In Australia we can't lay claim to a financial scam the size of Bernie Madoff's ponzi scheme in the United States. But we have had our fair share of financial disasters that have affected thousands of mum and dad investors. Westpoint, Opes Prime and Storm Financial have ruined many people.
The Australian media has been flooded by stories of individual investors adversely affected. Some have lost their homes. Many must rely on the aged pension rather than the comfortable retirement they had planned. Some retirees have been forced to return to work.
Most of the media coverage has skirted around the fact that the Storm Financial investors were expecting to increase their wealth exponentially by investing with money they didn't have and couldn't afford. There seems to have been almost a sense of entitlement to amass wealth out of proportion to one's financial standing. This is echoed in the corrupt activities of former Queensland minister, Gordon Nuttall.
Following this materialistic version of the 'fair go' spirit we have reacted to this devastation as we do to other disasters. We demand that the government bail out the hapless investors and look to regulators and financial institutions for compensation.
In the Storm Financial case we expect that investors, many owing more than what their share portfolios are worth, will be compensated by the financial institutions that provided the mortgages and margin loans.
In the United States it is different. There, investors have been hit, not just by Bernie Madoff, but also by a string of other collapses. Although in the Madoff case many investors were extremely wealthy, many were also mum and dad investors. Many have seen their life savings and retirement funds disappear. As in Australia, homes have been lost and retirees wrenched out of retirement.
But even though the SEC was clearly inactive and had failed to act on complaints it received for years about the Madoff operation, there isn't a loud chorus calling for government bailouts.
In some cases, the investors have access to the Securities Investor Protection Corporation, a compensation scheme for investors caught up in brokerage firm failures. But the anger and sense of betrayal rightly felt by investors has been directed against Mr Maddoff himself, his wife and family and, more recently, against his trustee in bankruptcy.
Judging by the stories in the media, people in the United States expect personal responsibility for investment decisions. They express guilt, anger, disbelief and