I recently received an offer to buy some David Jones shares of mine - bought for the discount that I think they’re in the process of phasing out. The offer is to buy the shares for $2.04 per share when their market value - at the time the letter was sent was $4.08.

All this is mentioned on the offer, so it’s not so bad. But David Tweed has been running this scam for over a decade. The offers are always relatively straightforward - he offers to buy from you at a huge discount - or sometimes at a premium - but he’ll pay you in instalments over years by which time he’s banked the excess money and he’s ahead.

Before the regulators got to him he didn’t have to set out the market price and he made some serious money. But then he was only ever catching out the old, the infirm and the unwary. So all these formal requirements - to mention the market price - to tell you “This is an important document that requires your immediate attention. Please seek independent financial or professional advice” don’t help much. Or they don’t help enough to make it not worth David Tweed’s while to do it.

It’s pretty amazing that our commitment to form is so strong.  We have laid the regulation on retail investment, and investment advice with a trowel. But just as we’ve driven investment ‘advisors’ (ie salespeople who sell investments on commission) mad with regulation, but not helped the consumers of their service to work out if they’re any good or not, so we’ve failed to stop David Tweed.

So let me get this straight, we set up all this stuff to protect vulnerable and gullible investors, but when something that comes along which could only possibly attract gullible investors, not only don’t we stop it, but we try to kill it with a thousand requirements that don’t really address the problem. Now I can see why one might want to argue for a more laissez faire approach. Certainly I don’t want to protect every nitwit from being parted with their money if it requires me to impose huge costs on others.

But this is not even a bona fide investment proposal. It is an attempt to take advantage of others. It is of course possible that the service could be useful - to those who have small holdings who don’t want the hassle of going through a broker. But in that case the letter should say that quite simply. So I’m wondering if there cannot be some general duty of straightforwardness in such matters.

We could require of all such offers some basic level of bona fides. If we’re worried about the potential economic good it could do - sweeping up small holdings from people who might want to avoid the hassle of going through a broker - the document inviting action should be very simple, advising the recipient of the letter that they will lose a substantial amount of value and advising them not to proceed with the offer unless they have some good reason to do so.

Right now we seem to have the worst of all worlds, lots of regulation, but regulation clearly incapable of putting to an end one of the simplest, most long standing and well known scams around.

Sigh . . .