Isnin, Ogos 30, 2010

Illegal scams investors may be penalised

By Tim Leonard

KUALA LUMPUR (Aug 29, 2010):
In a bid to curb the rising number of "investment" scams which have fleeced thousands of people of millions of ringgit, authorities are studying a proposal to make investors liable for participating in illegal schemes.

If this materialises, investors in illegal scams will not only lose their money to fraudsters, but may find themselves being hauled to court, or even spending time in jail.

The proposal is being jointly studied by Bukit Aman's Commercial Crimes Investigations Department (CCID), the Securities Commission of Malaysia (SC), Bank Negara Malaysia (BNM) and the Domestic Trade and Consumerism Ministry as an alternative approach to stamp out investment scams that causes millions of ringgit in losses to gullible investors yearly.

A senior CCID official told theSun the proposal looks into making investing in investment schemes not licensed by the authorities as an offence itself, similar to corruption cases where both the ‘giver’ and the ‘taker’ of a bribe are equally punishable.

“In future, anyone who wishes to invest in any investment scheme had better first check with the authorities on whether the scheme is approved by Bank Negara or SC,” said the official.

“Any scheme not approved is certainly an illegal scheme, and in most cases, a complete scam such as a 'Ponzi' scheme.

(A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.)

“The existing laws are sufficient to deal with the perpetrators of such schemes and many have already been charged in court for various investment-related offences, but this is inadequate to keep the problem away.

“As long there is demand, there will be new players who will cleverly mastermind some sort of scheme to milk investors of their money."

“But if the law is a worded in a way that investing in an illegal scheme itself is an offence, then we believe it will be a good deterrent," he added.

The official said however the proposal is at its infancy stage and needs to be studied in greater detail, especially on its technical aspects, before it can be forwarded to the Cabinet for deliberation.

He said while there are many genuine cases of investors being duped into joining such schemes, many are also culpable for joining willingly, or even getting more people to join, in a desperate bid to make easy money and get rich quick.

"The temptation to make easy money quick is a key factor that drives many people, even professionals such as doctors and lawyers, to invest in such schemes," he said.

Investment scams, which forms a high percentage of while collar crimes, is on an upward rise in Malaysia over the last 10 years.

Examples of investment scams include supposed "investments" related to commodities, foreign exchange (forex), futures, stock broking, gold, mutual funds and hedge funds.

In most cases, no actual profits are made, but money from new investors are used to pay old investors in typical Ponzi-style. Most are also based on deposit-taking which is illegal without a licence.

Some scams are more sophisticated as they involve "selling" specific products such as gold bars, investment instruments such as forex software, internet investment schemes, unlicensed fund management and high-yield investment programmes.

Last month, the Kuala Lumpur sessions court sentenced a 49-year-old businessman to four years jail for running an illegal Ponzi scheme through an internet investment scam involving a staggering RM65 million collected from 52,000 investors.

There were also other cases involving a tea garden and coffee products, as well as countless other scams that went bust or the owner ended up facing multiple charges in court. -- theSun

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