In 2018, Old Mutual International (now Utmost International) announced it was suing structured note provider Leonteq. This was over a series of rogue structured notes with an extra layer of secret commission paid to scammers without Utmost International’s knowledge (allegedly). These notes had failed because they were so enormously high risk. The result was thousands of Utmost’s victims losing huge amounts of their pensions and life savings.
On 28th May 2024, it was announced by QROPS trustees and Old Mutual (later renamed Quilter and now owned by Utmost International – formerly Generali) that Leonteq had settled out of court for the damages caused by these toxic structured notes to thousands of investors.
This announcement was reported by Momentum Pensions in Malta – among other QROPS trustees. Some victims of offshore pension scams facilitated by Old Mutual, Generali, Utmost, RL360, SEB and other life offices will get some compensation for a small part of their huge losses.
Old Mutual International, the life office responsible for thousands of ruined lives in Spain and beyond, announced in 2018 that it was suing structured-note provider Leonteq. There had been a series of extra toxic, high-risk notes for which Leonteq had been paying scammers additional commission “under the table” (i.e. not disclosed to Old Mutual). In early 2023 the matter was settled out of court for an undisclosed amount.
But this is no real compensation for the years of distress and poverty the many thousands of Utmost’s victims have gone through. Lives have been ruined. Families torn apart. Homes lost. Victims have died miserable, lonely deaths – leaving distraught and destitute spouses and partners.
It had originally been reported that Old Mutual had been suing Leonteq for somewhere between £94 million and £200 million. The basis for this action was undisclosed commissions – which is fraud. But Utmost (along with all other life offices) had been quite happy to pay millions in undisclosed commissions to the vast array of scammers who sell their offshore bonds and toxic investments (such as structured notes). But while Utmost had no problem with these outrageous commissions being kept secret from the victims, they objected to the Leonteq commissions being hidden from Utmost themselves.
Momentum is taking further advice on the legalities and tax implications of paying this compensation to pension scheme members. Presumably, STM, SEB and other QROPS providers who had facilitated this fraud will be doing likewise.
While this is indeed welcome news for the thousands of pension savers whose lives were ruined by these failed investments, it does leave many unanswered questions:
- Why did the life offices such as Utmost give terms of business to the scammers in the first place?
- Why didn’t Utmost ensure the scammers disclosed the commissions on the insurance bonds and also on the investments?
- Why did Utmost allow retail investors’ money to be invested in professional-investor-only, high-risk investments?
- Will Utmost be paying compensation for all the other structured notes which were toxic and which failed?
Utmost’s answer to these questions would, obviously, be: “We didn’t give investment advice”. And this is the excuse they will make when they testify in the Isle of Man court – where Signature Litigation and Forsters are suing them and Friends Provident International for £400 million for this very crime.
Utmost and all the other life offices did not – indeed – give investment advice. However, they did act on the investment instructions (often forged) of unlicensed scammers – and reported on the resulting crippling losses for thousands of policyholders. Despite being fully aware of these losses, Utmost continued accepting investment instructions (often with forged investor signatures) for years – paying the same undisclosed commissions to the same scammers, with the same resulting losses.
In fact, Utmost International continues with this fraud to this very day. And now there is evidence that they are paying even higher undisclosed commissions to the very same scammers who have already ruined so many lives for well over a dozen years.
Utmost had not been the only life office involved in the Leonteq structured note scandal. Friends Provident International, Generali, Investors Trust, Julius Baer, RL360 and SEB had all been similarly culpable. But it looks like Utmost had been the only one to sue Leonteq for this fraud.
And let us be clear, undisclosed commission does constitute fraud – irrespective of whether it is committed by the scammers, Leonteq or Utmost International.
There had been many scammers involved in the receipt of the Leonteq extra (under-the-table) commissions. Known as “Chiringuitos Financieros” by the Spanish regulator, the CNMV, they included Finsbury Financial, Chase Buchanan, Square Mile (later known as Planet Pensions) and – of course – the notorious Continental Wealth Management in Spain.
Perhaps the biggest question which remains unanswered is why the regulator – the Isle of Man Financial Services Authority – has done nothing to sanction the likes of Quilter, Utmost, Friends Provident and RL360? The regulator’s Chair – Lillian Boyle – has been in place since 2015 so she must have known perfectly well how much fraud had been facilitated by the life offices.
Boyle had previously been the CEO, Director and Chair of Isle of Man international life companies and their overseas subsidiaries and branches. So she must have had intimate knowledge of how the secret-commission fraud worked. And yet she has stayed silent.
The IoM FSA’s Chief Executive is Bettina Roth. She has worked for the regulator in the Cayman Islands (that well-known jurisdiction for dodgy financial dealings – including the Trafalgar Multi Asset Fund investment scam). And yet she too has stayed silent. Both Boyle and Roth must know that the Isle of Man is under the spotlight with nearly half a billion pounds’ worth of claims against the death offices for fraud (and a billion more in the pipeline).
The IoMFSA’s own website claims it is “responsible for protecting consumers, reducing financial crime and maintaining confidence in the financial services sector through strong prudential supervision”. And yet the very financial crime that Old Mutual and Utmost International have been committing for more than a dozen years – under the very nose of the regulator – is ignored.
It is indeed great news that Leonteq has paid up. But, did that payment include all the extra-commission paid on the toxic structured notes? And any interest, damages and compensation for the losses and the fraud? And what about the other structured note providers whose toxic products caused just as much (and sometimes more) damage to thousands of victims?
Royal Bank of Canada, Nomura and Commerzbank also listed their toxic products on Utmost Internationals’ investment platforms. A multitude of scammers (who had terms of business with the life offices) used these to ruin their low-risk, retail victims. Did any of these big financial institutions care that they were facilitating financial crime on a massive scale – and ruining thousands of lives?
With the IoM regulator silent, this massive international fraud continues to this day. The life offices are still paying the scammers huge undisclosed commissions for both the insurance bonds and the investments listed on their platforms. In fact, the bond commission can be as high as 9% – for a product that nobody needs and which only serves to facilitate fraud against the policyholders.
In 2018, Utmost International commissioned a report on the Leonteq structured note scam from https://www.futurevc.co.uk/ – a consultancy firm which specialised in structured products systems and research analytics. Their Managing Director, T. M. Mortimer, analysed a test sample of 100 notes and reported the below fees and commission figures:
| Fee Level | Number of Occurrences |
| Less than 6% | 9 |
| 6% – 8% | 4 |
| 8% – 12% | 21 |
| 12% – 16% | 26 |
| 16% – 20% | 14 |
| 20% – 24% | 12 |
| 24% – 28% | 6 |
| 28% or more | 8 |
| 100 |
Mortimer concluded: “In my view a total fee of 8% taken between Leonteq and its associates would be reasonable. This corresponds to the entries in the first two rows in the table.”
This means that only 13% were reasonably (i.e. viably) priced. The remaining 87% were vastly overpriced with extortionate commissions paid to the scammers.
The insurance bond scam continues to flourish in all the typical British expat destinations – from Spain and Portugal to Thailand and the Middle East. Life offices such as Utmost International and RL360 continue to fuel the global undisclosed commission fraud machine – with scammers posing as financial advisers and selling over-priced products rather than proper financial advice.
Leonteq is still doing a roaring trade – thanks to the offshore scammers and the life offices. The secret-commission fraud still flourishes unhindered. Utmost International and Friends Provident International are throwing millions at defending the Signature and Forsters actions brought by thousands of victims. The regulators remain silent.
Every day more victims are created. How many more victims need to be ruined before something is done to put a stop to this huge-scale offshore financial crime? Leonteq may have paid up – but now the life offices themselves (including Utmost International, RL360 and SEB) need to pay up too.
My son invested with Blackmore goble his pention from HNS he passed away I have tried everything to get answers I informed Blackmore goble of his passing heard nothing that is 5 years can you help
First it’s Blackmore GLOBAL – not goble. Second, Blackmore Global (operated by Phillip Nunn and Patrick McCreesh, formed in 2014 and scammed hundreds if not thousands of people out of their pensions) went bust in 2022 ( https://www.thegazette.co.uk/notice/4127663 ). It is no more. The money has gone. I assume the pension was transferred into a QROPS in one country or other (the favourite for that scam was one or more QROPS in Malta). Your only course of action is to bring a complaint against either a) the QROPS – and there has been a successful complaint already against STM in Malta for that scam or b) a complaint to the UK Pensions Ombudsman against the pension provider in the UK that allowed the transfer without doing proper due diligence on the transfer and there have been some successful cases with that too.
However, I doubt you will get any help from this website. It’s pretty much inactive these days. It was once a force to be reckoned with in its fight against scammers. Now it has pretty much lost favour. I doubt many people read these blogs and even less pay any attention.
So what does this nean for SEB clients. We were low to medium risk and had our pension money tied up with leonteq. Will we ever see our mibey again.
Many CWM victims who had their pensions transferred to Malta (which was a favourite jurisdiction for scammers of the last decade) have successfully made complaints against the QROPS (where pensions were transferred before being invested in the toxic funds) to the Arbiter for Financial Services in Malta (their version of our Ombudsman) and they have received 70% of their pensions back. The Arbiter generally awards only 70% against the QROPS on the grounds other parties (like unqualified advisers) also carry some of the blame, not just the QROPS. There have been dozens of successful complaints upheld in Malta for victims of the CWM scam that I think you might be referring to. Making such a complaint is likely the only course of action you have to recover your money but I doubt this website will give you any help. There is I believe, a FaceBook group for CWM victims and my understanding that has helped many victims recover their pensions – not a member of it myself as I’m not a CWM victim but I have read numerous successful claims against QROPS in Malta on the Arbiter website. You might try there, it might be a good place to start. Beleieve me though, the road to compensation is a hard slog so you have to dig in and persevere.
So, does this mean if I’ve lost money through CWM and Leonteq, I am getting some compensation?
Although I’ve always sent everything in , how would I claim?
Many Expats were scammed into transferring pension pots into a QROPs by so-called Independent Financial Advisors. Turns out these advisor were only interested in lining their own pockets and ruining clients pension funds by investing in toxic funds that would pay them the best commissions. While working in South Korea I was introduced to IFA Nathan Andrews, he advised me on moving my pension pot to Old Mutual QROPS. This turned out to be a a dreadful decision, not only did he invest large amounts into toxic funds and structured notes, he was churning funds to gain commissions. I was then having to pay penalties for early surrender of these funds, normally 6% of fund value.
I lost a large amount of capital. These charlatans manage to avoid any consequences for ruining peoples pensions, and they gloat that they get away scot-free. The IFA mentioned is now working as a Senior Wealth Manager for a large multi-national company based in Geneva. I certainly hope the Class Action Lawsuit against the company mention report is successful. However, scammers will not be penalised for their actions.
It is really important to find out which firm Nathan Andrews was working for at the time he provided you with the “advice”. Plus, if he is now working for a new firm in Geneva, this firm needs to know about his past fraud and get rid of him. The only reason for moving pensions into QROPS was – for the likes of Nathan Andrews and all the other fraudsters – to get the 7% commission on the insurance bond (a product which nobody needed or could afford) and then churn assets for more, repeated (and undisclosed) investment commissions. And I don’t use the word “fraud” lightly – if the commission is not disclosed, then it is fraud.
There seems to be a misunderstanding (and Angie’s 23rd Aug reply seems inaccurate also). Firstly Old Mutual is not (and never has been) a QROPS. QROPS (qualifying overseas pensions schemes) are trustees in jurisdictions other than the UK – like for example in Guernsey or Malta or Isle of Man etc). These were/are trustees regulated in their repsective jurisdictions which agreed to follow UK HMRC rules for pension trustees and as such HMRC would not treat such transfers to them as unauthorised withdrawals, which would have attracted up to 55% tax. HMRC never vetted these trustees even though many mis-advisers kept saying the were “approved” by HMRC – they were not.
Old Mutual is a life insurance company (now called Reassure I think).
Transferring your pensions to a QROPS was not just to get commission on the sale of rip off insurance bonds – that was one reason. Other reasons were to take advantage of regulators in other jurisdictions turning a blind eye to scams and essentially facilitating the scams. It was easier for scammers to get at your money if the scheme fell outside the UK regulatory environment.
Other jurisdictions allowed unregulated Financial advisors and ignored the recommendations of unregulated investments that were wholly unsuitable for pensions such as high risk Structured Products (as mentioned in this blog) or high risk investments like car park spaces, storage pods, reforestation etc.
Foreign jurisdictions (like Malta) facilitated these scams and “advisers” made commission not only from the useless insurance bond but also from the unregulated investment funds and QROPS made money from the administration fees as trustees. Everyone was dipping their hands in the victims pension pot, draining them dry.
In some cases (Guernsey for example) one person managed to take their QROPS to court; lost the court case but won the appeal and got her money back. This was a gruelling ordeal for the victim and is not for the faint hearted. I think this website has blogged the case – you can look it up for yourself, I don’t know the link reference now.
In Malta many pension scam victims have successfully brought cases against their QROPS via the Arbiter for financial affairs (Malta’s version of our Ombudsman). They got 70% of their losses – 70% seems to be the standard in Malta.
A class action has just concluded in IoM against the Life Insurance companies that facilitated these scams – but has not yet passed judgement – and if they win many victims in that class action might get compensation for their losses from the Life Offices.
Finding the name of the firm Nathan Andrews worked for seems a waste of time imho. Either go after the QROPS (if it was in Malta there is a high probabilty of getting 70% back via the Arbiter) or go after the UK pension provider for maladministration if they failed to do due diligence on the transfer – that has proved successful once, that I know of against Carey Pensions. It’s also the subject of a blog on this site.
You can understand why victims get confused about who did what, and where their money went. Trying to explain to people in plain language why anyone would use an insurance bond in a QROPS is a struggle. The QROPS is a wrapper; the bond is a wrapper. It is like wearing two pairs of trousers. Of course, it is all a scam – just part of the fraudulent commission operation which oils the wheels of the entire offshore financial services debacle.
It will be interesting to see how the Signature litigation against Utmost and Friends Provident turns out. I bet the judge will be struggling to decide what to determine – the IoM depends heavily on the success of the scammers at Utmost and Friends. They are big employers on the island. And they all probably hang out at the same sailing, golf and tennis clubs (and brothels).