The issue here is FRAUD. If a client has shares then they are 'safe' with the CDSC but a client would lose cash & shares sold without their knowledge.
Solutions?
- CRIMINAL charges against fraud.
- Move to bank-backed brokers e.g. CFCFS & now NIC Capital.
- Move to strong brokers i.e. publicly published & audited financial statements like insurance firms have to do.
- Sell new licenses with 100% of the funds going into the IC fund.
There are buyers for 'new' or 'clean' licenses but there is little interest in existing licenses.
Rumors (& that is all they are) have it that NIC Capital will raise more funds - from NIC Bank - to defray 'bad debts' & 'investor claims' accumulated under Solid Securities. Some NSE insiders claim NIC buying 60% of Solid saved Solid Securities since NIC Bank can't let NIC Capital falter...
2 comments:
On the NIC Capital rumour, I think its almost certainly true.
Another solution which AIB has already implemented is to publish your accounts outside your offices.
The shock of seeing brokers go bankrupt during the most vibrant NSE period (transaction volumes are at their highest level ever even before Safcom) makes you realise how badly these brokers have been ran.
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