Executives from the last of the failed finance companies have gone on trial, more than six years after the firms' collapse.
Four executives from Viaduct Capital and Mutual Finance were in the High Court in Auckland today charged with theft in a special relationship and making false statements, which left 550 investors $25 million out of pocket.
Since 2006, 51 finance companies have either gone into liquidation, receivership or frozen payments, losing billions of dollars of investors' money and sparking massive reforms of the industry.
The Financial Markets Authority has brought 10 criminal prosecutions involving 19 finance companies. Nine of the prosecutions resulted in convictions for all directors charged.
All up some 37 executives associated with finance companies were prosecuted and convicted and either served time in jail, received home detention, or community service for their wrongdoing.
A further 36 cases were either referred to another regulator, dropped because of insufficient evidence, were too costly to pursue or were settled out of court.
Sensible Sentencing Trust spokesperson Garth McVicar said many investors felt that was not enough.
"I don't think they've been brought to account at all, and then you'll normally see as they go through the justice system they'll be treated as leniently as they possibly can be," he said.
Some former executives only served a third of their sentence or were granted parole the first time it came up, he said.
Some cases took years to get to court due to their complex nature and the sheer number of them.
Financial advice website Interest.co.nz editor Gareth Vaughan estimated around 200,000 investors were still owed about $3b.
Some had missed out on justice entirely, he said.
"The typical investor in a lot of these finance companies were elderly," he said.
"If you're brutally honest about it and look at how it's taken a decade to take some of these cases to court, you have to wonder in some cases whether some of those elderly investors are even still alive.
"It's a classic case of justice delayed can be justice denied."
The collapses led to an overhaul of the finance company industry, laws, and the creation of new regulator the Financial Markets Authority (FMA) in 2011.
FMA chief executive Rob Everett said many of the cases were very complex, often involving multiple defendants and unreliable data.
The sheer number of cases clogged up the courts, he said, but valuable lessons had been learned and investors were now better protected than ever.
The regulatory position before the global financial crisis that led to the collapse of so many finance companies, compared to now, was like "night and day", he said.
"The Reserve Bank licenses finance companies directly, you have the Financial Markets Conduct Act that the FMA operates under that focuses on disclosure, governance and we have a lot more powers at the FMA than our predecessor, the Securities Commission," he said.
A partner at law firm Chapman Tripp, Geof Shirtcliffe said the beefed-up regulations were more sensible and directors that broke the law were now more likely to face legal action.
"Directors in our experience aren't as terrified as they were of potential criminal liabilities.
"On the other hand there is a more realistic prospect of civil liability because of the change in the focus," he said.
Financial adviser and Good Returns.co.nz editor Philip Macalister said investors who lost money in finance company collapses needed to shoulder some of the responsibility.
"Investors were greedy. They were just chasing the highest returns they could get and they weren't doing a lot of due diligence.
"If you looked at some of those finance companies and you looked at the track record of some of the directors you wouldn't actually go near them," he said.
The final part of the Financial Markets Conduct Act introduced three years ago comes into effect in December.
It will require all investment funds, including Kiwisaver operators, to be fully licensed.