BCS - BrisConnections Unit Trusts

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

Over the past 6 months MQG has been a major seller of the stock ... retail investors have been the major buyers by the sounds of it.

Hardly a fair match up in my view.


And MQG is the same company that will, if my reading of the PDS is correct, be entitled to pursue the shareholders (on BCS behalf) that don't pay up for the debt owed.


As quite a few people have pointed out - an unfortunate reality of capitalism is that it tends to operate to the full extent allowed by the legal framework, with little regard for ethics.

Hence the need for a legal framework that helps to shield the lambs from the wolves.

 

[Rastan]

Re: Brisconnections shareholders - financial ruin

Although I do understand that the people who bought these shares could/should have done their homework, I must side with them on the fact that you shouldn't be able to sign up for $1mil debt instantly with a click of a button. There would certainly be something you could argue in court about the mechanisms (checks and balances) put in place by the provider of the transaction.

As for all the kerfuffle about getting someone to buy a heap of the shares from the people in trouble. For goodness sakes, I have known 2 people who have filed for bankruptcy - its not the end of the world - the debt collectors would have to back off. To make out like its some big horrible death sentence, or that they would have to go in hiding is false. They buy all the shares and then lo and behold they go bankrupt in 6 months time, simple as. If its so easy to sell these shares to retail investors, then that same reason can bite them on the bum when you sell them all (at the click of a button) to fred mcleg down the pub.

I don't see any moral problem whatsoever. There would be the legal problem of getting everyone involved to 'give' the money to a trusted 3rd party that isn't connected to fred mcleg and that he can get it in X years time. I dont know how long mcleg has to 'stay broke' for until his mysterious friend donates him the 50K or whatever, but my main point is that it isnt immoral, just another business transaction. Spell out all the downsides to being 'bankrupt' (Hows old Bondy doing?), spell out the upside and the risks and the legals and the 'how' and if fred mcleg with no life wants to buy a stack of shares from his friends before he claims bankruptcy then thats entirely up to him/her.

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

For goodness sakes, I have known 2 people who have filed for bankruptcy - its not the end of the world - the debt collectors would have to back off. To make out like its some big horrible death sentence, or that they would have to go in hiding is false.

Actually, that isn't true. If you are self employed and are the Directors of your company (PTY LTD) then you have to get someone else to be the directors - and that is a very big call to lose your own company, as you say, because of the click of a button. If you have your own SMSF, you have to be the director/trustee - being declared bankrupt has significant ramifications then - your super fund would have to be transferred to a different fund.
I dont know where you sit, but both of those situations apply to me. We would lose our business, our income, and our Super Fund. Not a death sentence but something I would dread.

I trade shares in our company; can anyone here really really honestly say they have never bought a small parcel of shares, $500, thinking that maybe it was a little gamble, maybe didnt read all the literature because you would think, Hey, I can afford to lose $500, but in BCSCA case, that little gamble lands you with a million dollar debt. Honestly, I can say, there but for the grace of God go I. Small consolation for those holding, but it has been a huge learning curve for me.

 

[grace]

Re: Brisconnections shareholders - financial ruin

Actually, that isn't true. If you are self employed and are the Directors of your company (PTY LTD) then you have to get someone else to be the directors - and that is a very big call to lose your own company, as you say, because of the click of a button. If you have your own SMSF, you have to be the director/trustee - being declared bankrupt has significant ramifications then - your super fund would have to be transferred to a different fund.
I dont know where you sit, but both of those situations apply to me. We would lose our business, our income, and our Super Fund. Not a death sentence but something I would dread.

I trade shares in our company; can anyone here really really honestly say they have never bought a small parcel of shares, $500, thinking that maybe it was a little gamble, may didnt read all the literature because you would think, Hey, I can afford to lose $500, but in BCSCA case, that little gamble lands you with a million dollar debt. Honestly, I can say, there but for the grace of God go I. Small consolation for those holding, but it has been a huge learning curve for me.

You can trade, but you have to have "in bankruptcy" in your trading name for a period of time - at least 3 years, if not 6. That might just be enough to scare most away I'm afraid.

You are listed on a couple of registers - one for life - the NIPII (although the majority of banks search the other one).

You need to make sure that someone isn't going to give you money in those first years (eg via will, horse racing, lottery etc) or the Creditor will take all of this.

You do have restrictions on how much you can earn during the 3 years following (goes up with each additional dependant child). It is about $64k net without children off the top of my head.

I have a good summary on all of the + and -'s if someone wants a copy, please PM me. There is one rule about not being able to transfer assets (liabilities?) within a certain timeframe of going bankrupt or the transfer is deemed null and void.

I have never been bankrupt, but if it does happen to you, you are not alone in this world. Stats in 2009 will be very high in this field!

 

[Julia]

Re: Brisconnections shareholders - financial ruin

Over the past 6 months MQG has been a major seller of the stock ... retail investors have been the major buyers by the sounds of it.

Hardly a fair match up in my view.

No, indeed, but - hey - as this thread is expounding, "that's capitalism".

I think you can apply the same principle to an existing holder of the shares passing them off to a person who is homeless/ignorant/uninformed/broke.
Someone in this situation isn't a person whose life is under control, and therefore in a position to make rational decisions.

So easy to find an alcoholic or drug addict who will jump at the chance of a handful of cash. You're not going to actually do anything illegal, so it's all just fine.

It'll pay back that nasty big Maquarie organisation just for being the smartasses that they are?
Do you imagine the highly paid employees of MQG will suffer financially?
Of course not. Just the shareholders will take the hit. But that's OK.
All MQG shareholders can afford it.

As Sunder pointed out originally, someone will pay and it won't be the employees of Brisconnections, MQG or any of the online brokers.

As I've said before, I would have thought there would be something of a case against Comsec for not clearly stating on the Buy screen that there was a further $2 to pay, in contrast to at least E-trade and NAB who ensured the info was available on that final screen.

And if there is no place for ethics or morality in our capitalist society, then God help us all.

 

[GreatPig]

Re: Brisconnections shareholders - financial ruin

It might be interesting to look back at the thread(s) on David Tweed to see how those now espousing "that's capitalism" commented about his operation.

Although they may have been too long ago for many of today's regulars.

GP

 

[chops_a_must]

Re: Brisconnections shareholders - financial ruin

My qupte said "within the scope of the law". All that you have mentioned above are laws to protect people, but if you can do something within the scope of the law (selling your shares to a bum) and are happy with it morally, then thats just capitalism

No. That is complete crap.

Adam Smith was first and foremost a moral philosopher.

It never ceases to amaze me the complete ignorance, arrogance and stupidity of the people, and the types of people that live, work and study in the finance and economics realm.

 

[Cartman]

Re: Brisconnections shareholders - financial ruin

just thinking outside the square for a momento here for those unlucky enuff to have got caught with these ---

instead of trying to find a bum on the street to sell to etc etc ---- if all u guys banded together and one punter agreed to buy/take on ALL your shares with the knowledge he/she would be bankrupted --- (pick the punter who has the least to lose)

the rest of you guys who were all then off the hook could agree to 'compensate' the 'bankruptee' so his life was not actually ruined at all -- (if all you guys did the right thing by him he would probably end up better off!!)

win-win situation and im guessing totally legal?? ---- bit of lateral thinking there for yas

 

[Macquack]

Re: Brisconnections shareholders - financial ruin

Can anyone please tell me what has caused this company's share price to go down to next to zero or less?
The intial installment ($1.00) was fully subscribed.
The whole thing is underwritten by
-Credit Suisse (Australia) Limited
-Deutsche Bank AG, Sydney Branch
-J.P. Morgan Australia Limited
-Macquarie Capital Advisers Limited
The project is going ahead as planned.

I must be missing something?

 

[sails]

Re: Brisconnections shareholders - financial ruin

Here is a link to a PDF I stumbled across on another forum. I don't remember it being posted in this thread - apologies if it has

http://www.asx.com.au/asxpdf/20081215/pdf/31f5r0s6cmqpk3.pdf

There is a fact sheet starting on page two stating how they plan to deal with any unpaid second instalments.

 

[Cartman]

Re: Brisconnections shareholders - financial ruin

Can anyone please tell me what has caused this company's share price to go down to next to zero or less?
The intial installment ($1.00) was fully subscribed.
The whole thing is underwritten by
-Credit Suisse (Australia) Limited
-Deutsche Bank AG, Sydney Branch
-J.P. Morgan Australia Limited
-Macquarie Capital Advisers Limited
The project is going ahead as planned.

I must be missing something?

MacBank dumped on everybody --- loss of confidence --- punters unwittingly got caught taking a punt --- zero confidence --

MacB will prob end up owning a whole lotta shares at a heavy discount to their original cost at the expense of a lot of retail investors --- ive said it b4 'crooks in suits'

it would prob be worth a punt to buy a cupla thousand shares but isnt the minimum buy on c/sec $500 ?? that equates to how much liability --- bludy mess all round.

 

[sails]

Re: Brisconnections shareholders - financial ruin

...it would prob be worth a punt to buy a cupla thousand shares but isnt the minimum buy on c/sec $500 ?? that equates to how much liability --- bludy mess all round.

Only $1m, Cartman

Your cuppla thousand would only cost you $2 to buy a $4,000 debt. Oh, plus a bit of brokerage

 

[Cartman]

Re: Brisconnections shareholders - financial ruin

Only $1m, Cartman

Your cuppla thousand would only cost you $2 to buy a $4,000 debt. Oh, plus a bit of brokerage

yep its a bludy disgrace and it WILL set a 'cupla' precendents im sure--

im interested in what the unfortunate punters caught in this mess think of my cunning plan a cupla posts back

sails u gotta spell cupla correctly !! lol

ps if each punter is happy to give the bankruptee 2 or 3 grand -- id even consider the scenario myself if theres enuff 'players' !! --- ps give me a few days to hide my assets though !!

 

[prawn_86]

Re: Brisconnections shareholders - financial ruin

No. That is complete crap.

Adam Smith was first and foremost a moral philosopher.

It never ceases to amaze me the complete ignorance, arrogance and stupidity of the people, and the types of people that live, work and study in the finance and economics realm.

So what set of high moral standards do you abide by that makes you so much better than everyone else Chops?

 

[chops_a_must]

Re: Brisconnections shareholders - financial ruin

So what set of high moral standards do you abide by that makes you so much better than everyone else Chops?

High moral standards indeed. lol.

No. What gets my goat (and no you can't have our goat, we got rid of it ages back), is the complete misrepresentation of what something is.

Capitalism, free market trade, whatever you want to call it, at its fundamental level was never meant to be a free for all.

It came out of the utilitarian school, through Adam Smith, and was a structure for which utility could be maximised in both economic and social terms. Although fundamentally flawed, he was partly right. Geez... can't believe this watermelon just admitted that. As in comparison to Feudalism, it was a no brainer from the then moralist's position.

The observation that he made about people generally only ever acting in self interest was not meant to be taken as a signal that that is what one should do, nor what he was advocating in his proposed system.

However, this apparent received, assumed "wisdom", which I have no idea where it came from, is really a hijacking and used as justification in the industries mentioned above.

Smith, I think, would be appalled that his writings have been abused in such a way. After all, his philosophy was inherently linked to various forms of Protestantism, in which it was partly developed through and thought that it could be a vehicle to expand the good and the 'moral'. Not so in our world view now, but probably noble at the time.


So we have somewhere in our history, a monumental turn, where capitalism no longer serves its people. It doesn't even pretend to. Which is completely the opposite to the reasons it was proposed as a system in the first place. Just because a system is open to exploitation, does not mean there aren't other matters at hand previously.


Which brings me to the bit that gets my goat. This, "capitalism is open to exploitation, therefore I will exploit it, and therefore I absolve myself of any responsibility in the process" attitude is the fundamental problem of the finance and econs etc etc industry today. It's kind of like the "uncovered meat" argument. Mushy brained pin stripe suit wearing civilians who are completely unable to control their urges.

The "that's just capitalism" line is evidence of this. It's complete bull****, and it's why the finance industry has absolutely zero credibility.

Labelling as and delegating personal responsibility to this anonymous "capitalism" does not make it any less the action of personal responsibility.

"Why did my FP at Storm not listen, and probably actually lie to me?" It's just capitalism.

"Why have the boards of BNB, OZL, CBA carried out borderline criminal and at best seriously reprehensible behaviours?" It's just capitalism.

It's not capitalism. It's bollocks.

When the finance and business et al industry as a whole gets over this fascination with white washing their actions in the name of capitalism, and replaces it with personal and collective responsibility, it will get some credibility. Unfortunately you seem to be a symptom of the structure and the environment that has led to these same problems. But I hope you will see the light, because you are bright.

When confronted with all these models, and structures of how things operate, it's far too easy to be overwhelmed and see it as an irresistible force. But people create these systems. They operate through them, under them and over them. They are passive - they don't do anything. It is PEOPLE that make the decisions, it is people that have the responsibility of decisions made. Whether that is collective or individual, it is irrelevant. We have to stop trying to remove ourselves from the decisions we make. The finance realm lives in this half world, where people make decisions yet are completely absolved of responsibility in the name of some anonymous, all powerful being. Everyone is a king in the finance world.


As Socrates' famous byline was, "The unexamined life is not worth living."

Perhaps we should create one for Adam Smith, "The unexamined movement of capital and trade is not worth anything."



By the way, this has no bearing on my opinion of giving a bum these shares. I just wanted to get across that it wasn't merely "capitalism". I hope I made that clear. :

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

Hi all hope your Cristmas period was fun...

32 posters in this thread believe that this situation is unjust, and 8 posters believe that the buyers are in the wrong, with about a dozen or so not expressing any real veiw as to rights and wrongs.

Its puzzling to me that there are 8 people here that believe that in a market place where millions of average punters are allowed to buy and sell, that you and I can be presented with a pruduct with 1000 times the purchase price sting. And for that sting to be mentioned nowhere on the main research pages. That this is OK.

All of the 8 posters say that a five letter code should give it away???. I feel phsically ill every time I read this. I asked 43 people over the Chrissy period who dabble in the stock market whether they know what the difference is between a 5 letter code where CA are the last two letters and a 3 letter code. Not one of them knew that this meant it was a contributing share. 8 of them thought that they were options or something other than a normal share and would have investigated further. 35 of them thought that they were just letters identifying the stock and would buy them if that was a stock they were interested in.

This is a market place where these 35 people can simply logon to commsec or westpac or netwealth and buy these shares.

One of the 8 posters above states he is sick of people not taking responsibities for their own actions. We who bought these shares are responsible and perfectly happy to pay for these shares, and perfectly happy to lose this money. Have a look at the screencaps again (I had to remove the ones on page 17 as my name was on one of them) where does it state I am up for 4 million dollars. I think this would be the time to tell me I am up for 4 million dollars, not hidden in one of a hundred odd anouncements on the announcements page.

One of the 8 posters state $1.00 paid is mentioned on the chart page (its actually $1.00 pd) as though that is enough. Most people seeing $1.00 pd would think that this was the stocks price at floating and wouldn't think for one second that it meant there was another two dollars owing.

One of the 8 says that the fact that I mentioned there are only 3 contributing shares in the industrial sector should have made me realize something was up. I'm still trying to understand what logic he/she is using there. I would have thought if these things were more common then we would come accross them more often and know to look out for them. I have never seen one before didn't know they existed, and I am not on my pat malone by a long shot.

Caveat emptor.... Material non-dislosure

Ps, if it wasn't for the 8 posters who think we BCSCA buyers are silly then this would be a pretty dull thread.....So keep it coming...

 

[Plan_Trader]

Re: Brisconnections shareholders - financial ruin

Make that 33. Totally obscene how this has happened.

If it was me, I would on sell to a third party with no assets in a heartbeat.

 

[Julia]

Re: Brisconnections shareholders - financial ruin

Rocket, you don't seem to have a 'classification' for those of us who feel very sympathetic to your situation, but who do not feel OK about the responsibility for the debt being passed off onto e.g. some homeless person.

I've previously said that I'd have thought there was a case against Comsec for not making the further two payments clear on the final Buy screen.

From the screenshots we've put up from Etrade and NAB, they appear to make the info available but I don't know if this was the case when holders bought the shares. I suppose they could have added it after all the mess came to light.

From page 2 of the PDS

 

[sails]

Re: Brisconnections shareholders - financial ruin

Hi Rocket - hope your Christmas / New Year has been OK. I would imagine this situation would have been somewhat of a dampner.

33:8 gives 76% so far agreeing that this is an incredibly easy trap for newbies to fall into.

I don't feel that offloading them to a homeless type person is morally right either - except that the homeless person:
(a) wouldn't be buying the shares - would likely be a gift with an extra cash bonus and
(b) they should be informed before the deal was done with the the option to decline.
This appears to be a fairer deal than the newbie investors who fell into this.

Certainly not condoning it - just comparing the apparent fairness (or lack of) of the two deals.

.... However, I was surprised that I couldn't find much educational info on unit trusts or contributing shares on the ASX site. And yet they have a lot of educational material on options and warrants.

Sunder hasn't replied to my last post yet - can anyone else find educational material on these unit trusts or contributing shares on the ASX site?

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

This is the only information provided on NAB (unless you try a trade in which case the 'unpaid' warning comes up.

Rocket, is your debt around $4million?