Brokers settle over ISTC bonds

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Elphaba

Guest
Great news for some investors who complained to Financial Services Ombudsman. Some brokers have reimbursed investors who lost all their money in cases where product was deemed unsuitable ( ref:Kathleen Barrington 27th April business news) Where does this leave the credit unions? An entirely unsuitable high risk investment for them; bonds issued by an unregulated financial institution (ISTC) and packaged as a life insurance product by Friends First. The level of risk of the investment was clearly unidentified and it is good to see brokers accepting some responsibility.

I think brokers were dangerously complacent in the boom times, Perhaps they will now be a bit more careful with how they invest institutional money, I'm no expert, but I would have stayed well clear of these financial bonds...
 

kaplan

Frequent Poster
Messages
306
It’s reported the total retail investor losses are c€48m of which €18m represents credit unions losses. http://archives.tcm.ie/businesspost/2007/12/02/story28653.asp

As far as credit unions are concerned the largest loss reported to date is the ESSCU of €10m which is quite a hit – so much it almost wiped out earnings for 2007 – and they still have to write off 2.5m in 2008. Yet another is Castlebar credit union reporting losses of €500k. http://www.mayoadvertiser.ie/index.php?aid=5420

Add to this credit union investments in perpetual bonds of c€247m and you have a crisis emerging of ISIS proportions.

Credit Unions are public interest bodies and their travails the stuff of public scrutiny.

But where is the so called protector of consumer rights- the Financial Regulator. It’s been busy producing yet another banal report lauding its own achievements – which amounts to listing its operational civilities.

One has to agree with ILCU utterances that the IFSRA board does note understand credit unions – they are not alone- Joe Meade’s assessment of a systemic problem with sales of inappropriate products to the elderly was met with an IFRSA repost of “we couldn’t find one” – depends on the questions you chose to ask !
 

kbie

Frequent Poster
Messages
184
It’s reported the total retail investor losses are c€48m of which €18m represents credit unions losses. http://archives.tcm.ie/businesspost/2007/12/02/story28653.asp

As far as credit unions are concerned the largest loss reported to date is the ESSCU of €10m which is quite a hit – so much it almost wiped out earnings for 2007 – and they still have to write off 2.5m in 2008. Yet another is Castlebar credit union reporting losses of €500k. http://www.mayoadvertiser.ie/index.php?aid=5420

Add to this credit union investments in perpetual bonds of c€247m and you have a crisis emerging of ISIS proportions.

Credit Unions are public interest bodies and their travails the stuff of public scrutiny.

But where is the so called protector of consumer rights- the Financial Regulator. It’s been busy producing yet another banal report lauding its own achievements – which amounts to listing its operational civilities.

One has to agree with ILCU utterances that the IFSRA board does note understand credit unions – they are not alone- Joe Meade’s assessment of a systemic problem with sales of inappropriate products to the elderly was met with an IFRSA repost of “we couldn’t find one” – depends on the questions you chose to ask !
This is an old thread but is relevant nevertheless.

I understand the ESCCU, eircom Credit Union, have reached an out of court settlement. The board are to meet and discuss and a letter will be sent to all members, hopefully with good news.
 

Damian85

Frequent Poster
Messages
92
It’s reported the total retail investor losses are c€48m of which €18m represents credit unions losses. http://archives.tcm.ie/businesspost/2007/12/02/story28653.asp

As far as credit unions are concerned the largest loss reported to date is the ESSCU of €10m which is quite a hit – so much it almost wiped out earnings for 2007 – and they still have to write off 2.5m in 2008. Yet another is Castlebar credit union reporting losses of €500k. http://www.mayoadvertiser.ie/index.php?aid=5420

Add to this credit union investments in perpetual bonds of c€247m and you have a crisis emerging of ISIS proportions.

Credit Unions are public interest bodies and their travails the stuff of public scrutiny.

But where is the so called protector of consumer rights- the Financial Regulator. It’s been busy producing yet another banal report lauding its own achievements – which amounts to listing its operational civilities.

One has to agree with ILCU utterances that the IFSRA board does note understand credit unions – they are not alone- Joe Meade’s assessment of a systemic problem with sales of inappropriate products to the elderly was met with an IFRSA repost of “we couldn’t find one” – depends on the questions you chose to ask !

I wouldn't agree entirely with that. The Registrar of Credit Union's branch of the Financial Regulator has been very proactive in setting up Guidance Notes and auditing and advising credit unions in terms of their investment policies, valuation of investments and income recognition.

I would have though that the RCU branch was one of the few creditable achievements of the Financial Regulator.

The perpetual bond issue in credit unions has been in existence long before credit unions came under the supervision of the Financial Regulator in 2003.
 
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