Ask Paul: I'm a pensioner and my portfolio is now worth 4 cents a share

Dear Paul,

Is it possible to give me some advice please? Some time ago, I invested in Australian Bond Exchange at 65 cents a share on the promise of a price increase to 75 cents within a short period.

Instead, they are now worth 4 cents a share (at the time of writing). I am a pensioner and this has hurt me very much. Is there anything I can do? For example, force them into receivership. I am so annoyed. - Trevor

Goodness, Trevor, this is pretty ugly. I had never heard of Australian Bond Exchange, so I've been doing a bit of digging around. It certainly has some colourful reviews and a share price that 
has sunk like a stone. The ASX shows its shares have fallen by 96.78%.

I can understand how you feel. ASX listing rules, external auditors, plus all the checks and balances around things like 'trading insolvent', will certainly take care of issues like insolvency.

The most recent quarterly activity report, listed with the ASX, shows a sizeable loss but still a reasonable amount in 'cash and cash equivalents'.

To no surprise, the company states that it is undertaking a 'cost reduction program'. Apparently, 'client engagement and integration into various partner firms is not as quick as expected'.

What interests me more, though, is the 'promise' of the share price increase to 75 cents in a 'short period'. Was that professional advice and was it in writing? If so, I would recommend a call to the Australian Financial Complaints Authority (AFCA).

If it was a mate at the bowling club, this is not going to help you, but if it was professional advice, I would strongly suggest you contact the AFCA.

Losing money in any fashion is awful for any of us, but terrible for a pensioner. I think your best course of action is the source of the advice - that was clearly misleading.

As to the company, at the end of the day, the market is the best judge of this, along with ASX listing rules to regulate its situation. A drop in the share price of more than 96% is a seriously bad indicator.

This is the last thing you want to hear, but taking on the risk in one small company is not what any retiree or pensioner should be doing. Could all readers please remember about risk and return, 
and also my favourite investment saying: If it looks too good to be true it will be.

Contact AFCA

• Visit afca.org.au
• Call 1800 931 678

Get stories like this in our newsletters.