Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Hansard source

I thank Senator Sherry for the question. I am representing the Assistant Treasurer, and I am advised that there is no gap in the law. The Supreme Court of Western Australia handed down its decision on the nature of the investments offered by Westpoint last year. The court has confirmed that the fundraising activities of Westpoint amounted to the offering of an interest in managed investment schemes. The law covers this area quite clearly. Managed investment schemes are fully regulated through chapter 5C in the Corporations Act. The act imposes a number of duties on managed investment schemes, including meeting a number of licensing and conduct requirements. Because managed investment schemes are a financial product, as defined in the act, they are also subject to the licensing and disclosure requirements of the act.

Investors are entitled to a product disclosure statement which contains all the information required for them to make an informed decision, including details about commissions. It appears that those running Westpoint chose to structure their fundraising activities so as to avoid the disclosure requirements of the Corporations Act. ASIC has commenced action against a number of Westpoint directors, including the freezing of assets for the benefit of creditors. In December 2006, charges were laid against a Mr Neil Burnard in relation to his fundraising activities. The charges include dishonest, false and misleading statements. The government expects the full force of the law to be applied to those people who deliberately mislead investors.