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Enumerate
14-03-2010, 11:23 PM
What is the problem with Huljich Kiwisaver ... an upper quartile fund is boosted by an ex-gracia payment covering off mistakes ... Wow! I wish all my funds managers were as honorable as this.

Gareth Morgan and that woman from the Albatross fund (or something like that) ... leading the chorus of disapproval. Apparently their funds rank at the bottom quartile of fund performance. Maybe they are upset about being pressured to pay some of the losses back.

Why does this go on and on? It is not as if there are no issues that need serious investigation - elsewhere.

Huljich has resigned ... his fund is offering to transfer the money to a default fund. End of story, I would have thought.

For example, why not investigate:

The NZX backtracks in an arbitrary way over the ALF inclusion in the NZX50 ... no further questions are asked?!? The bigger question of NZX role as market regulator (and some of the dubious decisions and lack of coherence, by the NZX in capacity as regulator) are ignored.

SCF and the continuing litany of spin. Illusion and reality at Richina. Deceit at Babcock & Brown ... fear and loathing at Trans Tasman properties ... I could go on and on ... no journalistic interest, no regulatory response, nothing ...

Also, why cannot Bernard Hickey just get over the fact that he does not understand the property market and the financial instruments that support it. There was the major collapse (over 30% - forecast by Bernard) that never happened in property prices and now he is on the affordability bandwagon ... the man only has 2 ideas and they are both wrong. I cringe as I see any deep insight into the situation strangled by his statistics. Bernard thinks by torturing statistics - he can get them to admit to any financial crime.

minimoke
15-03-2010, 08:16 AM
Enumerate
HWM issues are well covered in the Kiwsaver area. And he hasn't resigned - he's gone as a Director but has been retained on the payroll for his operational knowledge. The issue with HWM is that their irregualr and non-transparent transactions are symptomatic of the other issues you raise: Kiwis being sucked into dodgy dealing by the upper ecelons of the finance sector.

macduffy
15-03-2010, 08:19 AM
Phew, Enumerate, enough material there to keep anyone busy for the reast of the day/week/month?

I support your point about the lack of investigative financial journalism in NZ. The one columnist, not a "regular" journalist, who does scratch these itches is Brian Gaynor who has been a long standing critic of the regulatory regime, both in print and in his weekly slot on TV1's Business programme. His latest weekend column in The Herald also had a dishonorable mention of Jenny Shipley's role in the Richina debacle.

But it's not nearly enough.

percy
15-03-2010, 02:56 PM
Chalkie in the Independant says Huljich saga needs its day in court.If the securities commission doesn't prosecute HWM,the recent outspoken member appointee Simon Botherway may as well resign.It is important to make an example of this "cheater".Our securities commission has to become more aggressive and send a strong message to market participants.
As always an excellent article by Chalkie.

Enumerate
15-03-2010, 04:35 PM
Enumerate
The issue with HWM is that their irregualr and non-transparent transactions are symptomatic of the other issues you raise: Kiwis being sucked into dodgy dealing by the upper ecelons of the finance sector.

Fact of the matter is the transaction was transparent ... just not to his other directors. They signed off the accounts - were embarassed by the revelations - we are where we are ...

Do you think that "churning" holdings does not occur in NZ managed funds. The broader superannuation section is rife with hidden fees. I would speculate that Huljich's problem is that he was not as clever at disguising the transactions as the upper echelon funds.

What he did was wrong - he resigned as a director, as you point out.

However, the vast array of negligence, manipulation and malfeasance that goes investigated and unreported is the point I would like to make.

Huljich, in my eyes, seems to honest but slightly naive. My complaint is that the ratbags want to hang him out to dry to divert attention from more fundamental issues.


The one columnist, not a "regular" journalist, who does scratch these itches is Brian Gaynor

I agree with you ... I have the highest respect for Gaynor. There have been times in the past where I thought he was a bit extreme in his view. However, he proved correct - I proved incorrect; hence the growing respect.


Chalkie in the Independant says Huljich saga needs its day in court.

On what grounds? Being honest yet naive? Prosecute under the fair trading act?

I would much rather the Securities Commission invest some energy in getting a coherent policy framework together and some independent oversight of market activities. These Securities Commission, in my view, has been negligent (by this I mean: too timid at times and too aggressive at times).

Where is the sense of perspective in all this? That is my point. Prosecuting Huljich would be unjust because it would imply all the other Kiwisaver funds do not churn or impose hidden fees. First prove this latter point before stoning Huljich for adding money to a performing fund.

Perspective please! This is not Salem - there are no witches.

minimoke
15-03-2010, 05:30 PM
Huljich, in my eyes, seems to honest but slightly naive. My complaint is that the ratbags want to hang him out to dry to divert attention from more fundamental issues.
I agree with teh overall sentiments of your post. There are bigger ratbags out there that deserve much closer attention. However sionce they are, gnerally, white, male and in teh finance sector they seem to avoiid any scrutiny.

Back to Huljich - your confidence in his honesty is more than mine. I have no doubt at all funds flow from place to place in the inevitable churn. However "topping up" without infoming the other directors smacks of something to hide and a lack of awareness of responsibilities and concern about others to me. Buying shares in your own IPO smacks of "feathering ones own nest" and investing so much in NEW is reckless (if you want to be seen as someone with big steel balls use your own money! Oh thats right he did - he did stick in a Mil or two to give some lift to the Units.). Door-to door selling is not legal and as for attracting Starbucks workers - well that smacks of exploitation to me. And thats without looking too closely at NZF.

But lets not debate the toss. Bring on the Securities Commission and let them be the arbiters of allowable professional practice.

minimoke
15-03-2010, 05:57 PM
Gareth Morgan and that woman from the Albatross fund (or something like that) ... leading the chorus of disapproval. Apparently their funds rank at the bottom quartile of fund performance. Maybe they are upset about being pressured to pay some of the losses back.


On hte back of teh News that Mike Pero Mortgages is looking at disassociating thmesleves frm Huljich (and Gareth Morgans perhaps improper outburst of a fellow Kiwsaver trough feeder: "Riley pointed out that Gareth Morgan KiwiSaver funds had taken a hit in the last quarter - research house Morningstar ranked the Morgan growth fund 19th out of 20 on performance in the December quarter. The equivalent Huljich fund came in last."

percy
15-03-2010, 07:19 PM
Perspective please! This is not Salem - there are no witches.[/QUOTE]

Chalkie.
"If the commission does not prosecute,it has learnt nothing from finance company failures.The signalling effect of putting an early transgressor through hell should not be underestimated in discouraging further bad behaviour by existing players and low-quality operators entering the industry.
KiwiSaver is already looking like the biggest game in town and just like a good rugby referee,the Securities Commission should show someone a coloured card early in the season to demonstrate to the players that there is a cost for not sticking to the rules."

Steve
15-03-2010, 07:51 PM
FWIW and I don't want to show my age here, the Huljich who used to bounce around on Sharetrader many moons ago went by the name 'Long Strangle'. While he hasn't been on the borads since 2005, it was around the time that the Huljich's were getting involved with NZ Finance. If you flick thru the relevant postings, you will see that 'Long Strangle' was quite often on the nose with his guesstimates of future earnings upgrades etc for NZF. From memory, once it became known that he was a Huljich and had involvement with NZF, there were a few comments made regarding ethics & dropping hints with non-public information. That's about when 'Long Strangle' left the boards of Sharetrader.

Unfortunately, I don't recall the first name of this Huljich...

winner69
15-03-2010, 08:02 PM
He owned up as being Peter

Steve
15-03-2010, 08:12 PM
He owned up as being Peter

Thanks Winner. Appears to be a similar MO - over-keen to be doing what he thinks is the right thing for his fellow investors?

percy
15-03-2010, 08:18 PM
well done Steve and winner69.thank goodness sharetrader has poster's like you who have good memories and clear thoughts!

winner69
15-03-2010, 08:23 PM
One post back in 2005 congratulated him and the family getting heaps of shares for 53 cents and Peter seems to have bought more along the way in excess of $1

Does he still hold his 16% and has there been a share split somewhere along the way?

Enumerate
15-03-2010, 08:38 PM
Does he still hold his 16% and has there been a share split somewhere along the way?

Huljich interests in NZF are still significant.

Instead of a share split - we have had a GFC - same effect though.

NZF Group have announced they are reviewing options for recapitalisation following the S&P review of NZF Money (indicating the thinly capitalised parent as the reason for the B rating of Money). You would have to speculate if Huljich interests will use the mandatory recapitalisation as an opportunity for taking control.

Dr_Who
15-03-2010, 08:49 PM
FWIW and I don't want to show my age here, the Huljich who used to bounce around on Sharetrader many moons ago went by the name 'Long Strangle'. While he hasn't been on the borads since 2005, it was around the time that the Huljich's were getting involved with NZ Finance. If you flick thru the relevant postings, you will see that 'Long Strangle' was quite often on the nose with his guesstimates of future earnings upgrades etc for NZF. From memory, once it became known that he was a Huljich and had involvement with NZF, there were a few comments made regarding ethics & dropping hints with non-public information. That's about when 'Long Strangle' left the boards of Sharetrader.

Unfortunately, I don't recall the first name of this Huljich...

How did you guys find out it was Huljich?

Enumerate
15-03-2010, 09:09 PM
The fund relative returns are difficult to track down. This is the best I can find:

http://www.goodreturns.co.nz/article/976496308/kiwisaver-performance-survey.html

Describing the Huljich fund returns as "second to bottom" for the December quarter does not present an accurate assessment of fund performance. More "hatchet jobs" on Huljich - makes me wonder what the guy has done - apart from given money to his investors - to warrant this orchestrated litany of lies.

I wonder if there are league tables of the relative performance of "Financial Planners"? I wonder if portfolios designed by these people brimming with BridgeCorp and Hanover debentures deserves the same level of scrutiny as Huljich compensating investors in an irregular manner? No I suppose there is no interest in the former and plenty of interest in the latter - for the life of me, I cannot understand this.

Alan3285
16-03-2010, 12:23 AM
Enumerate,

Where is this listed on NZDX?

Is it under a different name? I can't seem to find it.

Thanks,

Alan.

Enumerate
16-03-2010, 08:12 AM
Where is this listed on NZDX?

Is it under a different name? I can't seem to find it.


I have taken the liberty of adding the thread to the NZDX sub-category as I was expecting fixed interest or income investors to be interested in the issues of market governance and oversight raised by the diversion of public approbation, of the finance sector, onto Huljich.

Your choices are:

1) avert your gaze from the discussion; or
2) request the moderator to reallocate the thread to some more appropriate sub-category.

This is part of my ongoing initiative to broaden fixed interest discussion away from SCF.

There is no charge for this public service.

minimoke
16-03-2010, 08:19 AM
... I wonder if portfolios designed by these people brimming with BridgeCorp and Hanover debentures deserves the same level of scrutiny as Huljich compensating investors in an irregular manner? No I suppose there is no interest in the former and plenty of interest in the latter - for the life of me, I cannot understand this.
Teh issues around Huljich are decenlty enough documented on these threds.

With respect to Bridgecorp we have Rod Petricevic, Rob Roest, Gary Urwin and chairman Bruce Davidson facing 10 charges so they are coffered of. With Hanover we have ALF forwading file sfo r furhter investigation. With Blue Chip we have Mark Bryers facing somehting like 70 charges. Brian Clegg pleaed guilty and got 12 month home D for $15m. Marcus MacDonald, Anthony Bowden and Nicholas Kirk of Five Star were banned as Directors; Nevilel Cant and Rys Morgan were charged as were Trevor Ludlow, Anthony Banbrook and Carol Braithwaite of National Finance. Theres no shortage of Direcotrs doing dodgy stuff and no shortage of directors who have had their actions reviewed by thee courts - why should Huljich be any different?

Balance
16-03-2010, 09:06 AM
Teh issues around Huljich are decenlty enough documented on these threds.

With respect to Bridgecorp we have Rod Petricevic, Rob Roest, Gary Urwin and chairman Bruce Davidson facing 10 charges so they are coffered of. With Hanover we have ALF forwading file sfo r furhter investigation. With Blue Chip we have Mark Bryers facing somehting like 70 charges. Brian Clegg pleaed guilty and got 12 month home D for $15m. Marcus MacDonald, Anthony Bowden and Nicholas Kirk of Five Star were banned as Directors; Nevilel Cant and Rys Morgan were charged as were Trevor Ludlow, Anthony Banbrook and Carol Braithwaite of National Finance. Theres no shortage of Direcotrs doing dodgy stuff and no shortage of directors who have had their actions reviewed by thee courts - why should Huljich be any different?

Huljich must face scrutiny and face action as appropriate.

I do think his actions are not fraudulent however (unlike the others).

Alan3285
16-03-2010, 09:16 AM
I have taken the liberty of adding the thread to the NZDX sub-category as I was expecting fixed interest or income investors to be interested in the issues of market governance and oversight raised by the diversion of public approbation, of the finance sector, onto Huljich.

This is part of my ongoing initiative to broaden fixed interest discussion away from SCF.


You raise an interesting option.

The best option here would be for SCF to take over the Hirich Kiwisaver fund, and swap their investments therein for SCF prefs.

This would enable the investors to liquidate their investments more easily, and would simultaneously help to recapitalise SCF.

Have you spoken to Chris Lee? He would likely support your suggestion.

Alan.

minimoke
16-03-2010, 09:37 AM
The fund relative returns are difficult to track down. This is the best I can find:

http://www.goodreturns.co.nz/article/976496308/kiwisaver-performance-survey.html

Describing the Huljich fund returns as "second to bottom" for the December quarter does not present an accurate assessment of fund performance.

An accurate is no longer possble because of the "Topping Up" The tables can't compare apples with apples.

But the information is out there. For the past three months (with no top up) Huljitch rates on Morningstar (the only league table out there):
MultiSector moderate - 16th out of 16 with a 0.81% return against an average of 2.01%
MultiSector balanced - 23rd /24. 0.68% vs 2.57 ave
Growth - 20/20. 0.66% vs 3.14%



I wonder if there are league tables of the relative performance of "Financial Planners"?

That Financial Planners don't have league tables is probably not so important now since their behaviour in the past has been so dodgy that the Finacial Advisors Act 2008 needed to get passed.

But if you want league tables there are always the S &P credit ratings. And NZF Money (where Huljich is a Director) gets a B rating there.

percy
16-03-2010, 11:06 AM
on the 11/4.2002 I sold all of my Bridgecorp shares at 95c per share after reading an article by Chalkie in Unlimited mag.I had trouble understanding their a/cs however Chalkie could see through them.Just thought you all may wish to know why I value Chalkie's opinion so much.
I can only see history repeating itself,should we let "cheats"off.

macduffy
16-03-2010, 11:37 AM
Huljich must face scrutiny and face action as appropriate.

I do think his actions are not fraudulent however (unlike the others).

I'm not sure what word I'd use for actions that falsely enhance returns with the possible effect of enticing others to invest!

Seriously misleading, perhaps?

winner69
16-03-2010, 12:34 PM
The Long Strangle story mentioned by Steve is featured on content on the NBR website today .... good one Steve for remembering that

Make your own mind up ... go to Community / Member List to find Long Strangle and then click on All Posts

or try this

http://www.sharetrader.co.nz/search.php?searchid=5503

minimoke
16-03-2010, 03:41 PM
More progress today" Huljich Wealth Management has appointed Investment Research Group (IRG) chief investment officer David McEwen as an external consultant to its investment committee."

Enumerate
16-03-2010, 05:25 PM
You raise an interesting option.

The best option here would be for SCF to take over the Hirich Kiwisaver fund, and swap their investments therein for SCF prefs.

This would enable the investors to liquidate their investments more easily, and would simultaneously help to recapitalise SCF.

Have you spoken to Chris Lee? He would likely support your suggestion.

Alan.

Lol! Alan ... you really do know how to extract the michael ...

westerly
16-03-2010, 05:51 PM
on the 11/4.2002 I sold all of my Bridgecorp shares at 95c per share after reading an article by Chalkie in Unlimited mag.I had trouble understanding their a/cs however Chalkie could see through them.Just thought you all may wish to know why I value Chalkie's opinion so much.
I can only see history repeating itself,should we let "cheats"off.

If my memory is correct Chalkie was associated with "The Independent " and any present day Chalkie is not the same person. ( I have been wrong however)
Westerly

Steve
16-03-2010, 06:07 PM
More progress today" Huljich Wealth Management has appointed Investment Research Group (IRG) chief investment officer David McEwen as an external consultant to its investment committee."

I'm not convinced that this is positive: IMO - IRG = Brent King = BARGE POLE

Steve
16-03-2010, 06:10 PM
The Long Strangle story mentioned by Steve is featured on content on the NBR website today .... good one Steve for remembering that

Unfortunately it's subscriber only - are you able to provide a summary?

winner69
16-03-2010, 06:14 PM
I'm not convinced that this is positive: IMO - IRG = Brent King = BARGE POLE


Steve - The NBR seem to have appreciated you reminding us of Long Strangles posts back in 2005 .... they made the most of it

percy
16-03-2010, 06:43 PM
If my memory is correct Chalkie was associated with "The Independent " and any present day Chalkie is not the same person. ( I have been wrong however)
Westerly

We are both right.The person who wrote the article in Unlimited mag is the present day "Chalkie" in The Independent.At the time he wrote under his given name in Unlimited.I trust that makes sense to you westerly.

Enumerate
16-03-2010, 09:52 PM
Teh issues around Huljich are decenlty enough documented on these threds.

With respect to Bridgecorp we have Rod Petricevic, Rob Roest, Gary Urwin and chairman Bruce Davidson facing 10 charges so they are coffered of. With Hanover we have ALF forwading file sfo r furhter investigation. With Blue Chip we have Mark Bryers facing somehting like 70 charges. Brian Clegg pleaed guilty and got 12 month home D for $15m. Marcus MacDonald, Anthony Bowden and Nicholas Kirk of Five Star were banned as Directors; Nevilel Cant and Rys Morgan were charged as were Trevor Ludlow, Anthony Banbrook and Carol Braithwaite of National Finance. Theres no shortage of Direcotrs doing dodgy stuff and no shortage of directors who have had their actions reviewed by thee courts - why should Huljich be any different?

Les Currie (MED) is the official assignee for Bluechip, the Director prosecutions you cite are being done by the MED National Enforcement Unit (a very fine innovation within Neville Harris' Companies Office and Insolvency Trustee Unit). These prosecutions occur under the Companies Act - Neville Harris, as Registrar of Companies - is doing a very fine job.

The Securities unit within MED has partial jurisdiction in terms of disclosure documents and they do a good job. There is a new register of financial service providers coming online ... and standards set for those dispensing financial advice.

However, Finance Reporting Act etc. are not MED jurisdiction. Market regulation is not MED jurisdiction. Kiwisaver reporting is not MED jurisdiction.

Ask yourself the question: "What exactly, in terms of the various statute, regulation, ministerial directive - did Huljich do wrong?"

I doubt very much whether Neville Harris, who is the most effective participant in terms of market governance, will have any interest in the issue. Hence all the examples you cite are irrelevant.

If you are still keen to prosecute - please answer: "Which agency and what statute do you have in mind?"

If you don't have a ready answer to this, perhaps you may consider that you may have a touch of hysteria brought on by reading too much Chalkie.

Alan3285
16-03-2010, 10:02 PM
Les Currie (MED) is the official assignee for Bluechip, the Director prosecutions you cite are being done by the MED National Enforcement Unit (a very fine innovation within Neville Harris' Companies Office and Insolvency Trustee Unit). These prosecutions occur under the Companies Act - Neville Harris, as Registrar of Companies - is doing a very fine job.

The Securities unit within MED has partial jurisdiction in terms of disclosure documents and they do a good job. There is a new register of financial service providers coming online ... and standards set for those dispensing financial advice.

However, Finance Reporting Act etc. are not MED jurisdiction. Market regulation is not MED jurisdiction. Kiwisaver reporting is not MED jurisdiction.

Ask yourself the question: "What exactly, in terms of the various statute, regulation, ministerial directive - did Huljich do wrong?"

I doubt very much whether Neville Harris, who is the most effective participant in terms of market governance, will have any interest in the issue. Hence all the examples you cite are irrelevant.

If you are still keen to prosecute - please answer: "Which agency and what statute do you have in mind?"

If you don't have a ready answer to this, perhaps you may consider that you may have a touch of hysteria brought on by reading too much Chalkie.

Enumerate,

I am shocked that you are defending Huljich's actions.

He appears to have set out to deliberately mislead potential investors by overstating his ability to generate investment returns.

If that is so, then this is an attempted con - to be perpetrated on unsuspecting potential investors.

There is no 'grey area' in this - either we expect people to be open and honest, or we forget disclosure, and just say 'caveat emptor'.

If it as it appears from the reports in the media, and if he had gotten away with such a fraud, then the small outlay to bait a large number of victims would have been the only good investment anyone made in the whole sorry saga.

Alan.

minimoke
17-03-2010, 07:17 AM
If you are still keen to prosecute - please answer: "Which agency and what statute do you have in mind?"

It is not for me to prosecute. It is for our various regulators to determine if there is a case to answer and take things from there.

If between them they decide there is nothing untoward so be it. Investors can go into schemes confident that their money can go into IPO's in which directors have personal interests, directors can omit to tell them certain things about the true state of their fund balances; directors can withhold information from fellow Directors, and that their investors can place loads of money in a high risk and illiquid companies. Who needs decent disclosure and transparency anyway - its just one of those pesky things that gets in the way of the Directors personal agendas.

Oh, and I'm not sure I have a touch of hysteria - indeed there is no hysteria. My concerns around Kiwisaver are well documented and consitent in the Kiwisaver thread. The Huljich situation is one that was forseen long ago and your response is consistent with my view that Kiwsavers are going into their schemes eyes tightly closed with no expectation of looking at anything with other than a superficial glance.

Perhaps your question might be better put to the Minister of Commerce, who in the wake of Huljich is implementing a fast track review whichh wil look at: whether KiwiSaver providers should provide detailed quarterly reports to an expert monitoring panel; whether fund managers should have to regularly report to investors, and the regulator, on the returns, assets and fees of each fund; whether the regulator should be given greater power to supervise the trustees of KiwiSaver schemes, and to hold them accountable; and whether further powers of enforcement for the regulator are necessary.

Then you have Rob Cameron of the Capital Development Markets Taskforce reckoning there shold be better diclosure of fund performance. Are those hysterical reactions? I haven't read Chalkie so can't comment on his Hysteria - but it seems there are more than him who are interested in determining what is considered proper action by directors and trusteees in the Kiwisaver game.

Enumerate
17-03-2010, 07:18 AM
He appears to have set out to deliberately mislead potential investors by overstating his ability to generate investment returns.

First point is that this assertion is very far from being proven. His stated intention was to compensate investors for a poor investment decision. The seems to be primarily directed to a non-kiwisaver fund but had a flow on effect to the kiwisaver funds.



If that is so, then this is an attempted con - to be perpetrated on unsuspecting potential investors.


I would be happy to be "conned" in this fashion. If losses in the portfolio were repaired by a wealthy investor - this is the type of fund I would be very interested in.

There are funds that, in fact, offer a capital guarantee. If Huljich formalised the terms upon which he would compensate the fund for losses - this would be perfectly ok - indeed, highly attractive.

People are complaining that this was an informal process.

IF THIS "INFORMALITY" WAS THE ONLY THING THE FUNDS MANAGEMENT INDUSTRY HAD TO WORRY ABOUT - THEN WE'D ALL BE IN A GREAT STATE.

The fact of the matter is that there are much much much worse deceits, malfeasances, rorts and fiddles that go completely un-investigated. THIS IS MY MAIN POINT - the Huljich issue has been blown up out of all proportion to the harm - why do the journalists, regulators, policy makers, commentators spend so much time and effort on an irrelevancy when there are serious structural issues facing the financial services market.

For God's sake we have seen 40 finance companies collapse, multiple $billions wiped out. The Huljich issue is TRIVIAL in comparison. It amounts to an ethical issue of disclosure. To the credit of Brash et al - this issue has been completely resolved with the Huljich resignations.



There is no 'grey area' in this - either we expect people to be open and honest, or we forget disclosure, and just say 'caveat emptor'.

If it as it appears from the reports in the media, and if he had gotten away with such a fraud, then the small outlay to bait a large number of victims would have been the only good investment anyone made in the whole sorry saga.


What fraud, Alan?

The payments was actually disclosed in the accounts. Hardly the stuff of a coverup.

Like most journalistic commentators - I do not think you have a firm grasp on the issues facing market governance and regulation in New Zealand. Your interpretation that fraud has occurred is completely without basis. In fact, it is clear that Huljich Wealth Management has reacted with integrity over this issue.

I would suggest that Huljich should add a clause to their Trust Deed to say: "From time to time our wealthy found may make ex-gracia payments to the funds to cover off any perception of poor investment choice or any other implied ethical obligation to investors".

The Huljich case is an idle diversion for foolish people who cannot see the woods for the trees. It is a dangerous precedent that those who have positions of trust and judgment - whose performance in this role, over the past few years, has been appalling - are seeking to divert the serious attention of key agencies to this side show circus AT THE EXPENSE OF SERIOUS ATTENTION TO THE ROTTEN REGULATION AND GOVERNANCE OF NZ CAPITAL MARKETS.

Huljich was naive - he has paid more than a full measure of compensatory justice. There isn't even a prima facie case that Huljich was attempting to deceive. It is not even clear that the "deception" cast by various lazy and inept market commentators is, in fact, illegal. Huljich's resignation speaks of a high degree of integrity.

minimoke
17-03-2010, 07:36 AM
For God's sake we have seen 40 finance companies collapse, multiple $billions wiped out. The Huljich issue is TRIVIAL in comparison.
I totally agree. Indeed in Lianne Dalziell we had a Minister who twiddled her fingers while Rome burned. She failed to put a lid on that pool of sharks.

However what we have is two financial environments. We have the old tried and true finance company environment which has been ripe for picking by dodgy promoters influeincing lazy investors. Been around for ages and yet they still manage to get away with their dodgy activity. Good luck to punters here - theres loads of history and you take your chances.

The new environment we have is Kiwisaver. An environment in which finance houses had to do absolutly nothing but in return the goverenment threw them pot loads of free tax payer cash. I remain stagerred that after all the shinnagigans in the sector the Goverenment could create a frame work which gave this secotr such incredibly free money. In this environement there is the two tiered reporting structure (between the default providers and the "others") so already there is the potential for inconsistency. Kiwsaver can be set up by anyone. Check out the ludicrously small size of some of these funds - all with the full support and largesse of the government. So we have a scheme that is dead easy to set up and then you throw ignorant money into it. Starbucks employees and South Auckland punters are just ripe to be ripped off in this potential new cesspit. Kiwisaver has to be one of the easiest ways for dodgy people to make money - yet we have people sitting back going "oh theres a wee transgression here, lets not get over excited, he only had the best intersts of his investors at heart". Frankly that is just bull****!

Enumerate
17-03-2010, 07:40 AM
You ignore my point.

This is what you said:


Theres no shortage of Direcotrs doing dodgy stuff and no shortage of directors who have had their actions reviewed by thee courts - why should Huljich be any different?


Then you went on to cite a number of Companies Act breaches being prosecuted, effectively, by Neville Harris's team.

When asked to quantify the harm done by Huljich, you retreat behind a cloud of smoke:



It is not for me to prosecute. It is for our various regulators to determine if there is a case to answer and take things from there.


The Huljich non-disclosure to his board is NOT a crime under the Companies Act. It is not even a crime under financial reporting standards - because it was reported, effectively, to these standards.

My question is: "WHERE IS THE BEEF?"

My assertion is that the Huljich issues are a complete "circus side show". It is dangerous because:

1) It distracts the attention of authorities from the key issues facing not only Kiwisaver but the wider financial market regulation and governance.

2) It implies that things are alot better than they really are: "after all if "Huljich" is the worst issue we have - then things must be pretty rosy". This is a completely false sense of security

You mention the Ministry of Commerce and the Capital Markets Taskforce.

I am still waiting for any evidence that either of these authorities understand the key issues facing NZ capital markets much less have any ideas or energy to apply to the resolution of these issues.

Some of the agencies are working well (Neville Harris' Companies Office and Insolvency Trustee Service). I wonder how effective the NZX has been, in comparison? Why does the Ministry of Commerce and the Capital Markets Taskforce deem the NZX as being independent enough to regulate it's own market.

The more I look at the buggers muddle of NZ capital markets governance and regulation - the more I like investing in Australia.

Alan3285
17-03-2010, 07:57 AM
I guess we'll have to wait and see what really happened here.

I'm happy to admit that we don't have all the facts yet, hence my statements being prefaced with the 'IF', but it is par for the course that every apologist will claim that a fraudster was just 'naive'.

Go and play any street corner game. They'll let you win the first one or two with small amounts to sucker you in, then take you for a bigger amount and you've lost - game over.

Same with betting on pool or similar. That kind of con is called a hustle - sucker them in with a small downpayment then take them later.


In some (fortunate) cases, the hustler is rumbled or grassed up before executing the fraud, and they can claim they lost out, and were just naive.


Alan.

Enumerate
17-03-2010, 08:02 AM
I totally agree. Indeed in Lianne Dalziell we had a Minister who twiddled her fingers while Rome burned. She failed to put a lid on that pool of sharks.


I agree with this point, completely.


However what we have is two financial environments.

This point is also true.

However, we have only one market regulatory and governance framework. It's basis in statute is complex and responsibility for enforcement is spread over a number of public and private agencies. To describe the performance of these agencies, you would have to use the word "uneven" (that is, if you are being polite). I would prefer the words "hopeless", "lazy" or "incompetent" to describe some of these agencies.

I think the solution to the problem is this:

1) Separate the policy making function of MED, Commerce, Treasury, IRD (in terms of capital market governance and regulation) into a single Ministry (the Ministry of Macroeconomics).

2) Take the operational units of MED, Commerce, Treasury, IRD, NZX (in terms of capital market governance and regulation) to a new Ministry (The Companies Office)

3) Make Neville Harris responsible for this new Ministry - and things will get done. (I cite his creation of the National Enforcement Unit - a very successful "police" function across the Companies Act - a major recent development - very effective where other agencies have been very ineffective).

The Minister of the "Companies Office" would get a viable policy framework (hopefully) but would get solid advice and commentary from a single organisation (the "Companies Office") at a practical operational level. This latter advice is the key to solving our market governance and regulation problems.

minimoke
17-03-2010, 08:08 AM
The Huljich non-disclosure to his board is NOT a crime under the Companies Act. It is not even a crime under financial reporting standards - because it was reported, effectively, to these standards.

My question is: "WHERE IS THE BEEF?"
Enumerate
While you worry about the greater scams in the financial markets (of which I share your concerns) lets not loose site of those yellow flags of warning. We could easily spend all day disceting the KiwiSaver Act, the Superannuation Schemes Act, the Fair Trading Act and we could even discuss S131 of the companies Act which requires a Director to be honest.

But at the end of it all what we all want, I suspect, is a market in which there is honesty, integrity, legal compliance and confidence for the punters. Huljichs various actions (non-disclosure to Directors, investing in his own IPO's, investing "recklessly in NEW, putting in his own cash into units, topping up losses, fuzzy dislcoure statements/prospectus, experience in the sector) don't, in my mind insprire such confidence. If there is nothing wrong with his actions so be it - but why should we have shareholder cash and taxpayer funds used to prop up such an arrangement.

Enumerate
17-03-2010, 08:17 AM
In some (fortunate) cases, the hustler is rumbled or grassed up before executing the fraud, and they can claim they lost out, and were just naive.


Alan, you are implying Peter Huljich is a fraudster. There is not even a prima facie case to support this assertion.

It is this continued "demonisation" that I take issue with. Focus on the key issues, instead of the "side show circus":

1) Kiwisaver fund disclosure and reporting needs to be improved.

2) Further, this reporting needs to be normalised across all funds to allow comparisons to be made with the need to employ accountants for months on end to normalise the reports.

There are already standards for the reporting. IFRS has all the tools - we need an Kiwisaver XBRL schema to define the semantics of each element to be reported. This does not exist - questions should be asked as to why?

There needs to be formal compliance processes and procedures. Fund managers attesting to the controls they have in place and a public register of these attestations and reports. This does not exist - why?

There are default funds who do not even have the BASIC CONTACT DETAILS of their Kiwisaver subscribers. Clearly, this is a major issue. Where is the commentator outrage? What actions are being taken? A basic governance issue, in accounting terms, of the setup and administration of Kiwisaver funds. Blank stares all around from those who should be acting.

minimoke
17-03-2010, 08:26 AM
I would be happy to be "conned" in this fashion. If losses in the portfolio were repaired by a wealthy investor - this is the type of fund I would be very interested in.
.
On the face of it we probably all would. But reality is somewhat different. Wealthy investors Mr's Watson and Hotchin offerd to stump up $20m to repair losses to Hanover folks - but they didn't share your apparent happiness to be conned. And look where that got them. In the meantime we have Hotchin and Watson treated as the devils spawn but Huljich is the new mesiah - can't figure that one out!

Enumerate
17-03-2010, 08:34 AM
If there is nothing wrong with his actions so be it - but why should we have shareholder cash and taxpayer funds used to prop up such an arrangement.


I agree. Huljich's actions must have consequences. Brash et al have acted ... the punishment seems to fit the crime.

Is there something deeper? Is this a symptom of fraud? It is my assertion that:

1) We lack proper disclosure and enforcement mechanisms to followup on this. This applies to all Kiwisaver funds. It is also a failing of the wider NZ capital markets sector.

2) We need to solve the wider problem of disclosure and accountability in a structural way. Reducing matters to personalities and engaging in "witch hunts" is NOT a structural solution to NZ's problems.

In the scheme of things the Huljich issue is minor. It is an error of omission - only on fringe of section 131.

Meanwhile, nothing is done to deal with the fundamental structural issues facing the sector. In fact, there is not even an informed dialogue, on these issues. This point is where we differ - I think that responsibility should be taken by the core agencies with Kiwisaver oversight - initiatives for overall market reform (policy, governance and compliance) are required, with urgency. This is the key message from the Huljich incident.

At a personal level, I think Peter Huljich has been demonised in an outrageous fashion. I think many commentators "who have thrown stones" to make "entertaining" stories have played the NZ investing public for fools. Do they really think that the structural issues of the sector can be addressed by tarring and feathering Peter Huljich? This is either lazy thinking or a further betrayal the NZ investing public - my view tends to the latter.

minimoke
17-03-2010, 08:37 AM
Brash et al have acted ... the punishment seems to fit the crime.

???? Peter keeps his day job and Dad gets a new one!

Enumerate
17-03-2010, 08:39 AM
Wealthy investors Mr's Watson and Hotchin offerd to stump up $20m to repair losses to Hanover folks - but they didn't share your apparent happiness to be conned.


Seriously, Mini. Do you really claim equivalence between these two situations?

Enumerate
17-03-2010, 08:42 AM
???? Peter keeps his day job and Dad gets a new one!

Again, not true. Peter has had the "bike" taken away from him - not just simply the training wheels reattached.

minimoke
17-03-2010, 08:48 AM
Meanwhile, nothing is done to deal with the fundamental structural issues facing the sector.

Whats that old saying. "How do you eat an elephant? One bite at a time". Same thing here. There is no way that solving the enormous woes of our financial systems are going to be solved easily. But what we can do is take small victories along the way. We can say "that is unacceptable" in such a way that serves a warning to others. If that can be backed by regulatory action then the message is stronger. But if we let Huljich away with it, then thats a start of a whole new cancer - a few wee cells just waiting for the envornment to multiply and before you know we've got secondaries and basically we're **cked all over again.

minimoke
17-03-2010, 08:50 AM
Again, not true. Peter has had the "bike" taken away from him - not just simply the training wheels reattached.
Wheres the consequence there if he still gets to play in the lolly shop?

Enumerate
17-03-2010, 09:02 AM
.. what we can do is take small victories along the way. We can say "that is unacceptable" in such a way that serves a warning to others.


I think we agree on the desired endpoint. The Kiwisaver "market" needs a high degree of transparency and integrity.

- Your view is to be "tough" on any perception of malfeasance. Build a set of "gallows" and "hang 'em high".

My view is that we need a solid foundation of governance and enforcement (it would also help to get the polices right).

- Make sure the foundation of the gallows is built on a secure foundation. Make sure the people you do "hang" have been proven to have done something wrong.

Enumerate
17-03-2010, 09:08 AM
Wheres the consequence there if he still gets to play in the lolly shop?


"Let the punishment fit the crime". My personal view is that "Dad" (Brash) has acted quickly and to full measure (perhaps even over-full measure).

What more do you want? As I have pointed out, the weakness of our general market governance, in general, and Kiwisaver, in particular, means that a full formal legal initiative would likely result in an embarrassing defeat for the enacting authority. This would have the effect of weakening the integrity of the Kiwisaver fund industry because it would doubly underline the structural weakness of financial reporting obligations in the sector.

The Americans have Sarbines- Oxley, we have ....

minimoke
17-03-2010, 09:14 AM
Seriously, Mini. Do you really claim equivalence between these two situations?
Of course there are paralels. Its just that they get murky when the rules are unwritten and the motivations unknown.

You seem think that Peter is a good bloke, a kind hearted soul with the best intersts of his investors at heart. Fair enough, your entitled to your view. But his act of generosity is virtually unique and unheard of in the world of finance and should, in my mind be treated with a great deal of scepticism. We have sharlatons out there who clearly show their teeth, others prefer to masquerade behind some celebrity mask - but some how Peter stands aloof and above all this?

Why should I be sceptical - well lets look at the time line and feel free to correct me if I'm wrong:
- March 31 2008 during the year personal cash paid in and no one told
- March 31 2009 during the year more cash put in and no-one told
- early Feb Securities Commision staff express concerns about the reporting of historical investment returns.
- mid Feb Huljich reissue Investment Statment
- Late Feb the Board discovers they have not been fully informed
- Early March 2010 Hulich takes responsibility

minimoke
17-03-2010, 09:16 AM
My personal view is that "Dad" (Brash) has acted quickly and to full measure (perhaps even over-full measure).

The "dad" I was referring to was Peters paternal father - Huljich Senior

Enumerate
17-03-2010, 09:27 AM
Why should I be sceptical - well lets look at the time line and feel free to correct me if I'm wrong:
- March 31 2008 during the year personal cash paid in and no one told
- March 31 2009 during the year more cash put in and no-one told
- early Feb Securities Commision staff express concerns about the reporting of historical investment returns.
- mid Feb Huljich reissue Investment Statment
- Late Feb the Board discovers they have not been fully informed
- Early March 2010 Hulich takes responsibility


As an investor, you are 100% right to be skeptical. This entire episode questions the governance and procedures at HWM. Brash was correct to be concerned and to act. This was done in a very public fashion and is, no doubt, a humiliation of Peter Huljich.

The lesson I derive from this is that we need a higher standard of disclosure and attestation across all of the NZ funds management industry (and even wider into broader financial disclosures.

We do not need a posse of rag tag "deputies" - armed with "wet bus tickets" - in hot pursuit of a tormented Peter Huljich. This is not a solution to this specific problem nor a general solution to our broader problems.

I would further add that the vituperation in the press underlines the immaturity of our fourth estate. It is up to the fifth estate (blogoshpere), seemingly, to put things in perspective.

Alan3285
17-03-2010, 09:53 AM
Kiwisavers may be about to find the hidden hooks in the fine print. According to Huljichs Kiwisaver docs there is no fee for exiting any of their Kiwisaver prodicts. Why then has Brash and Banks written to teh Securities Commision asking for their approval to write a letter to investors.

That approval is sought suggests Huljich don't have the internal skills to manage Kiwisaver according to the legislative requirments. Nor do they have the skill or confidence to make a decision on a simple letter.


Indeed - I totally agree.

If you want to take a bug punt, look at something like NZF - at least that appears to be full disclosed in terms of the risks and *true* rewards.

Alan.

Enumerate
17-03-2010, 10:09 AM
You seem think that Peter is a good bloke, a kind hearted soul with the best intersts of his investors at heart. Fair enough, your entitled to your view.


I think there is the very real possibility that Peter Huljich has been demonised, unfairly.

I think Huljich is paying a disproportionate price for the weaknesses of others. If the disclosure rules and reporting mechanism were more clear and effective (as is possible with IFRS and XBRL reporting mechanisms) then this "issue" would be seen to be a "non-issue".

In terms of defending Huljich - I think there needs to be a voice raised in his defense. There are plenty of people calling for the screws to be applied - someone needs to put some perspective into this issue.

I would expect everyone on the thread would agree that disproportionate humiliation, without a right of reply, amounts to not giving Huljich a "fair go".

He has endured his public humiliation, perhaps unfairly. He has acted honorably, in resigning. His organisation has done the right thing by allowing investors to exit to a default fund. Give the man credit where credit is due.

The lesson from all of this, as I have been at pains to point out, is the weakness of our governance/compliance framework. This is where the attention is needed.

Enumerate
17-03-2010, 10:14 AM
Kiwisavers may be about to find the hidden hooks in the fine print. According to Huljichs Kiwisaver docs there is no fee for exiting any of their Kiwisaver prodicts. Why then has Brash and Banks written to teh Securities Commision asking for their approval to write a letter to investors.

That approval is sought suggests Huljich don't have the internal skills to manage Kiwisaver according to the legislative requirments. Nor do they have the skill or confidence to make a decision on a simple letter.




If you want to take a bug punt, look at something like NZF - at least that appears to be full disclosed in terms of the risks and *true* rewards.


*sigh*

Do you two guys practice archery? The reason I suggest this is that you seem to be very skilled with the "long bow".

minimoke
17-03-2010, 10:20 AM
Indeed - I totally agree.

If you want to take a bug punt, look at something like NZF - at least that appears to be full disclosed in terms of the risks and *true* rewards.

Alan.
Is that the NZF where Peter is a Director and according to theri website "Peter is the Managing Director and Chief Investment Officer of Huljich Wealth Management, one of New Zealand's leading KiwiSaver providers. He has extensive and specialist knowledge of the financial markets with over ten years experience successfully investing in New Zealand, Australia, Europe and the Americas. His understanding and familiarity of the securities industry complements the strengths of the current Board. In addition he is a non-executive Director of Finance Direct and Sugar International Limited. "

Shouldn't that read. "Peter was the Managing Director and Chief Investment Officer before his “resignation” due to his failure to alert other directors of some of his own activities. HWM was one of NZ's leading KiwiSaver providers until Morningstar removed them from direct comparison due to fiddling with funds and they now rank pretty much bottom of all funds over the past three months performance. He has successfully invested in other companies (especially IPO's he has an interest in and the use of funds where he is Investment Officer. His understanding and familiarity of the securities industry is particularly useful when he wishes to move funds between related parties. His strengths (especially steel balls when investing in illiquid companies) compliments the Board who have overseen a SP of $1.40 three years ago to $0.20 now - which of course is only of use if people were buying and there are none of those around.”

minimoke
17-03-2010, 10:24 AM
*sigh*

Do you two guys practice archery? The reason I suggest this is that you seem to be very skilled with the "long bow".
Practice makes perfect - but not when wearing beer goggles (ooooh that Peter looks a bit of all right) nor rose tinted glasses (everything is fine and dandy within HWM)

minimoke
17-03-2010, 10:32 AM
I would expect everyone on the thread would agree that disproportionate humiliation, without a right of reply, amounts to not giving Huljich a "fair go".

He has endured his public humiliation, perhaps unfairly. He has acted honorably, in resigning. His organisation has done the right thing by allowing investors to exit to a default fund. Give the man credit where credit is due.

The lesson from all of this, as I have been at pains to point out, is the weakness of our governance/compliance framework. This is where the attention is needed.

*Sigh* If Peter chooses to swim with sharks he should expect to get bitten.

And "His organisation has done the right thing by allowing investors to exit to a default fund" give me a break. They have to - its a legal requirtement for petes sake. Kiwisaver punters already have the right to jump ships whenever and however they like - there no requirement for them to seek the permission of their provider. WHM can't give that which is not theirs to give - no matter how they dress it up.

Alan3285
17-03-2010, 10:48 AM
Is that the NZF where Peter is a Director and according to theri website "Peter is the Managing Director and Chief Investment Officer of Huljich Wealth Management, one of New Zealand's leading KiwiSaver providers. He has extensive and specialist knowledge of the financial markets with over ten years experience successfully investing in New Zealand, Australia, Europe and the Americas. His understanding and familiarity of the securities industry complements the strengths of the current Board. In addition he is a non-executive Director of Finance Direct and Sugar International Limited. "

Shouldn't that read. "Peter was the Managing Director and Chief Investment Officer before his “resignation” due to his failure to alert other directors of some of his own activities. HWM was one of NZ's leading KiwiSaver providers until Morningstar removed them from direct comparison due to fiddling with funds and they now rank pretty much bottom of all funds over the past three months performance. He has successfully invested in other companies (especially IPO's he has an interest in and the use of funds where he is Investment Officer. His understanding and familiarity of the securities industry is particularly useful when he wishes to move funds between related parties. His strengths (especially steel balls when investing in illiquid companies) compliments the Board who have overseen a SP of $1.40 three years ago to $0.20 now - which of course is only of use if people were buying and there are none of those around.”

You know - I think it might be!

:p

Enumerate
17-03-2010, 10:50 AM
And "His organisation has done the right thing by allowing investors to exit to a default fund" give me a break. They have to - its a legal requirtement for petes sake. Kiwisaver punters already have the right to jump ships whenever and however they like - there no requirement for them to seek the permission of their provider. WHM can't give that which is not theirs to give - no matter how they dress it up.

They certainly do not have to write these investors a letter pointing out this right.

I presume that as part of this will be a process to make the elected transfer, should the investor require it, as seamless as possible. Perhaps it is also an opportunity to give HWM a "right of reply" to all the approbation - perhaps this is the reason for clearance with the Securities Commission - not some inability to come to terms with the terms of the Kiwisaver regulations, as they stand.

I feel that we now have uncovered the nub of the issue: you see Peter Huljich as deceptive; I see him, at worst, as being naive. You want to see him punished (for uncatalogued crimes, I would add); I see that he has already paid a high price disproportionate to the "crime".

I think the most profitable line of debate is with the wider and more abstract issues concerning market governance and compliance.

I think that we might look for detailed coverage of the Peter Huljich "crimes" in the "Women's Weekly". I doubt we will seem much of substance in the "NBR" or the "Independent".

Alan3285
17-03-2010, 10:58 AM
I feel that we now have uncovered the nub of the issue: you see Peter Huljich as deceptive; I see him, at worst, as being naive.



I think that probably about right.

I don't *know* that he has / was deliberately deceptive, but my view is that anyone who is acting in a position with a fiduciary duty should always act in a way that is completely open and honest, and absolutely above and beyond reproach.

Whatever the intent, patching up the losses and reporting the fund's performance as if those losses had never occured (rather than reporting them as being low / losses and then saying that they were made up by the 'manager') falls so far short of what is expected as to bring into question the integrity and motives of the manager.

As I said above, the hustler that is caught before executing the hustle is very hard to differentiate from the truly naive. I prefer to play it safe with my and other people's investments and when I see such behaviour, it is 'game over' even if that means that the 'naive' manager suffers - but then do we really want people's investments managed by someone who is naive?

Alan.

minimoke
17-03-2010, 11:24 AM
I feel that we now have uncovered the nub of the issue: you see Peter Huljich as deceptive; I see him, at worst, as being naive. You want to see him punished (for uncatalogued crimes, I would add); I see that he has already paid a high price disproportionate to the "crime".

I think we can both agree Peter has been frugal with the truth.

He can't be described as "Naive" - he is publicly described as a highly experienced player. He's a MD and Chief Investment Officer. He has extensive and specialist knowledge. he has over 10 years experience. He has an understanding of the securities industry. Is that all bull**** or trite spin best suited to the pages of Womans Weekly. If someone can have all that experience and still be "naive" then there is no hope for our financial markets.

I have no particular desire to see him on the gallows. Fat chance. You can fleece investors of $15m and get Home D so the very worst peter could expect is a sunday lunch banishment from his restaraunt which HWM spend investor funds in. What I do expect though, is in a new market, where there is any whiff of impropriety that it be properly investigated and appropriate action taken from there. Investors should have an environment in which they can be confident. Having a culture that enabled door-to-door selling doesn't do it for me nor do Peters activities; Brashes attempt to get the Commision to triple check his letter doesn't do it either. There are enough flags flying around HWM for me to want to stay well clear.

(Enumerate - your not Peters mum by any chance?)

Enumerate
17-03-2010, 11:26 AM
... the hustler that is caught before executing the hustle is very hard to differentiate from the truly naive.

For me, to sacrifice the good name of one man to expose ten hustlers is vastly too high a price to pay.

Enumerate
17-03-2010, 11:35 AM
There are enough flags flying around HWM for me to want to stay well clear.


You, Alan and me seem to be the only ones interested in this thread. (We do make up in vehemence, what we lack in broader participation).

I propose to leave Alan with the last word:


...the hustler that is caught before executing the hustle is very hard to differentiate from the truly naive. I prefer to play it safe with my and other people's investments and when I see such behaviour, it is 'game over' even if that means that the 'naive' manager suffers - but then do we really want people's investments managed by someone who is naive?

Arthur
17-03-2010, 01:11 PM
Why all the media Hype?

In my opinion....
Gareth was sick of explaining why his performance was so crap compared to the market and particularly compared to Huljich . He saw a chance to stiffarm the opposition and discredit the non Gareth industry (his performance put lie to his other rantings about returns) . As an aside is raising money without a valid prospectus OK now?

The NZ Herald was embarrassed as they had hyped the Huljich performance.

Morningstar and their brainless followers were embarrassed that the general public (and the paper shuffling pointy-heads that think they contribute something to better investment choice) could finally see that they wore no clothes

If Peters sole intention was to deceive the Kiwisaver public why did he compensate the non Kiwisaver investors by a far larger amount than the Kiwisaver investors?

As far as I have read he did disclose his payments to the Trustee. They did nothing with that information.

Even after the removal of the top ups the early Huljich returns seem to better than many in the market. A 3 month comparison in nonsense.

If Peter was still there I would consider switching to Huljich. He obviously had the ability to think outside the box. Making money on the likes of the Nuplex issue seems smart to me.

I'd rather that I had an investment in long term growth prospects like NEW Image and Diligent than the likes of Telecom that many other fund managers buy. It is a long term retirement investment - I want growth from equities.

The default providers should have higher standards. - They have made bucket loads of fees on the basis of being default providers. If they accept the benefits there should be a cost attached, If all the rules are equal all default investors should be spread to all providers, not just a select few.

minimoke
17-03-2010, 02:28 PM
A 3 month comparison in nonsense.

Agreed. Its hard to compare apples with apples though, when over the long term players fudge their books.

Clearly you're not a fan of Morningstar but since we have little other independent comparrison (and no regulated reporting - which is somewhat strange since tax payer money is involved) it still makes interesting reading. Like how Huljich managed to make 11.31% over 2 years in their Growth fund when every other provider (bar one who made 0.78%) made a loss averaging at -3.6%. Some of those losses were up to -5.8% (and Gareth Morgan doesn't rate so high here either!).

So what exceptional skills does HWM have that no other provider has. The two year result must be an anomaly - be it based on stunning skills; amazing good luck or great book cooking.

Imagine going to market saying "we can make staggering returns way better than anyone else - just trust us and send us your loot". In a Ponzi, the spruikers rely on those high returns to suck the next level in. I'm sure all Kiwisaver providers rely on their returns to keep bringing new investors in. Remember thats what Finance Companies used to do - they used to offer fantastic rates - that was until punters cottoned onto this flag after which time the dodgy companies dropped their rates so as to not scare off the punters.

If the Kiwisaver returns were part of NZX I'm sure we'd have a "Please explain" how you get to be 14.7% ahead of your peers. But its not so we don't. So we are left to wonder how one of their investement committee can be so brilliant. After all that person put money into the DIL IPO and that was a total flop. Money has gone into NEW and theres clearly a loss there as well as no liquidity so how is that valued? Which means their other investments must have been absolutley stella - it would be text book stuff. Except of course we can't rely on past returns being a predicter of future returns - and that appears to be coming true in the 3 month results.

peat
17-03-2010, 03:25 PM
You, Alan and me seem to be the only ones interested in this thread. (We do make up in vehemence, what we lack in broader participation).

just pointing out that I am reading every word.... amazed at your perspective Enumerate.... but it is well argued , as is Minimokes so yes an interesting discussion.

As reward is always a function of risk it strikes me that Kiwisaver funds shouldnt really ever out-perform by that much otherwise the manager is playing a bit too much roulette with peoples old age pensions. Fundamentally they should all be relatively conservative I would have thought even when labelled as 'growth'.

jmsnz
17-03-2010, 05:34 PM
I'm with Peat, I am finding this discussing very interesting and think that it is highlighting a number of issues outside of just HWM.

I'm a newbie and basically one of those 'mum and dad' investors often referred to here in somwhat negative tones, trying to learn and get more knowledge to take better care of my money.

Regardless of which side of the argument you take, you would have to be very naive to think that everything is OK with either KS or financial market regulation - there is just too much dodgy stuff going on.

At least we all know real estate agents have a job to do we can still make our own assessment of the product we are buying - no wonder property is the default investment. Financial investment isn't like that, the average punter simply can not get enough (reliable) knowledge without a lot of trust in someone else, be it financial adviser, director/company disclosure, NZX rule enforcement, commerce commission etc

Regardless of the right/wrong of the HWM issue, Joe Average would be right to wonder what is really going on.

Arthur
17-03-2010, 05:53 PM
Surely you jest Peat when you suggest that it be compulsory that we all have a high long term risk, low short term risk Kiwisaver investment. The Kiwisaver investment is long term and most of the money is drip feed in. Have a read up about "dollar cost averaging".

Plug some numbers into "Sorted" and you might decide that it should be compulsory to have an aggressive mandate.

A 20 year old on $20,000 will have 395K at 2%, 588k at 4% 862k at 8%. Even starting at 30 or 40 the amount saved is double with a "risky" 8% return than it is with a "safe" 2% one. In inflation adjusted terms the differences are even greater.

Even the bureaucrats are getting up to speed. I read that they are looking to change the mandate for default providers to "balanced" instead of "capital stable"

peat
17-03-2010, 06:04 PM
well Arthur considering I've spent the last few weeks doing TVM (time value of money) questions for one of my papers I am totally aware of that ... I guess it depends how one evaluates risk exactly... whether we are talking about having say more than half of the portfolio in equities (which would be standard for a growth fund I think) or whether risk means having 13% of that 50% in a company like NEW and another 20% of that in eg Pike River Coal. The former sounds reasonable whereas the latter is what I would consider too risky for a super fund... . IMO a super fund shouldnt really be picking outsiders except perhaps with .001% of a portfolio. but then I'm not a fund manager just some one who has lived through 1987.

peat
17-03-2010, 06:10 PM
Surely you jest Peat when you suggest that it be compulsory that we all have a high long term risk, low short term risk Kiwisaver investment.
this doesnt actually make sense to me but I think I got your drift from the rest of the post

Arthur
17-03-2010, 06:50 PM
The point is Peat that it is an illusion that "low risk" portfolios are safer. In the long term "low risk" Kiwisaver portfolios are expected to be worth only half the value of "high risk" ones. To put it another way the "low risk" portfolio has potentially "lost" 50% of the persons retirement savings. Low short term risk = very high long term risk. Kiwisaver is longterm, hence "low risk" portfolios are far to dangerous to let the general public near. If I ruled the world all Kiwisaver investors with more than 20 years to retirement would default to aggressive funds (for their own safety) and It would be compulsory for the fund managers to invest in venture capital and companies with high potential. Unfortunately the NZ public is far too financially illiterate for that to happen, much to the countries cost.

Alan3285
17-03-2010, 07:38 PM
The point is Peat that it is an illusion that "low risk" portfolios are safer. In the long term "low risk" Kiwisaver portfolios are expected to be worth only half the value of "high risk" ones. To put it another way the "low risk" portfolio has potentially "lost" 50% of the persons retirement savings. Low short term risk = very high long term risk. Kiwisaver is longterm, hence "low risk" portfolios are far to dangerous to let the general public near. If I ruled the world all Kiwisaver investors with more than 20 years to retirement would default to aggressive funds (for their own safety) and It would be compulsory for the fund managers to invest in venture capital and companies with high potential. Unfortunately the NZ public is far too financially illiterate for that to happen, much to the countries cost.

On balance, I have to agree with you on this.

It is actually quite 'risky' (if you include the risk of inflation) to be in a conservative fund for 20 years or more.

Alan.

GTM 3442
18-03-2010, 12:11 PM
The problem is being inthe fund for 20 years.



The sharemarket tanks.

A unit drops from $1 to 50c, the fund rides the price all the way down, and then shows great gains as the unit price recovers to 75c - a 50% gain ! Yowzah ! Terrific !

Nope, it's actually made a 25c/25% loss.

Ah the magic of numbers !

The trick seems to me to be to avoid losses ! When in doubt, get out.

Arthur
18-03-2010, 04:28 PM
The trouble is in the timing GTM 3442. Several studies have shown the average investor under performs the market by a huge market. They say buy low, sell high. They do exactly the opposite and invest at the top or miss the bounce from the bottom. Take a look at the massive funds flows out of managed funds in NZ last Feb/March, just before the big bounce. Even self proclaimed experts like our mates at GMK missed the bounce (all for your own protection of course). There is no reason when the markets are irrationally high, or low that you can't transfer to a different portfolio within Kiwisaver, or even your provider. Its human nature to be greedy at the top and fearful at the bottom.

GTM 3442
19-03-2010, 08:33 AM
The trouble is in the timing. . .

Yep, Arthur, it sure is.

But staying in the fund exposes you to the losses.

I don't know about GMK "missing the bounce".

If they were in at (say) $1/unit, and got out at (say) 90c/unit then got back in at

a) 95c/unit they have a loss
b) 85c/unit they have a gain

If they didn't get out, that's a different story - a straight loss.

The important thing is an exit strategy. Just don't buy it without knowing where your stop loss point is.

And act on it.

minimoke
19-03-2010, 03:40 PM
FWIW and I don't want to show my age here, the Huljich who used to bounce around on Sharetrader many moons ago went by the name 'Long Strangle'.
I wonder what Long Strangle thinks of todays Capital and Merchant criminal charges and civil proceeedings. (Now where did the 2005 Long Strangle go {and all his posts} - but welcome to todays new forum Member Long Strangle.)

peat
19-03-2010, 03:56 PM
Note that :
the long strangle expires worthless if the underlying price is at or between the strike prices at expiration :p

Balance
19-03-2010, 04:53 PM
cmon guys - you wouldn't go to a doctor that didnt have his medical license so why would you use a fund manager that has not sought the gold standard in fund management qualifications, the CFA.

It is a clear breach of the CFA standards to misrepresent your results the way HWM has. If he was a CFA member, he would likely have been harshly disciplined and had his CFA status revoked.

We should make it a requirement for all new zealand fund managers to be CFA's (except for old timers that have seen the 87 crash etc). Would sort out these flash harry's and provide the transparency and accountability we are all seeking...

This explains why the regulators are thinking of doing nothing :

Tycoon's training gets messy
By Deborah Hill Cone
10:30 AM Monday Mar 22, 2010


Peter Huljich seems like a poor little rich kid. He is a mini "big-swinging-dick". A baby master of the universe. A tycoon with training wheels. I may be wrong, of course. But he doesn't exactly do anything to disabuse us of this impression.

He is the son of a wealthy family. He's 32 years old now, but still has the right kind of chin to be a jock at an American high school.

I know this because there's a moody shot of him on Facebook. I have one of those too, but I doubt that my testosterone count is as high as his. Last year Huljich took part in a thing called "white-collar boxing fight night" - where executives get in the ring and beat each other up. Noice.

"We work pretty long hours at Huljich Wealth Management so it is always nice to get out of the office," Huljich said in a promotional interview before going into the ring for his fight.

He boasted that during training he had lost five kilos of fat and put on five kilos of muscle. "One of the highs of boxing training was getting fit and feeling really good and strong. In terms of lows, there are none."

Well that's good Pete, because you'll have plenty of time for getting beaten up now you've resigned as managing director of Huljich Wealth Management.

"In terms of fighting tonight I'd like to thank my family. They don't approve of what I am doing but they are here to support me." Good on ya. But I'm not sure that body-fat ratio is the No 1 topic I want my KiwiSaver investment manager to be obsessing over. Shouldn't their financial prowess be their top priority?

I'd be happier to have an investment manager with thick glasses and borderline Asperger's whose big "wow" was worshipping at the altar of Warren Buffett, rather than a born-to-rule silver spooner who is a regular in the social pages.

I know Huljich is a goneburger since his top-ups of his investment fund came to light - gone before lunchtime and all that - but I somehow don't feel this whole saga should be laid to rest. Yes, the Securities Commission is investigating, but don't hold your breath.

When the Securities Commission does take action, it is usually against a widely scorned perennial commercial hazard such as Rod Petricevic rather than one of the "born to rule" business bluebloods with National Party stalwarts Don Brash and Auckland mayor John Banks in his corner.

How did it happen that a company run by a preppy boy with two big names behind him managed to get people to invest $117 million of their savings in the company's managed funds?

The success of Huljich just seems to reflect the tragic last remnants of the outdated class system that we can't seem to totally shake off. And if I was going to get all Wisharty about this, I would wonder whether the National Party is not working hard behind the scenes to make this whole Huljich thing go away.

I'm sure it wants it to. If the Securities Commission does have an energy drink and decide to take action, it is very difficult to see how that mud won't stick to John Banks.

It is very easy to see how National would not like having leftie Len Brown - a dangerously bland character who doesn't polarise anyone - running our biggest city.

With the general election looking out of its grasp Labour might just throw everything at the Super City instead. Peter Huljich may just be a tycoon with training wheels. But when his tiny wheels fall off, it could still cause a big mess.

Enumerate
19-03-2010, 05:41 PM
Tycoon's training gets messy
By Deborah Hill Cone


This article is an example of the deep problems in New Zealand business journalism.

It belongs in the Women's Weekly, in the gossip pages. It is in no way an analysis of the issues - it is smart a$$, flippant character assassination.

I wonder if Deborah Road Cone lives in Wellington? This is about the level of analysis one gets in the distant provinces, very far from the marketplace.

Balance
19-03-2010, 05:50 PM
This article is an example of the deep problems in New Zealand business journalism.

It belongs in the Women's Weekly, in the gossip pages. It is in no way an analysis of the issues - it is smart a$$, flippant character assassination.

I wonder if Deborah Road Cone lives in Wellington? This is about the level of analysis one gets in the distant provinces, very far from the marketplace.

Yes, market place where Capital & Merchant, Blue Chip, Bridgecorp, Hanover etc makes for serious reading.

winner69
19-03-2010, 06:18 PM
(Now where did the 2005 Long Strangle go {and all his posts} - but welcome to todays new forum Member Long Strangle.)

Yes minimoke -- all Long Strangles posts have gone by the looks of it

Do you just send an email to Vince to get rid of posts .... I have a few that I wouldn't mind deleted

Or maybe a man in a suit came to see Vince and asked to see the full records and then ordered them deleted

Interesting

Steve ... did you keep a copy of these posts?

winner69
19-03-2010, 06:20 PM
Conspiracy theory .... maybe it was Long Strangle that was trying to hack the Sharetrader site a few weeks ago that caused all those problems

winner69
19-03-2010, 06:23 PM
This article is an example of the deep problems in New Zealand business journalism.

It belongs in the Women's Weekly, in the gossip pages. It is in no way an analysis of the issues - it is smart a$$, flippant character assassination.

I wonder if Deborah Road Cone lives in Wellington? This is about the level of analysis one gets in the distant provinces, very far from the marketplace.

Oh come on Enumerate .... lighten up .... its is a good article and Balances comments are probably correct .... except Debra couldn't exactly say that straight out could she

Enumerate
19-03-2010, 06:30 PM
Yes, market place where Capital & Merchant, Blue Chip, Bridgecorp, Hanover etc makes for serious reading.

You do not appear to be able to grasp my point.

If there was a high level of investigative journalism and analysis; Capital & Merchant, Blue Chip, Bridgecorp, Hanover etc would not be able to thrive.

Perhaps you can demonstrate how Deborah Pine Cone's article advances insight or even observation into the Huljich Kiwisaver debacle, after the fact. My view is that I do not wish to waste my time reading Deborah becoming palpably moist over the "bad boy" Peter Huljich. She seems to be strangely attracted to some kind of Mills & Boon archetype of dark brooding tychoon'ling.

It adds nothing in background or analysis. It is self indulgent drivel. What were her Editors thinking ...

percy
19-03-2010, 06:58 PM
.

If there was a high level of investigative journalism and analysis; Capital & Merchant, Blue Chip, Bridgecorp, Hanover etc would not be able to thrive.

As I pointed out in my post 16/3/2010 I sold all my shares in Bridgecorp @ 95cents 0n 11/4/2002 after reading an article on bridgecorp by Chalkie.At the time he was NZ's best investigative journalist.He still is.l !!!His analysis on synlait,Cynotech ,Syft are excellent.His article on Huljich was of his usual excellent standard.Brain Gaynor is also good but only well after the event.

winner69
19-03-2010, 07:23 PM
Yes minimoke -- all Long Strangles posts have gone by the looks of it



Hey mini .... Long Strangle may be have gone and rejoined today but his posts live on in the printable version of the NZF thread

http://www.sharetrader.co.nz/printthread.php?t=1066&pp=40

percy
19-03-2010, 08:08 PM
On sharetrader in2001 there was a poster by name Dimbag or similar.Great fan of Bridgecorp;earnings growth,return on capital everything blue sky.I helped another poster send him a PM warning him,and suggesting he read the comprehensive analysis of Bridgecorp in Unlimited Mag,and to be careful as the accounts were suspect.His reply was very much that the media did not know what they were talking about.He had personaly analysised the accounts and could not see the point of reading the article!!!!
I made a friend take out the $30,000 she had on deposit with Bridgecorp.Her financial adviser was very comfortable with Bridgecorp.So the information was there but no one was interested.
This time Kiwi Saver people should be interested.

winner69
20-03-2010, 05:45 AM
On sharetrader in2001 there was a poster by name Dimbag or similar.Great fan of Bridgecorp;earnings growth,return on capital everything blue sky.I helped another poster send him a PM warning him,and suggesting he read the comprehensive analysis of Bridgecorp in Unlimited Mag,and to be careful as the accounts were suspect.His reply was very much that the media did not know what they were talking about.He had personaly analysised the accounts and could not see the point of reading the article!!!!
I made a friend take out the $30,000 she had on deposit with Bridgecorp.Her financial adviser was very comfortable with Bridgecorp.So the information was there but no one was interested.
This time Kiwi Saver people should be interested.

Dimebag is now an analyst at Macquaries .... or was recently

He was a very intelligent student back then ....... but pretty young .... so hopefully learnt on the way through

Can't beat experience that comes from a grey hairs eh CJ

percy
20-03-2010, 06:57 AM
Dimebag is now an analyst at Macquaries .... or was recently

He was a very intelligent student back then ....... but pretty young .... so hopefully learnt on the way through

Can't beat experience that comes from a grey hairs eh CJ
Thank you winner 69.He was very intelligent.I would expect he would now be a very good analyst.I do feel Enumerate is also very intelligent but could be making same errors.

minimoke
20-03-2010, 10:39 AM
This article is an example of the deep problems in New Zealand business journalism.

It belongs in the Women's Weekly, in the gossip pages. It is in no way an analysis of the issues - it is smart a$$, flippant character assassination.

Totally agree - but where is it going to be printed. If its in the Womans Weekly then its pretty well written and spot on. Surely the Herald or Sunday Star Times or NBR wouldn't dream of putting it anywhere near their business pages. It doesn't even come close what could be deemed investigative journalism. Hopefully they have embargoed it until 10.30 on the 22/3 - this wil give them time to pull it. Other wise its not even worthy to make tuesday's fish and chip wrappper though Deborah might be able to use it to wipe her smart *rse.

winner69
20-03-2010, 11:11 AM
You'd think The Herald is missing an opportunity here and not utilising a resource like Debroah to their fullest

With looks like this maybe Tiger would grant her an interview .... about his business affairs for the Business pages of course

Balance
20-03-2010, 11:42 AM
You'd think The Herald is missing an opportunity here and not utilising a resource like Debroah to their fullest

With looks like this maybe Tiger would grant her an interview .... about his business affairs for the Business pages of course

Haha ... good one, W69.

Is she safe from Tiger though?

Enumerate
20-03-2010, 09:15 PM
You'd think The Herald is missing an opportunity here and not utilising a resource like Debroah to their fullest

She should partner with Mike Hosking - they both seem to be having a perpetual "bad hair day".

Balance
21-03-2010, 08:33 AM
She should partner with Mike Hosking - they both seem to be having a perpetual "bad hair day".

It's the LOOK. Sanctioned no less by the TVNZ's style merchants. Get with the new world order!

Arthur
22-03-2010, 10:58 AM
http://www.huljich.co.nz/?s1=learning%20centre&s2=News%20And%20Events&newsid=824

He makes some good points, shame he did not get any media traction at the peak on the witch hunt.

GTM 3442
22-03-2010, 11:18 AM
The bottom line is that we now have no way of knowing how "good" WHM are at investing.

I'm pleased that nobody lost any money, but I now have no basis to rate HWM's ability to make me money by investing my money for me. Either absolutely, or in comparison to their competitors.

And the thought nags away that if they were so good, why the need for the "top-up" ?

Dr_Who
22-03-2010, 12:12 PM
And the thought nags away that if they were so good, why the need for the "top-up" ?

They want to capture market share by deceitfully making the return look better than their competitors? The ques is, if they can do that, what else can they do in the future?

minimoke
22-03-2010, 12:14 PM
The bottom line is that we now have no way of knowing how "good" WHM are at investing.

Actually you do know how good they are. Huljitch and Brash, in his statement, accept that Peter made poor investement decisions.

Thats is one bottom line for people looking at staying or entering HWM. - They make bad investment decisions - end of story. And they appear not to have systems in place to prevent those decisons being made and acted on.

Its fair to say that other managers will make bad decisons so it is how they manage the error that then becomes important. Some managers accept up front that the market goes up and down and its a long term thing so don't anticipate year on year increases. Others, apparently, waive their fees - and perhaps this action is well known to the affected investors and the Board (I'm not sure if there are any case of such waivers not being fully disclosed).

Or you can give the investors their money back. I'm not sure how many have done this but out of all the managers out there I think Chris Lee has openly given money back. Hotchin and Watson offfered to give $20m back but other than that there's probably only Peter. But if they do give iot back, is it doen in a fully transparent manner or is it doemne on the side. I don't think Peter was fully transparent and the Board did not see the original losses - so thats probably two other things to think about when looking at HWM as an investment vehicle.

Balance
22-03-2010, 12:16 PM
They want to capture market share by deceitfully making the return look better than their competitors? The ques is, if they can do that, what else can they do in the future?

Eaxctly.

Madoff will argue that in 2005 none of his investors lost any money. Took the financial crisis to blow his cover.

Brash cannot justify Banks and him falling asleep at the wheels - the fees were good and they were happy to fall asleep at the boardroom table.

Arthur
22-03-2010, 12:50 PM
Fourth, compensation totaling some $150,000 was made because Peter felt morally, and possibly legally, responsible for some poor investment decisions, not to "boost performance". Can I prove that? Not conclusively of course - motives are never provable. But it's worth noting that the first payment, of less than $9,000, was part of a much larger payment of $1.3 million paid by Peter to those in the Huljich Unit Trusts because he felt responsible to compensate them for a poor investment decision. If he had wanted to "boost performance" in the KiwiSaver funds, spending $1.3 million for a benefit to the KiwiSaver funds of less than $9,000 was a very expensive way of achieving that. (The Unit Trusts were subsequently closed, partly because at the time there was little interest in investing in them and their "performance" was never advertised.)

minimoke
19-04-2010, 01:41 PM
Time for a bit of govt intervention. The Govt Actuary is now requiring Huljich to report quarterly in more detail. This is a clear staemenn that Huljich are being poorly managed. Now we'll wait to see what the Securities Commission comes up with from their investigation. It'll be interesting to see how long John Banks hangs in there - being tied to a dodgy kiwisaver scheme may not do his supercity mayoral aspirations much good.

Alan3285
19-04-2010, 02:30 PM
Time for a bit of govt intervention. The Govt Actuary is now requiring Huljich to report quarterly in more detail. This is a clear staemenn that Huljich are being poorly managed. Now we'll wait to see what the Securities Commission comes up with from their investigation. It'll be interesting to see how long John Banks hangs in there - being tied to a dodgy kiwisaver scheme may not do his supercity mayoral aspirations much good.

Makes me wonder why he didn't take the obvious 'out' when it was there:

"I had no idea that H was doing this - he didn't disclose it to the board, and the internal reporting did not do so either. Therefore, I am resigning as a director of HWM with immediate effect."

Why?

Follow the money?

Alan.

Enumerate
19-04-2010, 06:07 PM
I just wish the Government actuary would get involved in the financial reporting of some of the Finance companies have and are being propped up by the retail deposit guarantee scheme. Maybe a bit of transparency, here, would have saved some of the billion$ that are now threatened.

Instead we have a typical response. If you don't know what to do ... ask for more information. If you still don't know what to do ... ask for still more information.

We have some unsubstantiated comments about how well run Huljich Wealth Management is ... based on .... well ... what?

We have some commentary on Banksie's motivations where I would have thought the most obvious and simplest perspective is that maybe Banksie thinks this is a storm in a tea cup.

Keep it in perspective people ... Huljich is guilty of giving money to his investors ... and a trivial amount, at that.

Why don't we spend more time worrying about that vast stinking toxic pile of spin that is South Canterbury Finance? They can't issue a prospectus ... without a revision. They can't issue a set of accounts ... without revision. They can't even give a coherent view on how bad things actually are.

Where is your Government Actuary? Where is your Securities Commission? Where is the fourth estate?

minimoke
21-09-2011, 01:51 PM
Huljich is guilty of giving money to his investors ... and a trivial amount, at that.

Well, looks like he is going to plead guilty to a charge of misleading investors next week and likely to face complex sentencing in December. Pretty trivial huh?

Enumerate
21-09-2011, 09:17 PM
Well, looks like he is going to plead guilty to a charge of misleading investors next week and likely to face complex sentencing in December. Pretty trivial huh?

Yes, he misled investors in that their returns were GREATER than they could otherwise expect.

So where are the charges against Watson and Hotchkins and a legion of other that their returns were MUCH LESS than expected.

Maybe this is the true value of government regulation of the financial services sector. After all, the retail deposit guarantee worked a treat ... it almost wiped it out.

Xerof
22-09-2011, 09:17 AM
Be it GREATER or LESSER, there is no difference - he has misled investors - those already in the fund were (falsely) fed an illusion that the fund was a superior performer, and potential new entrants may have been (falsely) attracted to choose his fund over another.

I'm surprised to see you Enumerate, of all people, defending his position

Of additional concern is the revelation that this fund had lent money to his brother for a property development in Australia.

Yet another example of snouts in the trough.

I'm disappointed to read the FMA have gone soft on this case - these people need a decent kick in the scrotum

As far as the others go, it's a matter of complexity and timing - their day in court will come

minimoke
26-09-2011, 03:49 PM
<br>
So where are the charges against Watson and Hotchkins and a legion of other that their returns were MUCH LESS than expected.As Mr Hotchin heads to court again today we are reminded that he is still under investigation, as is Watson. Hotchins problem is that he appears to have a range of trusts and its a bit hard to pinpoint just what is owned by whom. Sounds a bit like;Alan Hubbard.Lets remember that Mr Huljich snuck the money into those funds without telling investors he was propping things up when things were going pear shaped.While you might like to see charges laid against Hotchin and Watson (and wheres PriceWaterhouseCoopers in your hit list?) do you remember what Bruce Sheppard said about their investors: ""My new rule is, I'm not going to spend any time with anyone aged over 60 because, frankly, their residual economic value to the rest of the country is so low they should be put through euthanasia programmes right now." Those investors were "idiots who wouldn't recognise intelligent questions if they bit them on the ass".His words then still ring true today: ""There's an endless stream of lunatics out there that are intent on feeding their money back into the sector you just saw 16,000 do it yesterday." There's a lot to be said for legislating against stupidity - but in the meantime the gullible remain prime targets from those who think they know better.

Balance
26-09-2011, 05:51 PM
Mini, maybe we should not be so harsh with the oldies when we consider how the big banks and financiers, staffed by high paying and supposedly highly intelligent staff, repeat mistakes after mistakes?

The latest Greek tragedy is a good example of the mindless lending by such *ankers - they actually believed that because Greece belonged to the EU, it cannot go broke - so they lent and lent.