Cabaret - the musical - by Auckland Theatre Company: A Real Great.

The case of the missing victims...

So that I don't have to keep saying 'the alleged' all the time let's talk about a hypothetical case which has similarities to this one, but which is not exactly the same.

Say Daisy Funds tops up it's fund (for whatever actual motive) but this has the effect of enhancing returns to members. It gets caught, apologises, and offers a variety of make-ups, such as free switches to members.

This has been called a 'victimless' crime.

It isn't.

There are at least two classes of victims. The first is members of the scheme. Although they have lost no money (in fact, the reverse is true) they have been robbed of certainty in one of the few real quantitative measures of a fund manager: performance. Like it or not , many do consider past performance to be a guide to the future. They cannot use that with confidence.

The second category of victims is one which won't get a lot of sympathy, but has a larger reason to be unhappy. They have suffered real financial harm. It's other fund managers. They should rightly be beating down the door of the Securities Commission waving lit torches and pitchforks demanding justice. They spend a fortune complying with the Securities laws and regulations and they suffered by losing customers to Daisy Funds because of the effect of inflated performance. While hard to quantify, that effect must have been there. Without a strong message to the effect that returns must be real, we start off down a path that leads to Ponzi schemes.


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Nice one Russell. Yes you are right, particularly about the second point.
The point I was trying to make is that it wasn't just one man doing something which was wrong - others knew about it too.
One mentioned happens to have many KiwiSaver and fund managers as clients.
Prosecute, but prosecute all those involved - not just the high profile A-lister.

Russell Hutchinson

Good point Philip, they need to be impartial and pursue without fear or favour.

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