Mendacity, that magnificent Latin word for lies, is in the commission and the omission. Mendacity swirls around the tongue like a voluptuous shiraz. Mendacity. In the Paul Newman-Elizabeth Taylor film of the play, Burl Ives swaggers his way through this scene in which mendacity means different things for each character.
And like the oppressive humidity in Tennessee Williams' play, mendacity still hangs in the air in the financial industry.
As this issue went to press, ASIC had just permanently banned Christos Papaioannou (aka Chris Pappas) from providing financial services following his conviction on fraud charges in the Magistrates Court of Victoria.
Papaioannou/Pappas, an authorised representative of BDO Kendalls Wealth Management (Vic) Pty Ltd (as it then was), withdrew, without authorisation, funds totalling $226,881.44 from several of his clients' SMSFs.
Mendacity by commission of theft.
Elsewhere, in the Federal Court, a five-month case between S&P and 13 local councils has just ended, with Justice Jayne Jagot reserving her decision.
This was the world's first trial of a credit ratings agency with claims and counter-claims about Rembrandt constant-proportion debt obligations, created by ABN Amro and given a AAA credit rating by S&P. The councils lost $15 million of the $16 million they invested in the notes.
S&P's barrister Steven Finch SC argued that investors could rely on ratings, but under "long-established Australian legal principles" they could not later sue the ratings provider.
Justice Jagot pounced on that piece of legal posturing. She asked if that rendered the rating and "the whole business of getting a lot of money" for producing it "meaningless".
Finch responded: "It's not meaningless. It's just attended by conditions which say 'you can't sue me if you rely on it'."
Mendacity by omission of integrity.
Meanwhile, in Canberra, the rats are not deserting the sinking ship. Speaker Peter Slipper is standing down due to allegations of fraud and harassment, and yet he continues to be paid roughly $1000 a day.
In Mosman, Sydney, deputy mayor Belinda Halloran relocates to San Francisco but maintains she can still represent 30,000 people and preside over the council's $40 million budget - all by digital communications.
However, when the Daily Telegraph approached her for comment, she did not reply to emails and she had not updated her Twitter account since September.
Mendacity by insulting the voters' intelligence.
All the rules in the world, in the galaxy, cannot stop people lying if they so choose. Honesty and integrity come from within.
Certainly, the FOFA reforms go some way toward cleaning out the Augean stables, but the various financial adviser peak bodies have a Herculean task ahead of them to educate and internalise honesty.
Clarification:
In the margin lending story that appeared in ifa issue 594, the heading of the boxout and the first paragraph should have read 'without' a margin call.
