Everyone has the right to be stupid and blow their savings – and then to complain bitterly about it afterwards and seek redress if they can blame someone else. But how far should the rest of us be expected to go to protect mugs from themselves or provide recompense?
The thought comes to mind after seeing a couple of examples recently of people who had been very foolish with their money.
![Despite public concerns, Nant kept advertising its scheme of selling barrels of whisky and cattle.](/web/20170425125045im_/http://www.canberratimes.com.au/content/dam/images/g/m/n/v/b/h/image.related.articleLeadwide.620x349.gvhbpp.png/1491866365647.jpg)
Someone claiming to be a small investor reportedly borrowed to buy $450,000 of a single stock: Slater and Gordon. Fail. And there was the disability pensioner who plunged all of a $90,000 inheritance into an investment involving Nant whisky and cattle.
Slater and Gordon made a big mistake with a takeover, a mistake that has it on the edge of bankruptcy. Companies sometimes make mistakes that cost their shareholders money. Sometimes they're just overtaken by events, or by better mousetraps.
The Nant debacle looks considerably worse than that. Anne Davies was blowing the whistle in these pages in February last year but Nant kept advertising its scheme selling barrels of whisky and cattle.
In an update in The Saturday Paper, Davies reported the losses on the Nant investment schemes could run well above $20 million, "yet investors have been frustrated for more than a year as regulators such as the Australian Securities and Investments Commission, the Australian Competition and Consumer Commission and two state fair trading commissions have dodged responsibility". She wrote that a lone policeman in the Queensland stock fraud squad had taken a serious interest.
That's an all-too-common story when shonky investments hit the wall. Far too often, the ones in charge basically get away with it, which is the stuff of making blood boil. You have to feel sorry for the investors and wish our weak watch-puppies had sharper teeth and knew how to use them.
Scumbags like Tim Johnston who ran and substantially got away with the $100 million Firepower "magic" petrol pill con, or Larry Pickering, who made a fortune selling software programs that claimed to pick winners on the race track and stockmarket and now gets his sordid kicks spinning sectarian and homophobic lines for the odious Q Society.
There's a big difference though between an outright scam and an investment that goes sour due to unforeseen circumstances or a bad decision, even a dumb decision. Everyone with a decent share portfolio has some losers.
Such is the sad state of our semi-privatised corporate regulator though that there's more likely to be quick action over the latter than the former. A company being late to tell the stock exchange its numbers aren't as good as previously advertised is more likely to end up in court.
We now have an entire industry devoted to class actions that, at their best, do an excellent job in getting redress for those who otherwise couldn't afford to fight for it, but the industry's bread-and-butter and rich cream comes from chasing corporate ambulances on behalf of select shareholders who in effect sue fellow shareholders when boards and managers get things wrong.
The common thread in the first two examples cited is that the victims placed large single bets they couldn't afford to lose. Whenever any scheme goes belly up, there are sorry stories of people "losing all their life savings" by burying them in a single hole. After all the warnings about gearing and not diversifying, at some point the victims have to share the responsibility for their loss.
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