Whistleblower Harry Markopolos was bang-on when he said the main focus of the United States securities market watchdog was to "mindlessly check to see if registered firms' paperwork is in order and complies with the law as written."

Markopolos was talking about the decade-long frustration he experienced trying to get the US Securities and Exchanges Commission (SEC) to heed his warnings about Bernie L. Madoff - the man who orchestrated the biggest Ponzi scheme in history.

But he might just as well have been talking about NZ's own Securities Commission judging by the latest limp-wristed press statement issued under chairwoman Jane Diplock's pen which warns directors about the transparency of recent financial statements.

Some of NZ's most prominent companies - such as PGG Wrightson and South Canterbury Finance - are deservedly facing media scrutiny over their related-party transactions and prior prospectus commitments.

PGG Wrightson did not even bother to disclose its new cornerstone shareholder Agria Corporation faces four class actions in the US in relation to its initial public offering in 2007. Journalists dug this crucial fact out.

In South Canterbury's case, it registered a new prospectus yesterday inviting investors to put cash into the company with the benefit of a Crown guarantee under the Government's retail deposit guarantee scheme. Much of the public questioning over the complex arrangements behind chairman Allan Hubbard's web of inter-linking companies has come from media in recent months. It was instructive that the press release announcing the move came well before a copy of the prospectus with all the underlying details was put on the website at 6pm yesterday. (SCF's minders are dab hands at exploiting tight media deadlines).

Despite the biggest financial bust in two decades which wiped squillions off the value of shareholders' investments worldwide and exposed a lot of shonky practices, Diplock's commission seems to be focused on using its "surveillance cycle" exercises to educate companies about the greater compliance standards they now have to meet under (NZ) International Financial Reporting Standards instead of publicly throwing the book at delinquents.

The commission subjected 20 companies to its latest surveillance exercise. It found a widespread lack of transparency. The commission noted it was "particularly concerned" over the lack of transparency around the under-lying assumptions used to value assets, disclosures over third-party transactions and the composition of unexplained expenses.

Six companies have received "please explain" letters over their related party transactions. But if past practice is anything to go by Diplock will be easily satisfied with a promise by the companies concerned to clarify or make the necessary disclosures in their next set of financial statements.

Five companies have also been asked to revise their financial statements to be more "transparent in future" about the level of unexplained expenses in their statements.

It is a fat lot of good requiring the companies to lift their game next time round. At the very least Diplock should name the companies so that investors can make their own judgments and require the affected companies to reissue any defective statements.

The problem is when Diplock first crossed the Tasman to take up her role as the commission's first executive chairperson she was scathing over the "old boys club" that presided over the NZ market.

Six years on, she has become part of the club herself: "Duchessed" as they would say in Australia. Many who took part in the recent stakeholder audit of the commission recommended Diplock should kick herself upstairs and bring in a chief executive to run the shop. But that's yet to happen.

Diplock was in denial mode again yesterday - isolating the "lack of political will" to regulate - as a contributing factor to the financial markets crash. But what's the point of the Government introducing more legislation when Diplock won't use the weapons she already has in her arsenal to ensure a more transparent sharemarket.

As Markopolos would say: "There's no point in a watchdog that won't bark."