Get Rich Quick Scheme: Malaysian Current Legal Development
In Malaysia, a get rich quick scheme (GRQS) is one of the financial fraud activities that is prohibited under Malaysian law. The common facet of such scheme involves plans which promises unrealistic rates of returns and this new scheme continues to proliferate every year as the list of illegal inves...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Emerald Publishing Limited
2021
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| Subjects: | |
| Online Access: | https://repo.uum.edu.my/id/eprint/31148/1/JFC%2028%2001%202021%2049%3D59.pdf http://dx.doi.org/10.1108/JFC-05-2020-0097 |
| Summary: | In Malaysia, a get rich quick scheme (GRQS) is one of the financial fraud activities that is prohibited under Malaysian law. The common facet of such scheme involves plans which promises unrealistic rates of returns and this new scheme continues to proliferate every year as the list of illegal investment companies and websites are growing. Indeed, GRQS remains to stay if people are easily lured by the promise that wealth can be generated instantly with little skill, effort, or time. This paper seeks to explain the phenomenon of GRQS in light of the existing available laws in Malaysia. This paper also highlights the current development of Australian law pertaining to GRQS for comparative purpose. Design/methodology/approach – This paper mainly relies on statutes as its primary sources of information. As such, this paper analyzes the scope and provisions of the relevant laws that regulate GRQS and compare the equivalent GRQS provisions with Australia. Findings - Malaysia has comprehensive laws to combat GRQS activities. However these laws are far from perfection and only with immediate amendments, GRQS problems can be resolved more effectively. Among the weaknesses of the laws in order to tackle such a scheme are lacks of more stringent punishment against the operators of GRQS as well as the participants of the scheme. A comparison of equivalent GRQS, which exists in Australia, demonstrates that Australian laws provide wide range of punishment to the operators and prohibits the participation in GRQS. More importantly, the offence is a strict liability offence where the mens rea or guilty mind of the perpetrators is exempted. Indeed numerous proceedings have been instituted in the Australian Court against the operators as well as participants of GRQS. Originality/value – This paper analyses the scope of relevant laws in Malaysia to combat GRQS as well as examine the strengths and weaknesses of these laws. This paper also compares the equivalent GRQS, which available in Australia. This paper further suggests Malaysian should regulate punishment that is sterner for operators and participants of the scheme and indeed it is proposed that the offence is categorized under a strict liability offence where the mens rea or guilty mind of the offender is exempted |
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