New rules will stop another stamp dealer fraud
26 May 2006, MADRID — The government has stepped in to stop a repeat of the EUR 5 billion fraud involving two stamp dealer companies.
26 May 2006
MADRID — The government has stepped in to stop a repeat of the EUR 5 billion fraud involving two stamp dealer companies.
New rules will force companies which deal in stamps and other collectibles to put aside money in a special fund to help them cover their clients' investments.
It follows the scandal in which postage stamp dealers Afinsa and Forum Filatelica allegedly defrauded 350,000 private investors out of EUR 5bn, by selling them overpriced stamps.
The investors were left with no way to get their savings back because dealers like this are not covered by deposit guarantee funds.
Elena Salgado, health minister, said the government is drafting legislation to regulate these firms' assets.
There are dozens of similar companies operating in Spain.
But Congress voted against creating a special fund to cover EUR 5bn in losses suffered by investors.
Instead a motion was passed to offer financial help to those who are facing ruin.
[Copyright EFE with Expatica]
Subject: Spanish news