Insider law slammed

Press, 6 October 1988, Page 28

Insider law slammed

PA Wellington A proposed law against insider trading is so heavyhanded and all-embracing that it would not work, the Business Roundtable said yesterday. Business Roundtable chairman, Sir Ron Trotter, told a select committee studying the Securities Law Reform Bill that the bill was poorly researched and hastily thrown together. The bill was introduced in July amidst a political controversy over corporate crime and insider trading. It would introduce civil laws against insider trading, require disclosure of shareholdings of over 5 per cent held through nominees and introduce selfregulation of the futures market. The Minister of Justice, Mr Palmer, said the bill aimed to eliminate the unfair financial dealings which had made the New Zealand sharemarket

“the last wild west show”. But Mr Trotter said he had not seen any evidence of insider trading occurring or even heard rumours of it. The rumours he had heard were of misconduct not covered by the bill. “We are so alarmed at the thrust of the bill we are appealing to you to take a pause,” he said. “I suggest it is going to result in a very inadequate response to the matter and may create more problems than it solves.” The Government should wait until more comprehensive reviews of company law in general were available such as the Law Commission review of Company Law which was due for release in about six months. Parliament should take a pause to examine the issue more carefully and see if there was enough evidence of inside trading.