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And the Australian securities authorities need to do some serious soul searching as to why a guy with a mere $47,000 in his pocket was allowed to purchase secur

by tici_88 17y ago

And the Australian securities authorities need to do some serious soul searching as to why a guy with a mere $47,000 in his pocket was allowed to purchase securities that leave him with a A$94mln liability - without even having the money at hand. >"The reasons for creating such a security are beyond the scope of this post, but suffice it to say that stapled securities offer certain tax benefits." And are those "stapled units" another byzantine financial product designed to work around an even more byzantine tax system? I am curious if such financial products would even make sense in a fair, flat tax system.

netsp 17y ago
I suspect it's not just tax systems these 'Byzantine' products are designed around. It's also getting around the various regulations around who can invest in what, accredited investors, investment grades, etc.
danprager 17y ago
I put it down to a limitation of the Aussie (and other) stock exchanges. The shares had dropped to $0.01, when their true value was negative, given the stapled obligations that they carried. Bolton should have been paid to take on the debt in the first place. A whole lot of other people apparently made the same transaction unwittingly, without reading the fine print, as it were. The sellers of the $0.01 shares were paid a peppercorn and washed their hands of the debt. I reckon this is a problem for the regulators. Once the shares dropped below the value of the remaining obligations (give or take) a fairer price would be negative. Alternatively, trading should be suspended because there's a fair argument that the company is insolvent at that point. Instead, this fact was hidden behind a little "complexity" and inadequate rules. Bolton just took advantage of a broken situation.
- greendestiny 17y ago
  The stock exchange can take plenty of actions against a stock and from a lay perspective it sounds like they should have.

by tici_88 17y ago

netsp 17y ago

I suspect it's not just tax systems these 'Byzantine' products are designed around. It's also getting around the various regulations around who can invest in what, accredited investors, investment grades, etc.

danprager 17y ago

I put it down to a limitation of the Aussie (and other) stock exchanges. The shares had dropped to $0.01, when their true value was negative, given the stapled obligations that they carried. Bolton should have been paid to take on the debt in the first place. A whole lot of other people apparently made the same transaction unwittingly, without reading the fine print, as it were. The sellers of the $0.01 shares were paid a peppercorn and washed their hands of the debt. I reckon this is a problem for the regulators. Once the shares dropped below the value of the remaining obligations (give or take) a fairer price would be negative. Alternatively, trading should be suspended because there's a fair argument that the company is insolvent at that point. Instead, this fact was hidden behind a little "complexity" and inadequate rules. Bolton just took advantage of a broken situation.

greendestiny 17y ago
The stock exchange can take plenty of actions against a stock and from a lay perspective it sounds like they should have.