Martin Lee @ Sg
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How Far Should We Protect Investors?

Recently, there has been a spate of discussions on ST Forum about the extend that investors should be protected from investment schemes (or scams).

It all started when there were adverse news reports about a property venture linked to a former Sakae Holdings director, Andy Ong. Apparently, a group of about 90 investors had invested into the scheme, which ultimately own Griffin Real Estate Investment Holdings.

Teo Swee Wei wrote in to ask the authorities to clarify on the regulations on such schemes.

MAS replied that an offering of securities would need a prospectus to be filed. On the other hand, the sale of physical assets is not regulated. MAS is currently reviewing this.

I think that arguably, the case of Griffin could be constituted as an offering of securities, in which case, it would fall under regulations. If it was a private arrangement of collaboration between friends, then it would not.

Phoebe Goh then commented that MAS and CAD should act swiftly when such schemes are detected.

Tan Kin Lian also weighed in with his thoughts about the gold schemes (some of which have blown up) and some other investment opportunities in emerging markets.

Grace Tan, on the other hand, was against clamping down on companies, especially when no monies have been lost (yet).

This drew a quick rebuttal from Tan Kin Lian and Dave Quek, who argued that ignorant investors need protection.

As the ball gets tossed around with different views, it will be interesting to see what MAS eventually comes up with. My take on the situation is that the current situation is not adequate, and change is long overdue.

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