- 3.
Friday, September 28, 1973
1
The Investors Bill seeks to provide greater protection to the
investing public by making it an offence for anyone to induce investors
through fraudulent and reckless means, to trade in securities or to
take part in money-making schemes involving securities and other property.
A maximum penalty of a $1 million fine and seven years' imprisonmont
is prescribed for this offence.
Advertisements which invite the public to participate in property
schemes are also banned, and it will be an offence for a person to have
in his possession a document containing such an advertisement, if he
intends to use it.
People convicted on indictment for contravening the provision
about advertising will be liable to a fine of $500,000 and imprisonment
for three years.
These provisions are based mostly on the United Kingdom Prevention
of Fraud (Investments) Act of 1958.
Advertisement is widely defined, but the bill lists a number
of exemptions, including the issue of prospectuses of companies, unit
trusts and mutual funds, advertisements containing offers to the public
made by registered dealers in securities, or by persons who buy and sell
property other than securities in the course of their business.
Under the bill, it will also be an offence to advertise that a
person is prepared to give investment advice or manage a portfolio for
payment, unless he is properly registered. It will not be an offence, however,
if there is no payment for the services.
/Commenting