2003 began with the Howard Government, in response to the WA Labor Minister, Mr. Kobelke, communications, replying with the comment, "If required, the Government will consider any recommendations makes to improve consumer protection in this area and the Government will consider any legislative change should ASIC identify any regulatory gap" [Edwards].
On a personal note, 2003 has major significance for my wife and I. It was the year in which I became involved in Westpoint. As had so many other people at that time, I watched the “professionals” lose my money year after year - and charge me for the privilege. From late 2002 we had heard a company called Online Super advertising a DIY scheme on TV. My first mistake was I believed Alan Jones (or 2GB) had carried out research on the company. In early 2003 I attended a couple of their seminars before making my first investment in April of that year. I carried out considerable research on the products they offered. The contents of the hyperlink, why I invested, give a reasonable description of my reasons for doing so. The one major mistake I made was not to carefully research ASIC’s ability to protect investors. I the reader can read how I came to invest in Westpoint in the following chapter. My story is little different to wht happened around Australia.
It is interesting to note that the Courier Mail of 11/02/2006 reports one Westpoint staffer complained to ASIC on solvency issues as far back as 2003. Without more specific evidence of the nature of the complaint, no comment - other than ASIC took no action - is possible.
The Cary V ASIC (etc.) document reports another interesting, but puzzling, happening in 2003. Freehills issued a letter to WPC stating the offer of PNs by York Street and Bayview Mezzanine complied with current law, and were neither debentures nor interests in an MIS. As Freehills had already made this claim back in 2001 in reference to Bayshore, and the model had not changed, I am at a loss to understand why Freehills should send this letter to Westpoint at this juncture.
In consecutive months of May and June 2003, Mr. Kobelke sent the third and fourth letters of the sequence mentioned in 2002. Again there is no record of their content, of the replies (if any) received. As stated before, investors were unaware of any concerns the WA Government harbored in relation to Westpoint.
The Care V Freehills ASIC Beck document, which is a copy of document entered into court in the Carey’s against ASIC, one finds that under pressure from ASIC, negotiations were taking place for Westpoint to move away from promissory notes as a funding vehicle for future products. This is somewhat strange as ASIC had issued a no action letter in 2000 on this method of funding and had not publicly indicated they had now problems with this method of funding. No reason is given for ASIC’s change of heart. It is my understanding if ASIC countermands a no action letter there is a defined procedure for doing so, and ASIC must clearly state its reasons. Nothing of this matter was made public. Of course, ASIC, which publicly states the need for disclosure, failed to disclose its intent to stop Westpoint using PN’s as a method of funding.
Once again in 2003, ASIC demonstrated its true attitude to disclosure when it failed to make public a meeting that took place between ASIC and Westpoint at the WA Freehills offices in August of 2003. My source for this information arrived unexpectedly in 2007. A copy of these documents can be found on the website www.InvestorsGroup.com in the sub-section Norm Carey.
Not the least of the curiosities arising out of the last two items is that former Head of ASIC, Jeff Lucy, has been reported a saying ASIC first became aware of problems with Westpoint in the first quarter of 2004!