Parliamentary Secretary to the Treasurer
27 November 2001 - 6 October 2003
GOVERNMENT TO CRACK DOWN ON "BOTTOM-FEEDER" SHARE DEALERS
The Parliamentary Secretary to the Treasurer, Senator Ian Campbell, said today the Government would tighten the law to prevent "bottom-feeder" share dealers from preying on ill-informed small shareholders.
He said he planned to introduce legislation making it compulsory for any dealer offering to buy shares to state the current market value of those shares.
"The practice of exploiting the share market ignorance of small shareholders - usually those who have acquired shares when institutions have demutualised - by not telling them the current value of their shares is a rort," Senator Campbell said.
"These operators are preying on people who have little or no idea of the sharemarket. They are often former insurance policy holders who received script when their insurance company listed on the stock exchange and simply don't keep watch of its value.
"It is not proposed to ban the buying and selling of shares through self-dealing, but to ensure that prospective sellers in this section of the market are aware of the true value of their shares when an offer is made."
Senator Campbell said anyone who received an offer and was unsure of the value of their shares should consult a stockbroker, licensed financial adviser or check the stock exchange prices in newspapers.
"I would urge people to follow the same rules as if they were selling their house or car - make sure they know what they are worth on the market. Invest some time to establish what your assets are worth."
Senator Campbell said Treasury and Australian Securities and Investments Commission staff were finalising the proposed legislative changes. He expected to introduce them into the Parliament in the autumn session.
He said operators such as National Exchange, a private company held by Mr David Tweed, of West Melbourne, had become more active in the market since the introduction of the Financial Services Reform Act in March last year.
"There is a loophole in the law as it stands and we will close it," Senator Campbell said
10 January 03
Contact: Wayne Grant 08 9421 1755 or 0407 845 280