Joint meeting with ASIC The Commission has signed an updated Memorandum of Understanding (MOU) with the Australian Securities and Investments Commission (ASIC). The new MOU reflects recent changes to the regulatory functions of both agencies and allows for cooperation and the smooth exchange of information to assist each regulator, particularly on enforcement matters. The MOU was signed at the third formal meeting of the two Commissions in Sydney in August. "These meetings are enormously useful in developing our relationship," Chairman Jane Diplock said. "We regard them as part of our work towards a single economic market that will benefit business and investors on both sides of the Tasman." New Zealand and Australia are part of a global securities market that offers new prospects for issuers and investors, but also provides more opportunities for cross border fraud. "Collaboration by regulators is increasingly vital to maintain well- ASIC Chairman Jeff Lucy and Chairman Jane Diplock after signing the new MOU between the two Commissions. regulated markets where securities law is effectively enforced," ASIC Chairman Jeff Lucy said. "The close proximity of our two countries provides excellent opportunities for us to work together to continue to make the Australasian markets attractive to investors."		Why we sued the company (continued from page 1) The Court action sought compensation for the investors who suffered this loss. Because the trading was done by the company the Commission sued the company. This is much the same as in any criminal law situation where a company is prosecuted for breaking the law (such as health and safety laws where an employee is injured), even though the company only acts at the direction of managers or the board. Where directors of any company place that company in a position where it has to pay a penalty or fine then the directors are accountable to shareholders for their decisions. Similarly if a company incurs legal costs the shareholders can ask questions of the directors about how those costs were incurred. The Commission is responsible for enforcing insider trading laws. If the Commission did not act when the trading was undertaken by a company it would be easier to evade these laws. As well as suing the company the Commission also sued the directors.
	Messages received - telephone share scams People are heeding the Commission´s message that share deals offered by overseas telephone callers are frauds. A recent campaign to alert people to these scams brought a surge of reports of these callers to the Commission. "The positive factor is that people are contacting us before they send any more money," Director of Enforcement Norman Miller said. "Hopefully, after talking to us they decide not to send good money after bad." The downside is that these overseas callers are still busily at work attempting to con New Zealanders. The current scam is follow up calls to people who bought shares several years ago, which turned out to be worthless. Now the caller offers to help them recoup their money in various ingenious ways. "These calls are part of the original scam," Norman Miller said. "Sooner or later the victim will be required to send more money, and they will not get any money back." Visits to the Commission´s website list of fraudulent companies who have contacted New Zealanders with dodgy share deals also increased during the June-July campaign. There are now 183 companies named on the list. The fraudsters change their names often to avoid detection. If a name is not on the website it does not mean that the caller is genuine. We again warn people not to do business with people from overseas who call out of the blue with share deals. Hang up on these callers.

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THE BULLETIN October 2005

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