Tuesday, September 29, 2009
Securities Commission to get more teeth
One thing that has become apparent is that many of our older direct customers (the bulk of our direct customers) have been hit hard by the string of dodgy finance company failures over the last three years, a process that had begun well before the American meltdown. Collectively about $2 billion was lost and another $4 billion frozen in bail-out schemes.
In many instances the quality of advice that these people was given by "advisers" was poor, based more often than not on the size of the commissions that the "advisers" were getting, and not on any knowledge of exactly what these companies were doing. We can speak from our own experience when one large broker was pushing AIG to us (yes, that shameful US outfit). When we asked if they had received a detailed financial analysis from AIG in NZ, the reluctant admission was "no". When we asked if AIG were paying them commission, the reluctant admission was "yes".
In other cases these finance companies used feel good advertising -- the worst example being Hanover, co-owned by playboy Ponzi-schemer Eric Watson, who up to the day before it went bust was screening TV commercials featuring former TV One News frontman Richard Long to reassure people how long term and reliable they were.
To rub salt into the wounds, a few months later Eric Watson enjoyed a lavish two-day 50th birthday bash worth an estimated 500,000 Euros ($1.16 million) in Istanbul, accompanied (naturally) by a bevy of beautiful women. Among his 300 guests were hotel heiress Ozlem Onal, American political royalty Kerry Kennedy and her cousin Caroline, Greek shipping empire heiress Tina Livanos and former Miss Italy Arianna Novacco. The two-day celebration started with a Friday night cocktail party at the Ciragan Palace, followed by an exorbitant 1930s-themed dinner party at the Sirkeci train station, the original home of the Orient Express, the following night. Most of the guests jetted in from London by private planes and stayed in the ultra-fashionable Four Seasons hotel.
To put a stop to people like Watson, the Government needs to give the Securities Commission more teeth to ensure that the public are not misled, know exactly what their investment money is being used for, how it is actually being spent, and can hold the instigators to account. To give the current Minister credit, it seems that this is what will happen. Securities Commission website.
The photo shows Mr Watson (second from left) living it up at his Istanbul party, unconcerned that many of his victims can't do the same any more.
at 7:46 AM