In times of a rising share market and at the end of the financial year it is useful to be reminded of the protection afforded to investors by various provisions of the Corporations Act, in particular, Chapter 7 of the Corporations Act.
Section 761G draws a distinction between retail and wholesale clients with retail clients being afforded a greater level of protection than a wholesale client. Amongst other things a wholesale client includes a person who is a professional investor. The Corporations Act provides for a greater level of disclosure required for retail client, for example:
The Corporations Act also provides more general protection to investors (being both retail and wholesale clients) including in relation to:
Breaches of these obligations could lead to criminal prosecution and / or also allow a person who has suffered loss and damage by reason of the breach of these obligations to seek recovery of the loss and damage from the person involved in the contravention.
These rights are of course in addition to rights under other legislation for example the Trade Practices and Fair Trading Acts and at common law.