Great article Bernard,
I have some personal experience from my parents investing intially with SCF, then with Aorangi Securities.
My parents invested in
excess of seven figures in Aorangi. After returning from my OE in the UK I asked them
what Aorangi was and what it invested in. The answer was they didn't know. I asked where the investment prospectus or statement was. Again they didn't know.
They invested in Aorangi due to
Hubbard suggesting they do so. They invested more than $1million into a company they did not understand what it invested in other than "Hubbard had been investing for a long time and has a lot of money, he obviously knows what he is doing".
I believe there were no ongoing statements of balance and fund performance other than the regular payments. As the payments were returning a good percentage return no questions were asked (a la the Madoff scenario).
Like you I believe Hubbard thrives on the VW image. "He is obviously not a crook, look at the old beat up car he drives". If Hubbard had been a flashy suit how succesful would he have been in Timaru?
Luckily I convinced my parents to ditch Hubbard earlier this year. No doubt they are sleeping easier because of that.
Richard
For those interested
http://www.interest.co.nz/opinion/op...angerous-thing