ASIC has warned retail investors to watch out for unsolicited share offers following its stop order against Hassle Free Share Sales Pty Ltd.

ASIC prevented Hassle Free Shares from making offers to buy shares in AMP Ltd and AXA Asia Pacific Holdings Ltd following concerns that offer documents to investors had misleading or deceptive statements and were worded unclearly.

Between 1 July and 3 September 2010 Hassle Free Share made approximately 90,000 unsolicited offers to AMP and AXA shareholders to buy their shares below current market prices. An example included an offer by Hassle Free Shares of $1,589.68 for 641 AXA shares which was $1,850 less than their market value of $3,448.58 at that time.

ASIC is concerned that investors may receive unsolicited offers for their shares at a price which is much less than their current market value. Many such investors may own shares from past demutualizations and may have little experience in understanding what their shares are worth or how to deal with them. ASIC is concerned that such investors may be particularly vulnerable to unsolicited low price offers.

ASIC encourages retail investors to consult its consumer website FIDO for more information on how to cheaply and easily sell shares at the market price. The FIDO website also contains further information on unsolicited share offers.

Investors who received the offer documents and accepted the Hassle Free Shares offers may have rights under the Corporations Act (the Act) to refuse to transfer their AMP or AXA shares or seek return of those shares.

Shareholders who have accepted the offers should contact Hassle Free Shares if they want their shares returned.

‘Investors need to be on the look-out for these unsolicited share offers. ASIC wants to stamp out this dubious practice and will act to stop these operators when we think the law has been broken,’ ASIC’s Deputy Chairman, Ms Belinda Gibson, said.

‘This stance reinforces ASIC’s priority to protect retail investors.’

Hassle Free Shares can appeal ASIC’s decision with the Administrative Appeals Tribunal.

Background

Off-market offers to buy financial products are regulated under Division 5A of Part 7.9 of Chapter 7 of the Act.

Under Division 6, ASIC can make a stop order if an offer to purchase a financial product is defective or if it is not worded clearly.

An offer may be defective if it contains a misleading or deceptive statement or an omission of required content, such as the financial product's market value, as at the offer date.

Before making a stop order, ASIC is required to give the offer or procedural fairness.

For further information:

ASIC Media Unit

Telephone: 1300 208 215

Email: media.unit@asic.gov.au