At this stage there is no indication that investors have lost any money as a result of these disclosure issues. The Commission is looking into whether certain income that was received by the fund was incorrectly reported as investment income in the presentation of historical investment returns for the fund.
The Commission’s inquiries are continuing and it has no further comment at this time.
It seems the bad guys never take a break. A new report shows that identity theft last year ratcheted higher in 2009 at a rate much faster than the growth of the economy or the pace of inflation.
The 2010 Identity Fraud Survey Report, issued by Javelin Strategy and Research, found that 11.1 million adults were victims of identity fraud last year, an increase of 12 percent. And, the total amount of the fraud grew by 12.5 percent to $54 billion.
“Whenever our nation has faced a difficult time, thieves have found a way to use the problem to their advantage. In my adult life, I’ve never seen more variations of old scams and the degree of sophistication in newer scams,” said Robert Siliciano of the San Diego-based Identity Theft Resource Center.
That includes such classics as stealing credit cards or numbers and dumpster diving for financial statements. And, now scamsters are using tools like Craigslist to sell bogus products and capturing credit card numbers of other personal information.
It was once thought that identity theft involved illegal access to bank accounts and other financial assets. However, the Federal Trade Commission says that tough times lead to other uses for stolen identity.
“For instance, thieves can steal identities to gain employment, immigrate into this country, and evade law enforcement. Medical identity theft also has received attention in recent months.
“It occurs when a thief uses the name or insurance information of another person to obtain medical care. As a result, not only are medical identity theft victims charged for the services they did not incur, but even more importantly, their medical records may be corrupted, thus compromising their care in potentially life threatening ways,” said Betsy Broder, assistant director at the FTC.
Just as medical ID theft increases during tough times, the same can be said on scams targeted toward people trying to find jobs. The Better Business Bureau warns job hunters to be extremely cautious in their search for work because scammers are out to take advantage of them and make a fast buck.
Foursquare
