New insider trading laws needed?
PA Wellington The chairman of the Commerce Commission, Mr C. L Patterson, says the Securities Commission is considering whether insider trading in shares should be made a criminal offence. Mr Patterson said in an address to the Karori Rotary Club that New Zealand had four safeguards against insider trading. First, there was pressure of informed opinion and strength of reputation. Second, there were codes of conduct such as those of the Stock Exchange. Third, there were rules of common law and rules of equity which said that profits obtained in breach of duty could not be kept. Fourth, there were rules of law requiring directors to disclose dealings in their company’s securities. The question was whether these safeguards were enough, and overseas most jurisdictions with developed capital markets had made insider trading a criminal offence. Mr Patterson said the question was being studied by the Securities Commission, which would welcome views on it. Insider trading in shares was now universally disapproved of for four reasons, Mr Patterson said: • Insiders had advantages over outsiders in making an offer or in assessing an offer. • Insider trading Involved the use of trust and confidence for personal gain. •If allowed, insider trading might bring duty and trust into conflict. • Insider trading damaged the securities market if investors come to believe that favourable deals were reserved for a privileged few.
Mr Alan Wilson, the deputy managing director of Alcan New Zealand, Ltd, will take early retirement later this year for health reasons after 30 years employment in the Alcan group. Mr Wilson transferred to New Zealand from Britain in 1961 before the start of the company’s operations at Wiri, Auckland, and was general works manager for 20 years. After retirement, Mr Wilson will continue in a part-time con-, suiting capacity to advise, mainly on corporate, personnel and public relations matters. He will continue as a director of Alcan New Zealand and Rolls Industries NZ, Ltd.
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Press, 23 October 1984, Page 38
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325New insider trading laws needed? Press, 23 October 1984, Page 38
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