Another scam-ish practice on their unsophisticated customers, when they sold them “noncumulative, perpetual preferred shares.” Banker told Teta they’re just as safe as deposits, but with higher interest. Let me explain what they are, simply:
“Preferred” means preferred for the bank, not you. “Perpetual” means infinity. That means they have to pay you your money in the year Never. “Noncumulative” means they don’t have to pay you promised interest say last year, & if they don’t, they never have to pay it again. Got it?
So what are they worth, you might ask? What would you pay for an investment which involves lending me money, at a certain interest rate, but I get to decide if I pay you that interest or not, and I never have to pay you your money back?
And you signed a paper agreeing to all that stuff, but you didn’t read it because you trust the guy in a suit sitting in front of you, especially when he said, “Wallaw! You don’t trust us? We’re the best banks in the world.”
So how do you get your money back? The only way to get rid of this junk is to find another idiot to buy them, by giving him the same bullshit pitch they gave you. A moral dilemma, at best.
