PROTECTING INVESTORS.

Waipa Post, Volume XXIV, Issue 1414, 11 October 1923, Page 2

PROTECTING INVESTORS.

STOCK EXCHANGE INSTITUTES INQUIRIES. The Melbourne Argus recently commented thusly on an aspect of stock exchange business that has an interest to all who dabble more or 'less deeply in scrip:—When 'share dealers suggested that action should be taken by the committee of the Melbourne Stock Exchange to ascertain why the report of an expert was not sent to Borneo by the Bux syndicate was not at once available, they acted in the general interest. One of the responsibilities of providing a free market for stocks and shares is to assure that those who buy and sell in it shall, as far as possible, be on the same footing. Early publication of either favourable ,or adverse reports relating to mining ventures, or news of important developments, ought, if possible, to be forthcoming promptly. Unless that be done, the risk exists of a leakage of news from a mine or from an office taking place, with the result that those who learn the facts have the cream of the market. Where the investor frequently suffers is not in the case of a delay in the publication of a report known to be in hand, but where important information is received unheralded and is then kept back from publication. Negotiations for merging interests, a satisfactory commercial agreement, or a sharp recovery in a company's finance may .occur, and nothing be notified to the shareholder until he receives the annual report of the company. Even then the full facts may not be set out. and shareholders, being unaware of the changed fortunes of the venture, may sell their shares to their permanent loss. It must not be implied that speculation in these cases is always controlled by directors or by company officials. Still, the position becomes known to people, and the market is raided at the expense of the uninformed shareholder. In cases of the kind, it is very rarely that the committee of a Stock Exchange is told by its members to probe affairs with the inten-

tion, if a satisfactory explanation is not forthcoming, of having the stock removed from the exchange official ’list. Complaints may he heard, but the fear of offending important interests acts as a deterrent. But it is no use bothering small concerns if the large offender is not to have attention.