Notorious "bottom-feeder" share trader David Tweed has only two weeks left before having to tell shareholders the market value of their shares or face heavy fines or jail.
The Parliamentary Secretary to the Treasurer, Senator Ian Campbell, said today that new legal requirements designed to protect unsophisticated shareholders from selling their shares at big discounts to Mr Tweed's company, National Exchange in West Melbourne, would apply from 8 April.
"David Tweed's time for preying on the market ignorance of thousands of small shareholders is up," Senator Campbell said.
"He has been exploiting a loophole in the law and causing considerable financial and emotional grief mainly to people who have acquired shares when institutions, such as insurance companies, have listed on the stock exchange.
"These people often are not market savvy and don't know what their shares are worth. He's targeted and milked that ignorance.
"Under the new regulations, he will no longer be able to simply offer to buy someone's shares at a certain price without stating the market value of those shares on the day the offer was made.
"If he fails to disclose the market price he personally will face a fine of $22,000 or two years' jail for each breach and his company a maximum fine of $110,000 as well."
Senator Campbell said the new legislation would also give shareholders the added protection of a month in which to accept an offer. Shareholders were now being pressured into accepting offers in shorter periods.
He said the existing loophole would be closed in two ways: a regulation to the Corporations Act requiring Tweed to disclose the current market price or become licensed under the Financial Services Reform Act, followed up by an amendment to the FSR Act requiring licence holders to disclose the same information for off-market offers. The earliest the regulation could be gazetted after consultation with the States was 8 April.
"Mr Tweed has shown himself to be a clever operator when it comes to getting around the law," Senator Campbell said. "We are confident the changes we are now making will give him no option but to disclose if he wants to stay in business."
CANBERRA
26 March 2003
Contact: Wayne Grant 02 6277 3955 or 0407 845280