Investors (Prevention of Fraud) (Jersey) Law 1967

Summary

This 1967 Law makes it a criminal offence to use fraudulent, false, deceptive or recklessly misleading statements, promises or forecasts (or dishonest concealment of material facts) to induce or attempt to induce another person to invest money or deal in securities. Most of the original Law's provisions (including its licensing and registration regime for investment and banking business) have since been repealed and superseded by later legislation such as the Banking Business (Jersey) Law 1991; what remains in force is essentially the core fraud offence in Article 2 and the Article 1 definitions.

• Prohibited conduct: Using a statement, promise or forecast known to be misleading, false or deceptive, dishonest concealment of material facts, or reckless misleading statements, to induce someone to invest.
• Covered inducements: Lending money on interest or premium terms; entering agreements to acquire, dispose of, subscribe or underwrite securities; profit-sharing arrangements over property (securities or otherwise); and agreements to profit from value fluctuations in property.
• Penalty: Conviction carries a fine, imprisonment for up to 7 years, or both.
• Banking exception: The lending-inducement offence in sub-paragraph (a) does not apply to inducements made to a person whose ordinary business includes banking, or other prescribed classes of business.

The Law is largely historical in scope today, with its detailed regulatory articles repealed by the Banking Business (Jersey) Law 1991; the current consolidated text (in force from 1 September 2022) retains the fraud offence and definitions relevant to securities, including LLC interests introduced by the Limited Liability Companies (Jersey) Law 2018.

Key obligations

• Persons must not make statements, promises or forecasts they know to be misleading, false or deceptive, or dishonestly conceal material facts, or recklessly make misleading statements, in order to induce another person to lend money, deal in securities, or enter profit-sharing property arrangements.

Related documents

• Banking Business (Jersey) Law 1991 amends this document