There is a reason that you can make more inn equity markets, it's because the risks are higher and you can lose more. This gets turbo charged with smaller companies were internal controls are not as strong.
Put it this way behind every spectacular corporate blow up is a big name exchange, regulator and auditor. There is a perception with some that ASIC and the ASX conducted detailed reviews on the perf shares and "signed off". Think about that for a sec. How many stocks are listed, how many companies are under ASIC control and what do you think the resources are? Auditors you'd hope for more but you can investigate every transaction and if the big 4 get it wrong how can some of these small co's get it right.
Bottom line, if some mgmt team wants to do the wrong thing, it is a fact that you wont catch them all before time (in fact catching any beforehand would be remarkable).
With that said, turn it around, if you are a regulator or an exchange and you see something questionable that points to malfeasance what option do you have but to come down hard. If the co has acted in good conscience then explanations should be easily provided - I still can't see why they weren't here. Why so adversarial, why these red herrings about spit balling, treasure troves and conspiracies. Why could mgmt not just escrow their stock?
Again, at the end of the day, if you want bond like returns buy a bond, if you want higher returns come with higher risks and don't kid yourself about the protections other should give you.
* The above is delivered with 100% good intentions, that shareholders dusted hard earned funds gives me no joy and is terrible. All I believe is that too many believe that they should follow that co with blind hope, that others should have prevented those losses, and, as a result that fingers are generally pointed in the wrong directions. I am always hardest on the mgmt of the companies I own I have rarely seen that in this forum.
SP1 Price at posting:
$1.07 Sentiment: Sell Disclosure: Not Held
