Fidelity Cover - Do not rely on it

You cannot rely on that Fidelity Guarantee policy

A huge corporate collapse from an electrical retailer and on investigation, it turns out a former senior accountant has now pleaded guilty to stealing nearly $20 million from collapsed firm Clive Peeters. Thirty-nine-year-old Sonya Causer, from Lilydale, bought 44 properties, luxury cars and $17,000 worth of jewellery over an 18-month spending spree. The court heard she falsified payroll records over a two-year period while working as a senior accountant for the whitegoods firm. The Crown argued the fraud was a contributing factor to Clive Peeters' collapse in May.

The company's administrators have managed to recoup about $16 million of the stolen money. Causer's lawyer told the court she was totally overwhelmed and terrified by her own actions. The lawyer said Causer was mortified when she learnt the total amount she had stolen. He argued she started stealing to escape the pressures of looking after two autistic children and a "virtually unemployable" husband. The court heard she became obsessed with buying and selling real estate and always thought she would make enough money to pay Clive Peeters back. She has pleaded guilty to 24 counts of theft.

End of the matter? WHAT THE HELL WERE THE DIRECTORS DOING FOR THIS AMOUNT TO PILE UP TO SUCH A HUGE AMOUNT?

If I owned shares in that business, I would have lost everything, so I would be suing the Directors for a breach of fiduciary duty and a breach of their duty of care owed to me as a part owner of the business wholly reliant on their good governance which has lead to this collapse.

You need good systems in place to prevent this unauthorised access to the company funds. We find it hard to get a company to take out a $500,000 Fidelity cover let alone could you envisage an insurer willing to provide a $20,000,000 cover?

Watch this space.

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