- Joined
- 25 February 2011
- Posts
- 5,686
- Reactions
- 1,222
+1A dangerous precedent would be set if a court ruled that Storm investors were entitled to recoup 100% of their losses – it could become difficult or near impossible to get loans or advice from anyone for investment purposes.
Banks would be most reluctant to lend money for a business venture if they knew they could be liable for the full amount of their client’s losses in the event of the business failing. No stockbroker would be game to give clients advice if they knew they could be legally bound to make good any losses the client incurred from the stock going down instead of up. No financial advisory firm would be too keen on handing out advice either.
Any lending institution that has financed investments that failed could be sent broke by having to refund any losses made by those investments.
I am increasingly surprised by the variety of people that I am meeting whom exhibit the characteristics and sentiments that would typically give rise to a "Storm" like financial incident.
Recently, a friend of mine whom has decades of experience as a successful landlord/owner builder, and full time businessman, suggested to me that I might benefit from undertaking a course in forex. He explained that he'd been to an introductory seminar where the guy offering the course had demonstrated the ease of a particular strategy by performing the trade from within an airborne helicopter! It was on the basis of this, coupled with the fact that the trader sounded intelligent, that my friend assured me that this (rather expensive) forex course would be of benefit! I made a preliminary effort to educate my friend but quickly realised that he was probably more in need of a financially and emotionally costly semester in the school of life. My recounted experiences of actually trading in financial markets with real money didn't seem to rate as highly in his mind as the grandiose promises of the intro seminar that he'd attended.
Until such time as critical thinking and/or business acumen become key parts of our education curriculum, this situation is unlikely to improve. The general media has been adding fuel to the fire (of financial complacency and naivete) by continually extolling the virtues of fully entrusting one's financial affairs to the care of licensed "professionals". This only serves to further promote the illusions of "efficacy" and "integrity" within our regulated financial services industry.
Whilst I do believe that the Stormies are victims of a sort (they'd unwittingly been duped for decades before Storm availed itself of their susceptibility), I would certainly not support any claim for material compensation beyond that which can be legally demonstrated to the satisfaction of the courts. Nor would I encourage entertaining the victim perception beyond a reasonable period of grief/despair. It is for each individual to, in their own good time, discover their way to move forward with their lives.