Speaking at the Institute of Financial Advisers Financial Awareness Week breakfast yesterday, Diplock said the commission can not and should not prevent companies failing, despite media commentators suggesting it was the commission's fault that finance companies had failed.

"This is nonsense," she said.

"Fundamentally companies that have bad business models and poor governance should fail."

However, many more charges are in the pipeline as the commission "energetically" pursues finance company directors who misled clients, she said. Where misleading prospectuses were used, the directors who signed them needed to be brought to book. The commission had already laid over 160 charges in this regard with "many, many more to come", she said.

A previous lack of requirements around maintaining capital buffers, as well as the fact trustees, auditors and financial advisers were unregulated, helped create the potential for finance company failure.

"In a way it was the perfect storm because opportunistic people could start a finance company and take money from the public with no capital buffer. Financial advisers who didn't necessarily understand the products could advise people to go into it, the trustees would not necessarily monitor the investment through the life of the product and the auditors - there was no real regulatory oversight of them except through the profession.

"If you combine all those things together it might give you an idea as to why finance companies didn't necessarily succeed," Diplock said.