ON TUESDAY, when 49 year old Mark Synnott was sentenced to four years and three months, he became the first company director in the State to be jailed for fraudulent trading.
It was a clear victory for the official liquidator, Desmond Guilfoyle, and the gardai who had worked in tandem to bring about the conviction.
It proved that though fraudsters will always be with us, amendments to the Companies Act in 1990 have ensured that white collar criminals are no longer impervious to the law and that fraudulent trading is a criminal offence.
According to practitioners in this area, the onus has now shifted to the defendant to prove he has behaved responsibly. Since Mark Synnott began his downward spiral to Mountjoy, other legislation has come into force, notably the 1995 Investors Intermediaries Act.
This decreed that all investor intermediaries must receive authorisation (which allows for close investigation to begin with) and then come under the supervision of either the Central Bank or the Department of Enterprise and Employment.
These bodies have been granted broad, general powers under the Act covering areas such as control of advertising, codes of conduct, rules on client money and investment instruments, and the appointment of inspectors where required. They must also provide for a register of investor intermediaries.
The Act also makes bonding for intermediaries mandatory, to a minimum of £50,000 in the first year. Thereafter, the bond will be £50,000 or 25 per cent of monies coming under the firm's control. It also makes it obligatory for auditors to intermediaries to report the latter to the supervisory authority where there appear to be irregularities regarding investors' funds (a provision which, if in force in the 1980s, might have saved the Synnott investors).
Finally, should a director manage to circumvent these controls and misbehave sufficiently to lead to a conviction by the High Court, he could face a fine of up to £1 million and 10 years in jail.
Having considered all this, many investors might well be feeling more secure. But they might also bear in mind the words of liquidator, Desmond Guilfoyle "If it looks too good to be true, then it probably is ...