The Securities and Futures Investors Protection Center (SFIPC) yesterday urged the government to speed up judicial reform to improve the center’s ability to bring about restitution and safeguard investors’ interests.
Although the center’s lawyers are willing to take more court cases, the amount of money it is able to return to investors through seizures and preliminary injunctions is still limited by the judicial system, SFIPC chairman Chiu Chin-ting (邱欽庭) said at a news conference.
Judges often deny the center’s requests to impose preliminary injunctions against defendants, which takes away a vital pre-emptive measure in preventing fraudulent conveyance of assets that can be seized to reimburse defrauded investors, he said.
“We are often told to provide proof that the defendants intend to transfer and conceal their assets before preliminary injunctions can be issued,” Chu said, adding that, as the center does not have a clear picture of defendants’ assets, it is difficult to determine their intent to move their assets out of reach.
Most notably, a change in the seizure procedures has made it more difficult for the center to seek restitution on behalf of defrauded investors, he said.
Previously, the center was given a much longer time frame to distribute seized assets to investors after a conviction had been handed down by a criminal court, he said.
The new seizure procedure stipulates that defrauded investors have only one year to file restitution claims, which is not enough time because civil court cases can last for decades, Chu said.
As a result, defrauded investors now rank below other creditors, such as banks and the government, in claiming restitution, he said.
Meanwhile, the center has made headway in other litigation cases, including against publicly traded companies that have failed to update their financial reports, he said.
Chu also commended the courts for ruling in favor of the center in lawsuits to remove board members who have harmed the interests of their company, despite the defendants’ claims that laws cannot be applied retroactively and that the infractions were committed during their previous terms.
In the past, defendants were able to retake their position on the board of directors through re-election, he added.
The center last year processed 19 class-action lawsuits claiming a total of NT$7.9 billion (US$267.25 million) in damages, while winning NT$515 million in court-ordered restitution for defrauded investors.
Separately, SFIPC president Lu Shu-lin (呂淑玲) said that the center is waiting for the legislature to complete the sub-laws for the Act on Financial Technology Innovations and Experiments (金融科技創新實驗條例) in anticipation of potential disputes about the “regulatory sandbox.”
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