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2001.

Denise Brailey stated on Channel Ten's David and Kim morning TV show of 2007/05/05 she flew to Brisbane in 2001, and met with the ASIC Queensland Commissioner and his senior legal council to discuss the problems of fissuing the Westpoint Mezzanine Schemes, issued on IM's, without a prospectus. Ms. Brailey claimed ASIC told her the Westpoint Mezzanine Schemes were MIS's, and that people would lose their money.

Why didn't he do something abut? If ASIC Queensland Commissioner knew, how

could the rest of ASIC not have known?

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Hansard records ASIC's Mark Steward admitted, at the Senate estimates committee of 21/05/2006, ASIC began ongoing discussions on Westpoint with the WA Government as far back as 2001.

Why didn't ASIC advise Westpoint investors of these concerns?

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As part of the Financial Services Reform Act of 2001, the Federal Government passed laws mandating an Australian Financial Service Licence(AFSL) holder possess a minimum of PII cover per case for $1 million. The Government immediately disengaged that legislation by disabling the limit per case. While a minority of planners took out very little PII cover, the majority took out reasonable amount of cover. The Government made the further mistake of prescribing the wording of PII policies.

The net result of these actions was whenWestpoint failed, there were so many escape clauses in the PII policies as to render them useless to planners and investors alike.

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Although I don't have the documentary evidence, I rate the veracity of the following information at least a 60% chance of being true because of the reliability of the unnamed source. I believe the name of the Westpoint venture was Paragon. In 2001 the venture held a creditors meeting. Westpoint rescued the situation by offering the Paragon investors free entry into Market Street.

ASIC must have known of this event, but there is no record of it on the Internet, and Westpoint failed to advise investors on this matter before they invested in Market Street.

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2002

The WA Government wrote the first of five letters to  Treasury/ASIC. [Edwards letter].

No action was taken on any of these letters, and the investing public were ever informed of the concerns they contained.

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"The Reserve Bank contacted APRA about the use of the words Boutique Bank on a Kebbel website. APRA rang Kebbel and spoke to person they believed was Neil Burnard, who told them it had been put there by the web designer. The APRA person then wrote a report to her superior, and the matter seems to have died a natural death. The reason why she was unsure of to whom she had spoken was her notes contained the word "spiel". The judge explained in the pretrial of Neil Burnard that spiel is a commonly used term at the beginning of a telephone conversation within APRA in which unimportant information is not recorded. [Neil Burnard Trial Notes]

I can only wonder at how lax procedural matters might be in APRA It would seem that none of this was passed on to ASIC at the time.

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2003

On 01/02/2003 Norton Capital rated Market Street a "BUY".

This was not an uninformed investor making a judgement, it was an ASIC approved

research house

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Factors in my choosing to invest in Westpoint. ASIC's Westpoint investors did not do their homework. It is true that many of them,realising they were not financially literate, sought advice from financial planners. It is equally true that the majority of these planners held an ASIC issued Australian Financial Services licence. ASIC had a clear duty under it's charter to ensure the protection of financial invertors. It it is understood ASIC cannot watch over every individual investor. It can, however, monitor what planners are doing. There is no evidence ASIC ever preemptively attempted attempted to find out what its planners were doing, Instead, it slept in ASIC castle, sure in the knowledge the Government would protect it from all storms.

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ASIC's Mark Steward says ASIC "cat and moused" with Westpoint lawyers in 2003 for months before they realised Westpoint was stalling for time [2006_05_31_TheAge] This in direct contrast to Jeff Lucy's statement in a Senate Estimates hearing that ASIC did not become concerned about Westpoint until 2004.

Mr. J. Lucy, the Chairperson of ASIC has admitted in parliament ASIC became aware of problems in Westpoint in 2003, yet did not approach Treasury to seek immediate changes to the law. The incident quoted happened in a period of peak investing public of anything that might affect investment.

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One former Westpoint staffer said he complained in 2003, and received no response from the watchdog [200_02_11_CourierMail].

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Managers inside Westpoint knew of problems in 2003 [2006_05_08_CourierMail].

Why has ASIC not yet taken steps to prosecute these managers.

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In September of 2003, Westpoint gave ASIC a Power Point presentation of their future plans at the Freehills office in WA. They warned ASIC of the dangers to themselves and investor if ASIC acted against the previously approved promissory note usage. [The Carey document of 30/07/2007 sent to Tony D'Aloisio and selected

Senators]

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2004

The institute, an industry body that includes property valuers, said that about 70 per cent of respondents to its latest six-monthly survey on the property market regarded fringe mortgage-backed trusts with "moderate to major concern". Some concerns related to the need to increase the disclosure by financial planners and developer-sponsored funds, and also the need to increase disclosure of the quality of the loans by the funds [2006_04_19_TheAustralian].

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Mr. J. Lucy admits he knew there were problems with Westpoint as far back as April 2004.

ASIC has a legislative duty to protect investors. Why didn't ASIC halt the sale of Westpoint products while they investigated?

Lucy's statement is in direct contrast to West point's owner, Norm Carey. Carey claims ASIC initiated action against West point in 2003, and West point had given a presentation of West point's plans to ASIC in October of that year at the WA offices of Freehills

[Carey Document].

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