2006–2012 New Zealand finance company collapses

[3] In the years following the beginning of the collapses, sweeping legislative and regulatory changes were made, aimed at improving oversight and regulation of the finance industry.

Molloy, in a stinging tirade, wrote to the Commerce Select Committee during its inquiry into finance company collapses, stating:The recent destruction of wealth by the finance company and investment product industry was the inevitable consequence of a failure to read the signs that were there for anyone to see: at least three decades of unreadiness, unwillingness, and inability, on the part of regulators, enforcers, courts, lawyers, and accountants, to fulfil their respective functions with integrity.

[8]Law Professor Julie Cassidy believed that part of the cause of this was that policing of directors' duties was, "governed by a regime that is weak in terms of both standards of conduct and review and penalties.

Undisclosed related party transactions of more than $1 million were made to firms owned by Trevor Ludlow of National Finance 2000.

The 2007–2008 financial crisis had a flow on effect in the New Zealand economy causing a downturn in the property market and precipitating a credit crunch.

These macro-economic factors and subsequent "run on the funds" sparked the collapse of most of the finance companies; Credit began to tighten in the market and loan defaults became more common.

This brought down the first 3 finance companies – National, Provincial and Western Bay – because of their lax credit- risk management (RBNZ, 2006).

[12]Reserve Bank Governor Alan Bollard would reflect that:At the end of 2006 and in early 2007, we started to hear about property finance companies in trouble.

[13]In the wake of the company failures there were numerous reports in the New Zealand news media of retirees who had lost their life savings.

[23] However, in the criminal case against three former officers of South Canterbury Finance the SFO achieved only five convictions as a result of eighteen charges prosecuted before the Timaru High Court.

[24] Immediately after the failure to secure convictions, the SFO faced criticism that they had not called the former Treasury Secretary John Whitehead to give evidence.

[26] Alongside criminal prosecutions, the Financial Markets Authority (FMA) and the receivers of the failed finance firms often pursued civil actions to recoup investor losses.

[29] Civil action by the FMA and the receivers of Strategic Finance against the company's directors and auditors for breaches of the Securities Act, such as making false statements, were settled for $22 million in August 2014.

[33] In response to the collapses the New Zealand government carried out a wide range of law and regulatory reforms of the finance industry.