Friday 26th of October 2007

Yesterday I spent some time at the EUFA-organised public meeting of people who lost money in Bridgecorp. The aim of the meeting was to discuss what sort of action people who lost money in Bridgecorp (and other finance companies) could take against advisers. The answer to that question appears a little unclear at this stage. What was useful though was to get the feel for what is going on. There were about 70 people at the meeting. Mainly grey haired investors, along with a good contingent of media and one prominent financial planner from Tauranga was spotted down the back taking notes. Unfortunately for the meeting, and those in attendance, a couple of lawyers who spoke took over proceedings and spoke for far too long about generalities. It seemed to me they (at least one) were using it as an opportunity to tout for business. Another is pretty determined to prove that New Zealand has absolutely no investor protection and the people who should be fixing this situation (including the Minister of Commerce and the head of the Securities Commission) need replacing. Much of the talk has been about class action, however it seems this is unlikely. (Class action is where one mistake is made and many people are affected). Rather the talk is group action, where a bunch of people who have had similar experiences band together. An advantage for some in this is that people with more marginal claims maybe able to piggyback off those with more clear-cut claims. While the lawyers were keen for business there are no promises of success. Much of it hinges on what actually happened between the adviser and their client. No doubt any case will be a good test to see how well advisers have been keeping practice notes.