New Zealand's market watchdog has confirmed it won't take any action following an inquiry into South Canterbury Finance.

The Financial Markets Authority, however, noted this morning that Crown Asset Management had taken action against South Canterbury Finance directors for "failing to comply with their duties".

Crown Asset Management, which was formed in 2012 to acquire assets of some failed finance companies whose investors were paid out under the Government's retail deposit guarantee scheme, declined this week to name the directors it has targeted.

It confirmed that statements of claim and defence had been filed in the High Court at Christchurch.

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The FMA lined up to support the Serious Fraud Office when it laid charges against five men associated with the failed Timaru firm in December 2011.

That case saw only one man - director Edward Sullivan - found guilty. He was sentenced last week to 12 months' home detention.

When the SFO laid charges in December 2011, then-FMA chief executive Sean Hughes said it was examining avenues to take civil proceedings to recover some of the money paid to SCF investors under the Crown retail deposit guarantee scheme.

While the watchdog's inquiry remained live after the verdicts in the SFO case, the regulator said this morning this was now closed and no action would be taken.

FMA director of enforcement Belinda Moffat says the regulator looked into whether the finance company had met its continuous disclosure obligations, and the respective roles of the trustee and the auditor.

The regulator did not find evidence that would justify the costs of taking action and recoveries for investors or the taxpayer from any of its potential proceedings were unlikely, she said.

"The FMA has made the decision to close these inquiries after very careful consideration of our responsibility to act in the best interests of the public. This decision does not diminish in any way the losses suffered by investors, taxpayers or preference shareholders, many of whom will continue to feel the ramifications of the collapse of SCF for years to come," Moffat said.

Because of South Canterbury Finance's participation in the retail deposit guarantee scheme, 35,000 investors were bailed out by the taxpayer to the tune of $1.6 billion when the company collapsed - of which $800 million has been recovered from other parties.

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While debenture and stock holders were covered by the scheme, investors who held preference shares in SCF were not covered. These shares were worth $100 million when issued in 2006, but their value had fallen to $15 million by 2010.