The Man Who Could Own Aviva France (2015)

https://web.archive.org/web/20150228011715/https://ftalphaville.ft.com/2015/02/27/2120422/meet-the-man-who-could-own-aviva-france/

by wskinner • 8 years ago

21 14 8 years ago

web.archive.org

wskinner2• 8 years ago

This is actually from FT Allhaville. I posted the archive.org link because sometime since 2015 the article has been placed behind a login page.

tanderson922• 8 years ago

see also at Bloomberg, "Arbitrage Discovered": https://www.bloomberg.com/view/articles/2015-02-27/arbitrage...

phasetransition• 8 years ago

Yes. One of my personal favorite Matt Levine pieces, and the underlying story is nuts, too.

wskinner2• 8 years ago

This is also a great piece - it’s how I found the article myself.

tanderson922• 8 years ago

I figured as much, since a similar insurance contract story was in Friday's newsletter and linked to this piece.

gwern• 8 years ago

Apparently still fighting as of December 2017: https://www.thisismoney.co.uk/money/news/article-5186489/You...

xaranke• 8 years ago

Maybe this is a dumb question, but it what stops Aviva from publishing new prices every minute or every second?

prices for the funds were published each Friday, and clients were allowed to switch funds at those prices anytime before the next price was published, even if markets moved in the meantime.

Publishing prices every Friday just seems like a formality, from what I can gather it isn't written in the contract.

mikeash3• 8 years ago

I suspect the contract is written such that the prices are to be given to the customer each Friday, and the customer has until the next scheduled delivery on the following Friday to reallocate their funds. Aviva could publish more often but it wouldn't change anything.

mikeash3• 8 years ago

What possesses a company to offer such an obviously dumb product? The article offers some speculation but nothing particularly convincing.

SamReidHughes2• 8 years ago

It was the eighties.

mikeash3• 8 years ago

Is this a reference to how they probably thought it wouldn't be a problem because people couldn't get pricing info fast enough at the time?

If so, I don't quite buy that. Maybe that really is what they thought, but it seems pretty dumb. The info was surely available. The average person might not be able to get to it, but someone working in the financial industry with access to specialized feeds could have.

It sounds like this was common in France but not elsewhere. Was something different about France that made it seem reasonable?

captain_perl• 8 years ago

It could not tear up thousands of contracts, so it tried a more subtle tactic: policy holders were sent new papers, with the offer of 100 francs for the trouble (about £10). It is a measure of the bureaucrat’s art that almost all did sign, but the Georges declined.

US banks tried the same trick during the 2008 mortgage crisis. They mailed letters to certain mortgage holders that would have resulted in non-recourse (walk-away) loans becoming recourse loans.

The US DOJ also tried something similar. They sent letters to large companies requesting their boards not fund lawyers for CEOs, so that the DOJ could increase their conviction rate against white-collar defendants.

Bureaucrats.

pontifier• 8 years ago

I'm fighting a similar, but much smaller battle myself... In early 2014, I acquired initial coin distribution stakes in a cryptocurrency called NEM for myself and my son. The developers decided to confiscate any stakes that went unclaimed during a poorly noticed and arbitrary claim period.

In January 2018 the coins my son and I were supposed to receive were worth $9M. I'm extremely upset about this, and the people behind it seem to have no shame about keeping the coins of the hundreds of people in this same situation.

The Man Who Could Own Aviva France (2015)

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