Law of Investment and Financial Markets Assignment (Bdeft 6th Intake)

Law of Investments & Financial Markets

ASSIGNMENT

23 MARCH 2009
BDEFT 6TH INTAKE
By TEAM K.M.O.Y.

Compiled and Completed by:

KHAIRUNISA BTE SARUAN

MARINA BTE OSMAN

ONG LICHING

YING HSU FANG, EUNICE

Table of Contents

PART A

Ignorant Hairdresser vs. Professional Consultant 4

Know Your Client 5

Appropriate Advice based on Reason 6

Fiduciary Duty and Conflict of Interests 7

Making False Representations as to returns – Misrepresentation 8

  Fraudulent Misrepresentation 8

Is Paula able to claim in negligence under tort? 9

  Factors determining existence of a special relationship and duty of care: 9

Resulting Remedies? 11

Should Eastpoint be held responsible for the unprofessional conduct of Norm? 12

PART B

Con of the century 14

In Other Words... 17

Violation: Statements of law 18

Relevance between “Con of the Century” and Investment Law 19

Commentary on the “Con of the Century” 21

BIBLIOGRAPHY 23

PART A

Ignorant Hairdresser vs. Professional Consultant

Before we begin, it is understood that Norm is providing financial services in a financial services business: s 761A.

Puala is considered as a consumer of financial services as the financial services are of a kind ordinarily acquired for personal, domestic or household use – ASIC Act, s 12 BC.

Hence she will be able to use the ASIC Act against Eastpoint and Norm.

Assuming that Paula is in the retail category (s 761G (5)) and does not fall into the threshold of wholesale, Norm have more obligations towards Paula.

As a professional financial consultant providing personal advice to a retail client, Norm is bound by Regulatory Guide 175 (RG 175) and he should act in the best interests of his client – Paula – and take a step further in understanding her financial situation and risk tolerance.
For further enforcement, does a contract[1] exist between the two parties?
1. Offer and Acceptance
Paula approached Eastpoint to provide... [continues]

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