Sovereign rushes to fix Securities Act breach
Sovereign Assurance has advised its brokers to immediately stop selling several of its products because it has breached the Securities Act.
Friday, May 14th 2004, 12:54AM
“We shall be making an announcement(May 14),” Swanson says. “We hope to have it all sorted by then.” The urgent product suspension came about when Swanson says Sovereign discovered itself that it inadvertently breached the 1978 Act by not renewing its prospectus for some products after March 31 this year.
An ‘urgent hotline” message sent to brokers explained: “This means that investors have a right to a full refund of all monies received by Sovereign for investment since that date.”
Swanson says that applies to “about 300, more at the low selling end”.
While he wouldn’t put a dollar figure on it, he says the bulk of Sovereign’s investment clientele were in its Select Investor WRAP accounts or Aegis and were not affected.
The Sovereign product affected includes:
- Term deposit bonds
- Investment bonds
- Complete Investor plans
- Whole of life
- Living Care
- BusinessCare
The “hotline” memo says brokers will be provided with a set of questions and answers to assist them in answering any inquiries they may expect after Sovereign sends a letter to those of their clients who are affected.
“Naturally we will encourage investors to allow us to hold their monies and invest it in the product they had chosen as soon as the prospectus is renewed,” the memo adds.
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