It was reported this week and to date, some thirty Finance Companies have gone ‘belly up’, and at the same time, loosing all their depositors investments. When I say investments we are not exactly talking about small amounts of money, these funds in total add up to many ‘Billions’ of dollars. Many of their ‘Investors’ could ill afford to see their hard earned savings disappear in a puff of blue smoke, many are now too old to start saving again. Unfortunately they were all steered to these Finance Companies where they were fleeced, by so called Investment Advisers. Their money was put at risk for the gain of only about 1.5% above what they would have received from a Trading Bank. There their money would have been protected by a Government Guarantee. What their adviser didn’t disclose when he was doing this service, was that his choice of Finance Company was influenced by him picking up a very substantial, ‘finders fee’. These advisers should also have known, that some of these companies where he was putting their clients hard earned cash was that some of the principals had already been involved in earlier failures.


And in all these many crashes did the all of principals lose out too? Not on your Nelly. On the surface it would seem not many, but they were all guilty of some very shonky lending which in turn caused so many failures. In many cases their money was removed and safely tucked away in Family Trusts, or perhaps moved over to their wife’s name. Of course this included their palatial home or mansion, don’t forget several high spec cars and other toys, such as the odd holiday house and a pleasure boat or two. It would also seem that in many cases the only money they were interested in protecting, was their own.


This squirreling away of funds behaviour has gone on, far too long. Laws should be passed long ago so that these hidden or untouchable funds be winkled out and recovered. No good a wife or Family Trust claiming that these were funds, are once removed, and unable to be touched. What we need is long overdue, that is laws passed so that these people need to prove exactly from where their money and funds came from, to purchase these ‘investments’. And how were these Homes, Cars, Cash, and Toys actually paid for? If the answer is not satisfactory, an order be made for recovery.


Another area were control has been weak, is the ‘Trust Deed’. A lot of fuss is made over the importance of this document, but in practice it seems that it is never acted on no matter what code of practice is written into it. It hasn’t happened to date but a lot of Trust Companies after being paid to act as a watch dog leave themselves open to claims for damages, perhaps this action may make they a little more diligent, something they haven’t been in the past.




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