INVESTORS advised to wear “Protective” HELMETS.

It has been suggested that Investors wear “protective gear” to assist in the damage caused through accidental, undue care or deliberate cases involving losses of retiree's investments whether it be in mortgage or superannuation type of securities.

Graham MacAulay wrote…on behalf of Westpoint Investors Group….and reflects the concerns of all other Investors.

The Abject Failure of ASIC.

Dear Sir,

Mr Lucy, it is now time for you to publicly admit ASIC, by its negligence and incompetence, has aided and abetted in the loss of Westpoint investors' capital, smashed lives, caused divorces, people to lose their homes, and caused people to take their own lives (suicide is an ugly word).
A strong statement? Yes, but let's review a short, but by no means exhaustive, list of ASIC's failures.

The release of the details of the letter of 2000 informing Westpoint that ASIC had examined the promissory note model and would not take action against Westpoint in the future on this matter drove the final nail into the ASIC credibility coffin.

Denise Brailey, in 2001, warned ASIC about the likelihood of major investor losses if it allowed the promissory note model to proceed.
ASIC ignored her warnings, did not inform the investing public of them, and did not put a monitoring system in place to ensure the protection of investors. The reforms of 2001 decreed it mandatory all AFSL holders purchase adequate Personal Indemnity Insurance. The Government disengaged this provision.
The only reason for such an act is that it would reduce the profits of AFSL holders. While ASIC made a strong statement to the Government in 2003 on the matter, it occurred two years after the legislation should have been in place. ASIC did not raise the matter again. As yet, the investing public remains unprotected - and will remain unprotected for at least another six months.

The West Australian Department of Consumer Affairs and Employment protection wrote to the Treasury in 2002 of their concern of the lack of investor protection in the Westpoint Mezzanine Companies. Treasury gave ASIC a copy, and the matter passed on to a committee where it died.
ASIC never issued a public statement alerting investors to this warning.

AS1C claims it first became aware of problems with Westpoint in 2003, and ASIC's Mark Steward told a Senate Committee in 2006 he did not take the matter to parliament, but played "cat and mouse" with Westpoint lawyers for months before realising Westpoint was stalling.
While ASIC played a "cat and mouse" game, investors poured money into Westpoint. Once again ASIC failed to inform the investing public.

ASIC took Westpoint to court in 2004 - and lost three quarters of the points in dispute.
During that case, the WA Supreme Court instructed ASIC to write to the investors in the two companies chosen as the test case.
ASIC sent out a technical document, not understood by investors, and -without a supplementary explanation in laymen's terms. ASIC ignored the investors in the Mezzanine Companies not involved in the test case.

ASIC Media Release 04 -157 clearly states ASTC ordered Westpoint to cease using promissory notes in future investment products.
If ASIC claims ignorance of the 2000 agreement, then it displays ASIC's incompetence in record keeping, internal communications, or both. Neglecting any reference to that document, how could ASIC have the legal power to demand Westpoint not use promissory notes in future offerings when there had been no change in legislation since the first Westpoint promissory note issue?

Kebbel posed as Kebbel Investment Bank for almost five years (complete with brochures, flyers, and other stationery) before APRA finally told them not to do it again in 2005.The bank facade employed by Kebbel induced the public to invest hundreds of millions of dollars into Westpoint.
As they operated publicly for so long under the noses of the Corporate watchdogs, what does it say about the ability of both APRA and ASIC to protect consumers?
Why did APRA not prosecute those involved?

ASIC brought Neil Burnard back from the United States in 2006.
Why did ASIC have to rely on the evidence in the affidavits from Joe Felice and myself so that ASIC could keep his assets frozen? Surely between December 2005 and June 2006 ASIC had sufficient time to produce a mountain of evidence without our help.

Both parties appealed the judgment of the case begun in 2004, and it was not until June of 2006 that the judge announced his final ruling: Westpoint Mezzanine Companies were never regulated products.
This once again demonstrates ASIC's incompetence, as they must have examined the matter carefully in 2000 to provide the advice to Westpoint. The decision proved ASIC misled the investing public, who believed they had the protection of ASIC regulated products.

The above abbreviated history demonstrates ASIC's inability to regulate the market and protect consumers. It also indicates ASIC never once considered consumer protection.
Despite ASIC's claims that they couldn't legally take action against Westpoint, IMF's …Hugh McLernon claims ASIC always possessed the power to close Westpoint down.
Neale Prior, of the West Australian newspaper, speaks of “ASIC's reign of error" While it is clinically accurate, it doesn't portray the financial loss and emotional trauma ASlC's incompetence/negligence caused Westpoint investors. The government created ASIC to regulate the market and protect consumers. It failed both these aims. and in the process shattered the lives of investors, the majority of whom will never recover from the damage needlessly inflicted upon them.

Before further tragedies occur in the lives of Westpoint investors, please show compassion and integrity: request the Prime Minister direct the Government repay the capital of each Westpoint investor, along with interest at deeming rates, from the huge surplus ASIC returns to Treasury each year.

Please remind him; by failing to implement the PII clauses, the Government smashed the lives of many innocent Australians.

Graham MacAulay
President: Westpoint Investors Group
DATE 13 July 2006
Email [email protected] Mobile 0411 141 888

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