It is to be hoped that the British government's proposals for dealing with share-pushers, included in the Prevention of Fraud (Investments) Bill which has been read a second time in the House of Commons will not be too seriously mauled when passing through the committee stage, for the measure has been designed with great care with the idea of hampering as little as possible the operations of honest men, while permitting of effective treatment of the rogue. It is something in the nature of an anti-climax, that in this age it should be necessary for a Government to act in order to save a fool from his folly, but the success with which share-pushers have fleeced large numbers of the unsuspecting public of huge sums of money clearly proves that such legislation is necessary. That this is so is evidenced from the fact that the notorious Jacob Factor is estimated to have acquired no less d sum than £1,000,000 during eighteen months' activity in England, to have succeeded in escaping to the United States and to have fought off all efforts. for his extradition, while during the debate on the second reading, it was alleged that rogues responsible for these get-rich-quick schemes have succeeded in Wefrauding the British public of as much as £5,000,000 in a year. Human nature being What it is, with the desire for easy money, reinforced by an almost incredible gullibility, it has become necessary for the State to protect these people who fall in hordes before the persuasive tongues of the high-powered salesmen w are used in this racket. Sir Arthur Bodkin's Committee which was appointed to go into the matter in 1936 made as their main recommendations: (1) the registration of all those carrying on business of dealing in stocks and shares: (2) action to prevent circularization for the purpose of getting people to enter into agreements to buy shares; and (3) amendment of the Larceny Act so as to deal with the definition of false pretences. Registration will precede the issuance of licences by the Board of Trade which will be empowered to establish from time to time regulations, etc., under which such businesses shall be carried on. Thus they will be able to deal with the approach of canvassers to non-clients which is so necessary if the share-pusher is to succeed, and: it is hoped that eventually a system will be built up which will not only circumvent these very ingenious gentry but provide for increased punishment should they be so ill-advised as to continue their evil courses.
Thus while it may not be possible to prevent all the irregularities to which the Press has repeatedly drawn attention, the fact that the penalty for making any false or misleading statement, promise or forecast will be increased from two to seven years should have a completely deterrent effect. The Government in drafting the Bill consulted City interests, and the latter were prepared to accept certain inconveniences and some loss of dignity provided that by doing so the practice of share-pushing would be stopped. It is more than a little regrettable that coincident with the introduction of this legislation the Government has not thought fit to embark upon amendment of the libel law. Experience has shown that when newspapers in the course of their work have sought to expose these swindlers, the more daring of them, and those with most money at stake, have been able to avail themselves of the provisions of the law of libel as they stand at present to prevent a continuance of a newspaper's revelations, by filing an action which they never intended to prosecute. It is to be said for some of the journals engaged in the exposure of Jacob Factor that they were not intimidated by such action, and it was the courageous manner in which they faced possible actions for contempt of court which led to the final exposure of this man whom the British authorities would greatly like to have within their jurisdiction. It is claimed that the "Daily Mail" has spent no less a sum than £50,000 in exposing such rascals, but in doing so it has exposed itself to actions for libel, costly enough to prepare against, but which were never ultimately taken into court, because in the meantime these swindlers had succeeded in making the money they were after. The work of protecting widows and tensioners from the share-shark is a task more for the law than the Press, but in the past it has been found that the latter in its very correct endeavours as the public watchdog has been hampered and penalized by the law of libel in a manner which should never have been allowed to occur.
There would be much in the contention that if people are betrayed by their own cupidity it is their fault, but it must be remembered that astute men of the world very often fail to realize when the confidence trick in its many forms is being worked on them, and if they can be fooled how much easier must it be for the very plausible share-pusher to gull those unworldly types which still exist in uncomfortable proportions Obviously, with the provision that people dealing in stocks and shares have to be licenced, and registered, a very early remedy placed in the hands of the authorities, for the dissemination of fraudulent circulars by an unregistered and unlicensed person will be in itself a crime for which punishment is provided. This at least should serve to put a quick termination to the activities of such people. There appears to be one weakness in the Bill with, regard to the rogue who is described as "knowingly or recklessly" making misleading statements. It places upon the authorities the onus of proving the man did know and was reckless of the falsity of his statements, where it would have been better to assume that the fact of the statements being false at the time they were made threw upon the defendant the onus of proving his ignorance of that fact. That, it might be claimed, is too much at variance with the spirit of the law, as requiring a defendant to prove a negative, but, where as in such cases the whole point at issue is fraud, it does not seem too unreasonable that the defendant should be called upon to prove every indication of his alleged innocence. It is possible that during the committee stage certain weaknesses which have already been shown by critics of the proposed enactment will be tightened up. It is quite clear that if the criminals at whom this legislation is aimed, realize that the new law will make it exceedingly difficult to "get away with it" they will be reluctant to run the great risk of receiving 4 very salutary sentence of imprisonment. For this reason it is suggested that the preventive side of this Bill should receive further attention. Indeed that is imperative, for while it is satisfactory to know that specialists in this sort of crime will receive their just deserts, it would be preferable to make sure that their expected victims will be protected by adequate deterrents.
Text read from the printed page and cleaned; old type leaves the occasional error.