Tighter laws sought on finance firms

Press, 27 August 1977, Page 11

Tighter laws sought on finance firms

PA Wellington Adequate legislation on the securities industry and on financial advertising could have led to the earlier discovery of the difficulties of the Securitibank group, and significantly reduced losses to the public, according to the annual report of the Justice Department, tabled in Parliament. The Secretary of Justice (Mr G. S. Orr'i says in the report that the lack of adequate regulation of the securities industry, covering all financial intermediaries, has tended over the years to encourage the creation of unusual enterprises. Mr Orr said it would be well to remember that no acceptable legislation could be a panacea, and that the law could and should not try to prevent impudent investments, or unorthodox and chancy enterprises. In any capitalist economy high rewards and high risks

i went together, he said. K “Nonetheless, in the face ' of recent events, responsible ! business organisations are 1 supporting and even demandi ing a greater degree of legal 1 regulation of suspect busi-l ‘ ness practices.” , He suggested that the in- 1 . troduction of financial adver-' , tising and group insolvency legislation by the Govern- > ment later this year must be > a prelude to a systematic pro- ' gramme of commercial law > reform. The collapse of Securiti- ’ bank — on the heels of the j Cornish. Circuit, Perpetual . Trustees. Gemco and Mark Craig failures — has brought 2 present commercial law into j focus, he says. 1 Many who had been pre- • viously lukewarm towards / changes in the law had joined - a growing chorus of demands 1 for comprehensive and effective legislation, particularly / in financial advertising and s securities legislation.