REFUSAL TO PAY

Press, Volume C, Issue 29508, 9 May 1961, Page 14

REFUSAL TO PAY

Broker Left With Shares

(From Our Own Reporter) DUNEDIN, May 8. Just* before Easter this year a Dunedin sharebroker bought 300 shares in the Standard Insurance Company at 24s each on instructions from an 18-year-o!d clerk in a Dunediin office. After the Easter recess of the Stock Exchange, when Standard Insurance shares had fallen to 3s the broker reminded the youth that he had not paid the bill for the shares—£36o plus brokerage. The youth replied he did not want the shares now and told the broker: “I am under 21. You can’t sue me.” Under the Stock Exchange rules the broker for the buyer and the broker for the seller are principals in a transaction so that if a broker's client refuses to pay for shares the broker must settle with his colleague.

Other instances are known —including three in Christchurch and not of minors—of clients refusing to sign transfer forms for Standard Insurance shares they had instructed their brokers to buy. A sharebroker would be unlikely to take his client to Court in such a case; but the client would probably be “blacklisted” by all sharebrokers in his city. (Report of Meeting on Page 16.)