Bridgecorp directors guilty

Bridgecorp was a finance company started in 1993. It went bankrupt in 2007, owing $490m to 14,500 investors. Many investors lost all their savings. They may get back 10c for every dollar they invested. The company offered high interest rates and seemed like a very successful company. The directors drove expensive cars and lived in expensive houses.

However, by 2007, the directors knew the company was in trouble but they did not tell investors. They still encouraged people to put their savings into the company. They did not tell people that the company had missed interest payments. They told lies.

After a four month trial, two directors were found guilty on 18 charges today. These two, Mr Petricevic and Mr Roest are now in prison while they wait to be sentenced. Another director was found guilty on six charges. He is on bail until next month.

Mr Petricevic was a director of two other finance companies in the past. Both of them went bankrupt losing $231m of investors’ money. He, however, has made millions of dollars. Most of this money and assets are owned by family trusts.

Vocabulary – make sure you know these words:

Finance vocabulary
investors
bankrupt
interest rates
interest payments
assets
family trusts

Court vocabulary
charges
to be sentenced
on bail

Question

Why do people put their money into family trusts?






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