Written by Condon Associates on 27 August 2010

This week it has finally been announced that charges have been laid against the most prominent of the rogues within the industry in respect to his conduct as a registered liquidator and trustee.

Some time ago I had contact with another practitioner that had been charged for the misappropriation of funds placed under his control.  In that situation, which mind you cannot be sanctioned in any way, he had been left carrying the resultant financial responsibilities when his non insolvency partners sought to resolve partnership financial problems by way of Part X Arrangements under the Bankruptcy Act.  This left him solely and hopelessly exposed, alas, with no real legitimate solution that offered adequate protection, his resolution ultimately came from funds held by him in trust for others.  Again it does not endorse the action, but the amount involved in that matter pails into insignificance in comparison to the one that ASIC is currently dealing with.

When reality struck the practitioner made his own admissions to ASIC and laid bare all relevant details to his misdeeds.  He effectively produced all of ASIC’s charge and Court documentation for them.  Clearly he demonstrated very capable skills as a forensic accountant.  The result was essentially being instantly suspended, stripped of all his matters, shortly after charged, and ultimately convicted and gaoled for around three years.  Impressive what can be achieved when you confess and fully cooperate.  No wonder the current approach seems to be one of try it and hide it, chances are you’ll succeed.

Unfortunately these are not isolated situations; however, I do agree that it is unlikely the industry is outrightly rampant with fraud.

As an industry we must do more to both improve the way we do things, focus correctly on those who are impacted by what we do and actively work towards improving the law and procedures under which we work.  With this sort of an approach the entire industry just may well be able to impact and change public opinion for the better.

Let us also hope that there is a real equity between the penalties imposed on those who com forward and ‘fess up’ as opposed to those who have quite seriously and deliberately stuck their fingers up in the face of the regulatory system.
 

PLEASE NOTE: All information contained in the articles below was correct at time of publishing.