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Credit sailors should call in the commission

July 22, 2010

Credit sailors should call in the commission

By TIM HUNTER – The Dominion Post

Last updated 13:55 06/07/2010

OPINION: If you were told your investment was “in effect sitting on deposit, earning interest” and later found all of it was gone because it was, in fact, held in risky derivatives, would you feel aggrieved?

If you found almost $100 million had disappeared in this way, would you expect an official investigation?

Would you expect compensation?

If this situation sounds familiar you are probably an investor in Credit Sails notes, a complex, high- yielding product marketed in 2006 by sharebroker Forsyth Barr.

The issue raised $91.5m, much of it from risk-averse private investors and charities drawn to its promise of 100 per cent capital protection and a likely income stream of at least 8.5 per cent. Instead they ended up with a 100 per cent loss.

So far, however, rather than an investigation and compensation, investors have received only apologies and expressions of regret.

Their situation contrasts with that of investors in two complex, high-yielding funds marketed by ING and ANZ bank. After a vociferous campaign by an organised investor group, ING accepted the funds were higher risk than investors were expecting and agreed to compensate them for much of their loss.

Click here to read the complete version of Credit Sailors should call in the commission, by Tim Hunter, 6 July, 2010

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