BCS - BrisConnections Unit Trusts

[rocket12]

Re: Brisconnections shareholders - financial ruin

I don't think that's quite accurate. I understand the IPO was fully subscribed. That doesn't indicate any suffering on the part of MQG shareholders.

Someone else on this thread has asked why the SP tanked as it did.
I've seen no answer. Heard there was initially a suggestion that the yield would be 14% and later this was adjusted lower, sending the SP on the quick journey down. But I don't know if that's true or not.

Rocket, we know you used Comsec as the broker for this transaction.
Thermalmonster, which broker did you use?

Btw to say that the details of the share were buried deeply in the PDS is not accurate either. The PDS has the cover page, and then on the very next page there is a very clear and full description of all the details.

Rocket and Thermalmonster: now that you have had this experience, have you worked through all of the Education section on the ASX website?
Do you think there could be other aspects of the market about which you are unaware?
Have you read the PDS of any further shares you have bought or intend to buy?

I spent many hours looking through the education section after this, but the section on contributing shares was remarkably hard to find. (If you can find it within two hours of looking i'd be impressed)

I have only ever had an interest in buying shares, and now I know to steer away from shares with 5 letters. If I only buy shares with 3 letters I know that I can only lose my initial investment.

I will make these my last comments and last post on this as I am going over the same things over and over again, and my anxiety levels are going through the roof as some are highlighting the two things I didn't do (not looking through the PDS and not going through all the announcements) and ignoring the fact that a purchase of this magnitude should be presented in the most prominant pages at the point of purchase. Tens of millions of shares are traded every single day, do some of you really believe that for every one of those shares traded that a 189 or whatever length page PDS was read?

How many of you in all honesty have read the full PDS of every share they have ever bought.

I have been nothing but honest with everything I have writen in this thread right from the word go and have admitted my mistakes, and I can sleep soundly at night knowing that I have never in my life allowed any of my actions affect the life of another person adversely.

If I am taken to the cleaners by a system that has allowed myself and others lives to be adversely affected (ruined) by their actions then so be it. Thats just the way the mop flops and thats the civilized society we live in.

Thanks everyone for the support and thanks to few who have locked horns and had a good old debate. No hard feelings not kicking off my kimbies, just getting a bit stressed out by this all...

 

[sails]

Re: Brisconnections shareholders - financial ruin

What happens to people who not only have limited market knowledge, but also have limited literacy? I think almost anyone can open an account and start trading online regardless of their academic or stock market knowledge levels.

Surely sophisticated securities such as bcsca should be kept out of reach unless certain criteria has been met.

Just my thoughts...

PS Rocket - take it easy - hopefully there will be a sensible outcome

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

I don't think that's quite accurate. I understand the IPO was fully subscribed. That doesn't indicate any suffering on the part of MQG shareholders.

Someone else on this thread has asked why the SP tanked as it did.
I've seen no answer. Heard there was initially a suggestion that the yield would be 14% and later this was adjusted lower, sending the SP on the quick journey down. But I don't know if that's true or not.

Julia - I'm not sure of the exact details - but Macquarie ended up with a substantial shareholding of 60 million shares that I don't think they were thrilled about owning. This is an excerpt fromt the announcement to the market made on the 1st of August 2008 (the day after the first day of trading in the stock).

valid settlement instructions were not received from a small number of institutions until after the cut off time on the institutional settlement date of 28 July 2008. This required Macquarie Group to settle for BCSCA securities on behalf of these institutional investors

I don't know what this mean, but it sounds to me like the underwriters - Macquarie - now owned these and were going to have to fund the additional instalments if they didn't offload them.

Luckily for Macquarie they managed to offload all 60 million shares on market between the 11th of September 2008 and 4 th Nov 2008.

Interestingly BCS reiterated their intention to pay their first fixed distribution of 5.95 cents in an investor presentation on the 10th of September 2008 (one day before MQG's first change in substantial shareholder notice to indicate they were reducing their holding).

Also interestingly, BCS also announced on the 30th of October 2008 that they no longer intended to pay their first 5.95c distribution and were going to defer the payment until after the first instalments were due. This coincidentally was 3 days before Macquarie announced they had ceased to be a substantial shareholder.

Make of all of this what you will. I know what I make of it and I have plenty of sympathy for BCSCA holders and ZERO sympathy for Macquarie.

 

[thermalmonster]

Re: Brisconnections shareholders - financial ruin

Good on ya Rocket
Chin up
Good luck

 

[Cartman]

Re: Brisconnections shareholders - financial ruin

Thanks everyone for the support and thanks to few who have locked horns and had a good old debate. No hard feelings not kicking off my kimbies, just getting a bit stressed out by this all...

well i for one have no vested interest in this 'share' but ive lost my fair share of moula making mistakes --- to all those 'holier than thou' posters on this thread that wanna put do-do on people like you Rocket --- i say 'wake up to yourselves' cause it could have easily been u !! --- oh --- u dont think so !! --- self righteous ego problematic wanna bees !! --

telling people how dumb they are for doing this or doing that just B cause they have been lucky enuff not to have done it themselves reeks of 'holy joe' ----

in the end the world doesnt run on how much money u make or how good an 'investor u are -- its about HUMANITY --- u lot who r preaching to the ones hurting ought to wake up to yrselves -- cause yr time will come when yr looking for support --- and guess what --- U reap what u sow !! -- enuff said !!!

my sympathies to all u poor buggas who are suffering --- i know the road yr on --- i got lucky --- my road was only a short one-way street ----- disregard all the clever 'legal eagles' and 'letter of the law' posters ----- they have NO IDEA what u folk are going through ------ (ignorance is bliss --- bliss is a fleeting emotion!!)

rant finished!! ---- good luck to u guys ----- i think it will end up ok for yas but not without some stress along the way ---- just hang in.

 

[thermalmonster]

Re: Brisconnections shareholders - financial ruin

Hi Cuttlefish

I got slammed on here when I called the whole thing a "Fraud"
It was a figure of speech relating to something that IMHO sailed very close to the wind (in legal terms)

Thanks to all who have tried to offer support or a way out. I dont think rocket , myself or bushie were on here looking for the sympathy vote but trying to utilise the wealth of experience and knowledge of the users.

If nothing else it has linked a few of us together with a common denominator.
Lets hope our voices are heard and that a sensible conclusion is drawn.

 

[chops_a_must]

Re: Brisconnections shareholders - financial ruin

Surely sophisticated securities such as bcsca should be kept out of reach unless certain criteria has been met.

Agreed.

And that goes for any 5 letter coded securities.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

Thermal I've been deliberately cautious/restrained in my comments on this topic but I have every sympathy for yourself, Rocket, Bushie and all others that have landed in this circumstance and wish you all luck.

I certainly hope that someone in the media takes the time to figure out how to present this in a way that the financially illiterate masses can understand it so that it gets some proper traction. Either that or that there is a quiet resolution put to you by BCS and the underwriters that allows them to get some of their pound of flesh while at the same time allowing those affected to avoid courts and/or bankruptcy proceedings.

And I hope that things change in relation to the accessability to this and similarly risky products in the future.

 

[lesm]

Re: Brisconnections shareholders - financial ruin

Clearly, a buyer of stock deserves to be fully informed regarding their investment costs. And the company has a duty to take all "reasonable" steps to inform prospective buyers.

what does/does not constitute "reasonable" seems to be central to the argument here.

Agree

but . . . if it is "not common knowledge" that there may be installments attached to your initial investment, then i would suggest the company in question is obligated to take "reasonable" steps to inform investors; where "reasonable" equates to something such as: a clear and obvious notice prior to the point of sale and at the point of sale.

james

Yes, but "common practise" will/may come into play here. The disclosure by the company appears, on the surface, to be in accordance with the normal practise of the ASX and its Rules of Disclosure and its approach to disclosure, which have been in place for a considerable period of time.

Buyers and sellers of shares interact with each other without the intervention, involvement or knowledge of the underlying company, except that it knows these events occur via the ASX's ITS system. Hence, the company is not a direct counterparty to these transactions, as in other types of business transactions. Which raises the question as to broker obligations, especially the online brokers, and potentially buyer and seller obligations.

The company itself is neither a buyer or seller in this current situation.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

Interestingly, in an ASX announcement by BCS on the 16th Sept 2008, there are various analyst valuations, and one of the analysts, the Macquarie Research analyst Ian Myles, valued them at 93 cents and rated them as a buy.

(about a month later MQG announced some more reductions in substantial shareholdings, selling on-market over 30 million shares at prices of less than 3c per share as far as I can tell - this is my interpretation only - the original announcements are the best source for those seeking further information)

 

[Sunder]

Re: Brisconnections shareholders - financial ruin

A $500 'investment' creating a $2 million dollar liabillity with no indication that this is happening at the time of purchase is the financial equivalent of exposed 240V wires lying about in the living room in my view.

I am amazed that you could type those examples and not think to yourself that, hold on I'm making a mistake here, these are nothing like what is happening with the Brisc situation. And I suppose even now that it is pointed out to you, it still wont register. Will it.

I guess this boils down the difference between those who think this situation is "wrong" and this situation is "unfortunate". One of us treats the share market like a living room, the other treats it as a threatening environment.

I'm "amazed" that you could buy a derivative product (a security derived off shares, but not a share itself.), and not bother to find out the obligations or how it's derived. The reciprocal incredulty simply highlights that we have very different view points, and clearly, one of us, thinking the world is a hostile and dangerous place, took more precautions. I'm sure I've missed out on many of the gains you have made by gambling on penny dreadfuls, but I've clearly also missed out on the risks.

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

I will make these my last comments and last post on this as I am going over the same things over and over again, and my anxiety levels are going through the roof as some are highlighting the two things I didn't do (not looking through the PDS and not going through all the announcements) and ignoring the fact that a purchase of this magnitude should be presented in the most prominant pages at the point of purchase. Tens of millions of shares are traded every single day, do some of you really believe that for every one of those shares traded that a 189 or whatever length page PDS was read?

How many of you in all honesty have read the full PDS of every share they have ever bought.

I agree you need to take time out; telling you what you should have done is doing your head in and you don't need it now. The fact remains that Comsec did not give you a warning prior to final purchase confirmation; NAB and ETrade did. The only time I have read a PDF is when I am thinking about taking up an IPO. Once the shares are trading, then I do company research, but that would not necessarily have picked up this debt. Dont come back again, what you and Thermalmonster need now is a support thread only; too late for the 'naughty boy' stuff.

Agreed.

And that goes for any 5 letter coded securities.

Hell Chops, we agree again! :

And I hope that things change in relation to the accessability to this and similarly risky products in the future.

Absolutely. Small comfort to those caught up in this but I am sure everyone here (other than the real clever ones ) has learnt a huge lesson. Best wishes to Rocket, TM and Bushie and everyone else involved. I dont care anymore how it happened, it has happened and I feel for you guys.

 

[Bushie]

Re: Brisconnections shareholders - financial ruin

Read only the market sensitive anns (!) There are only a few of them. In most cases at the end of the ann there is a statement "About Brisconnections" which tells you what you say you didn't know. Do I think it is the best way to inform people? I can't think of a better way. I have done hundreds of trades and I haven't made one without studying the anns.

If you think it is too big a chore to do some research you should stay away from the market.

I spent an hour on Netwealth, Google Finance, following the announcements listed there, attempted to open the Brisconnect site, waited for 30mins & it didn't download (I run WIN 98SE), I gave up & purchased $982-00 worth of shares understanding that all I was risking was $982-00. Went away for 3 days, came back, read my emails to find out I had committed to $1.864,000-00 debt!!! I considered I had looked far enough to risk that initial amount on a toll road/tunnel that had a 45 year concession. As we are pensioners heading into our last couple of decades on this earth, our health is not the best, all we were hoping for was a comfy nest egg (small income stream) from the shares as the years rolled by. This is NOT A GREED GRAB. We were only trying to make old age a bit easier, that's all. And for trying to not be a total burden on the Govt. this is the result, possible bankrupcy which would lead to homelessness, & what little we own, would not go to our daughter & her family as it should, no, it will most likely end up as a mere drop in the ocean of MAQ Bank's funds. Not a very nice scenario considering I did do my homework & NO WHERE I looked did anything say $2-00 unpaid. ( I have since obviously scoured the site & found it in the security section of Netwealth- but too late to be helpful.)

 

[Bushie]

Re: Brisconnections shareholders - financial ruin

Bushie hasnt been around for a while; hope all is ok[/QUOTE]

Hi, all as ok as can be, have been hiding out in the real world playing with my darling grandson, trying to forget this nightmare for a few days.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

I guess this boils down the difference between those who think this situation is "wrong" and this situation is "unfortunate". One of us treats the share market like a living room, the other treats it as a threatening environment.

I prefer to think of it as - one of us thinks that the financial equivalent of unshielded 240V wires lying around the living room is a problem that needs to be addressed, and the other likes to stand around watching people fry themselves and gloat about how they knew about it all along and would never be stupid enough to have stood on it.


(and in case there is still any confusion on the matter I don't own and have never owned BCSCA, my comments are as an observer of the situation only).

 

[steve999]

Re: Brisconnections shareholders - financial ruin

Does anybody have any information on the relevant laws etc that would be used to sue shareholders who didn't pay the future installments?

I'm just wondering what the shareholders would actually be sued for? I understand that the liability is transferred when the shares are sold to another party? Does anybody have any info on the legal side of this?

I've never purchased partially paid shares for this reason... I don't know enough about them.

 

[sails]

Re: Brisconnections shareholders - financial ruin

I prefer to think of it as - one of us thinks that the financial equivalent of unshielded 240V wires lying around the living room is a problem that needs to be addressed, and the other likes to stand around watching people fry themselves and gloat about how they knew about it all along and would never be stupid enough to have stood on it.


(and in case there is still any confusion on the matter I don't own and have never owned BCSCA, my comments are as an observer of the situation only).

Very well explained in a nutshell, Cuttlefish!

My opinion is the situation between the BrisC situation and the likes of Made-off and Storm debacles is that the BrisC buyers believed they were risking nothing more than their modest investment. It wasn't everything they owned.

While I do feel sorry for the state the others are in, it appears they are generally quite financially sophisticated people who had already made good money in their lifetime. Then, for whatever reason, decided to invest everything they owned with no apparent diversification, and then leveraged extremely heavily against it.

Just my thoughts on what I see as two very different circumstances.

Good to hear from you Bushie - hang in there.

 

[Calliope]

Re: Brisconnections shareholders - financial ruin

I spent an hour on Netwealth, Google Finance, following the announcements listed there, attempted to open the Brisconnect site, waited for 30mins & it didn't download (I run WIN 98SE), I gave up & purchased $982-00 worth of shares understanding that all I was risking was $982-00. Went away for 3 days, came back, read my emails to find out I had committed to $1.864,000-00 debt!!! I considered I had looked far enough to risk that initial amount on a toll road/tunnel that had a 45 year concession. As we are pensioners heading into our last couple of decades on this earth, our health is not the best, all we were hoping for was a comfy nest egg (small income stream) from the shares as the years rolled by. This is NOT A GREED GRAB. We were only trying to make old age a bit easier, that's all. And for trying to not be a total burden on the Govt. this is the result, possible bankrupcy which would lead to homelessness, & what little we own, would not go to our daughter & her family as it should, no, it will most likely end up as a mere drop in the ocean of MAQ Bank's funds. Not a very nice scenario considering I did do my homework & NO WHERE I looked did anything say $2-00 unpaid. ( I have since obviously scoured the site & found it in the security section of Netwealth- but too late to be helpful.)

I am extremely sorry for your predicament and I can understand if you found my post irritating. I was, however, specifically replying to Rocket who is an experienced trader who knew the ropes. He knew how to get the information he wanted but he didn't look.

There is a world of difference between his case and yours.

I still feel that the underwriters will not pursue the little guys. It is unfortunate though that they will keep you dangling for a time. I wish you and your family the best of luck.

 

[Julia]

Re: Brisconnections shareholders - financial ruin

I prefer to think of it as - one of us thinks that the financial equivalent of unshielded 240V wires lying around the living room is a problem that needs to be addressed, and the other likes to stand around watching people fry themselves and gloat about how they knew about it all along and would never be stupid enough to have stood on it.

Great analogy, Cuttlefish.

My opinion is the situation between the BrisC situation and the likes of Made-off and Storm debacles is that the BrisC buyers believed they were risking nothing more than their modest investment. It wasn't everything they owned.

Yes, and their investments appear to have been very modest indeed.
Also, in Bushie's case, the plan for a bit of extra income in the retirement years would seem to have made a lot of sense.

While I do feel sorry for the state the others are in, it appears they are generally quite financially sophisticated people who had already made good money in their lifetime. Then, for whatever reason, decided to invest everything they owned with no apparent diversification, and then leveraged extremely heavily against it.

I agree, Sails. Someone on the Storm thread leveraging so heavily on an asset base of $4million just is really surprising to me.

I still feel that the underwriters will not pursue the little guys. It is unfortunate though that they will keep you dangling for a time. I wish you and your family the best of luck.

I'm sure we'd all echo this.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

Very well explained in a nutshell, Cuttlefish!

My opinion is the situation between the BrisC situation and the likes of Made-off and Storm debacles is that the BrisC buyers believed they were risking nothing more than their modest investment. It wasn't everything they owned.

While I do feel sorry for the state the others are in, it appears they are generally quite financially sophisticated people who had already made good money in their lifetime. Then, for whatever reason, decided to invest everything they owned with no apparent diversification, and then leveraged extremely heavily against it.

Just my thoughts on what I see as two very different circumstances.

Good to hear from you Bushie - hang in there.

Cheers sails - I also view the BrisC situation as different to situations where companies have gone broke/investors have lost all of their money. I think most investors, even novice ones, are wise enough to know that they can lose all of their money if they put it all into one basket. Also anyone that purchases these sorts of things is informed at the time of signing or of pressing the submit button exactly how much money they are risking. This wasn't the case here.

When you buy a house, the full amount is clearly spelled out on the front page of the contract - the page that also gets signed - its not buried away in the back anywhere or in a separate document.

When you buy ordinary shares the full amount of the purchase price is spelled out at the time of purchase (and putting in a password and pressing submit is the electronic equivalent of signing).

When applying for any kind of loan the amount of your loan and your repayment requirements are spelt out cleary in the document that is signed.

Any normal purchase, from paying for dinner at a restaurant to buying the groceries, to buying a house, to getting a car loan, to buying ordinary shares etc. spells out the full amount owed at the time payment is handed over and/or the agreement is signed.

For the enormous levels of debt created in this situation, it seems like a regulatory issue that needs to be addressed, that the total amount of commitment being entered into wasn't spelled out at the time of purchase.


Bushie a cheers from me as well - good to see you are keeping your chin up and I hope Calliope's observations hold true in the long run.