Tag: CWM

OMI SUES LEONTEQ over undisclosed commissions

A fine journalist at International Investment reports that Old Mutual International is taking legal action against Leonteq. She reports that this action is being taken on the basis that Leonteq lied about commissions paid to advisers for using high-risk structured notes.

This news is, of course, very welcome news – especially if it succeeds in securing redress for the “significant financial losses” for the Continental Wealth Management victims. OMI has stated:

“Had the true level of commission been disclosed, the high-risk structured notes would not have passed Old Mutual International’s (OMI) criteria, and no investments would have been made”.

OMI has mentioned the “true level of commission”. What it is referring to is the fact that for some particularly toxic notes, the commission paid to the scammers was 8% instead of 6%. The victims ultimately pay this commission – which is always hidden from them – but in reality the difference between 8% and 6% pales into insignificance when compared to the actual losses themselves.

Leonteq’s high-risk structured notes had been failing and causing crippling losses for years. Just as RBC’s, Commerzbank’s and Nomura’s had also done. One victim saw his £38,000 pension pot dwindle down to £800 since 2015.

The truth of the matter is the none of the victims should have had any of their retirement savings invested in high-risk structured notes which clearly state on the term sheets:

FOR PROFESSIONAL INVESTORS ONLY

Continental Wealth Management – an unlicensed firm of scammers – bought more and more structured notes. CWM was not licensed for either insurance or investment advice.

But this raises an important question:

Why aren’t SEB and Generali suing Leonteq?

The SEB and Generali victims suffered very similar crippling losses to OMI’s. What are they doing about this fiasco? What would their “criteria” have done to intervene had they realised Leonteq was paying the scammers 8% instead of 6%?

Apparently, Leonteq is now disclosing commissions on the term sheets for their products. Great. Problem is that the victims never get to see the term sheets – or at least not until it is way too late and they have lost half of their life savings. Having had access to a Leonteq termsheet which clearly states:

This Product may only be sold to qualified investors (the term “qualified investor” has the meaning as defined in Section 10 of the Swiss Federal Act on Collective Investment Schemes “CISA”).

and

Given the complexity of the terms and conditions of this Product an investment is suitable only for experienced Investors who understand and are in a position to evaluate the risks associated with it.

But even if the victims had seen these warning and the fact that they were paying 6% or 8% – on high-risk structured notes – to have their fund systematically destroyed, what could these people have done about it? Because, at the end of the day, the client is not the client (apparently). The client is the life office. OMI, SEB and Generali are the legal owners of these dodgy structured notes. Or perhaps the trustee is the legal owner? Depends on who you ask and why – the answer is always different.

Fortunately for OMI clients – the MD of OMI – Peter Kenny – has said the company is “taking a firm stand against the behavior which has led to such devastating consequences”.

Kenny goes on to say that OMI “will do all that we can to bring to account those responsible.” And is “encouraging all market participants to help rid the industry of inappropriate structured products, which are having a damaging impact on investor confidence and outcomes”.

The International Investment journalist ends her article with Kenny’s parting comment:

“I would encourage all industry participants to work together to eradicate poor practices once and for all.”

For some, however, the damage has already been done.

A life’s worth of savings has already been destroyed.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.

April 12, 2018
EVERGREEN RETIREMENT TRUST QROPS SCAM

EVERGREEN RETIREMENT TRUST QROPS SCAM – HOW DID IT ALL WORK?

Victims were cold called by Continental Wealth Management (CWM) and duped into transferring their UK pensions into the Evergreen New Zealand QROPS on the promise that they could access 50% of their pension. CWM acted as the “sister” company to Stephen Ward’s Premier Pension Solutions (PPS).

Once the 300+ victims had been sold this idea – on the promise by pensions “expert” Stephen Ward of Premier Pension Solutions that the 50% in cash would not be taxable – the transfers went ahead. More than £10 million pounds’ worth.

CWM assured the victims that the 50% cash would not be taxable because the scheme was set up and run by international pensions expert and author of the Tolleys Pensions Taxation manual Stephen Ward of Premier Pension Solutions.

Once the transfer had gone ahead, and the victims were eagerly awaiting their 50% in cash (albeit having to pay 10% in fees for the privilege), they then started to chase up their cash. There were delays after delays.

After many weeks of frustration, the victims were then told they had to apply for a loan. They were told that this was merely a formality – paperwork to ensure that the cash would not be taxable by HMRC. And they were sent loan application forms from a company called Marazion – Stephen Ward’s company in Cyprus.

Victims were then forced to sign a five-year Marazion loan agreement. And forced to sign a five-year Evergreen “lock in”. Clearly, this was designed to stop victims from transferring out of Evergreen before their Marazion “loans” were paid off.

Evergreen recently sent out a notice to victims advising them the Evergreen Scheme is being wound up. (Surprise surprise!!). Here is the Evergreen notice with my comments in bold:

Evergreen Retirement Trust – closure and winding up

We are writing to inform you that the Evergreen Retirement Trust (“ERT”) is being closed and wound up with effect from Friday, 6 April 2018. So why, just days earlier, were you writing to victims to tell them could take their 30% tax-free lump sum and transfer out? You knew this day and the winding up would eventually take place – and why as well as when. And yet you have misled and distressed a large number of your victims knowingly and intentionally.

Why is ERT being wound up? We all know exactly why ERT is being wound up. HMRC realised that the scheme was operating pension liberation fraud in partnership with Stephen Ward of Premier Pension Solutions early on – in 2012 – so removed it from the QROPS list in November 2012. Your Manager’s Report for the year ended 31.3.16 refers to “concerns raised by HMRC” but you do not disclose the fact that you had been caught and the scheme removed from the QROPS list as a result. The other reason the fund is being wound up is that you have run out of excuses now the five-year lock-in period is up. In your Manager’s Report, you claim that service contracts were entered into by Evergreen Retirement Trust for admin, trustee and other services which have minimum fixed fees. But you have never provided evidence of these alleged “contracts” – nor have you explained why you have carried on paying these unaffordable costs. You have been trying to obscure the fact that 41% of the underlying assets of the fund were in Penrich and Spectrum and that this is where the loan funds came from. You have for years tried to pretend that you knew nothing about the Marazion loans. But the original trustee – Perpetual Trust – even had a virtually identical logo to Marazion!

We have been considering the future of ERT for some time. Despite our best efforts, ERT has not been as successful as we had originally hoped. This is the understatement of the century surely? Best efforts? I would really hate to see your worst efforts. You’ve spent the last five years telling members they can’t transfer out because of the five-year term Marazion loans – and knowing all along that you were always going to wind the scheme up because there was nothing to be done about at least 41% of the scheme being in illegal loans using Penrich and Spectrum funds – the underlying assets of the scheme.

The main reasons for this have been the inability to attract new membership into ERT and the increased compliance costs arising from transition to the new, more rigorous, Financial Markets Conduct Act regulatory framework that now applies to it. And what exactly did the “more rigorous regulatory framework” say about the scheme operating pension liberation fraud as part of the scheme?

Although we explored a number of avenues to resolve these issues, we ultimately determined that it would be in members’ best interests for ERT to be wound up and the scheme brought to a close. What would have been in the members’ best interests would have been to allow the members to transfer out several years ago when we first asked Evergreen for transfers. It is clear from your own accounts that you have indeed allowed 10 people to transfer out £500k worth of funds last year – presumably these were people without Marazion loans?

What happens next? Until 6 April 2018, ERT will continue as normal and you will have the same rights and benefits as before. On and from 6 April 2018, the assets in your member account will be realised and the proceeds paid into your nominated bank account after the deduction of applicable fees, expenses and any taxes in respect of the winding up process. So for people under the age of 55, you are proposing triggering an unauthorised payment which would be taxed at 55% by HMRC? Unbelievable.

A final set of scheme financial statements will be prepared, audited and sent to all members, and the relevant regulatory notifications will be filed. So how are you going to account for the Marazion loans? You must surely realise that this is a huge problem and you can’t just keep ignoring it and pretending you weren’t involved in this aspect of the scam.

To allow this process to occur in an orderly fashion, members will not be able to request transfers (except as set out below) or make further contributions, and benefit payments will be put on hold pending the final distribution of wind up proceeds. So how are you going to account for the Marazion loans? How will these be factored into the wind-up proceeds?

Some of the scheme’s assets are illiquid and as a consequence the winding up process could take some time. Why on earth are any of the assets illiquid? No pension scheme assets should be illiquid. You have been dealing with this matter for more than five years and you always knew that there was a purported five-year lock-in, timed to coincide with the five-year term of the Marazion loans. So why on earth invest in illiquid assets?

Based on current market conditions, we expect the winding-up process to be fully completed and a final distribution to be made around December 2019. So what you are saying is that you never intended to honour the five-year lock-in in the first place. You wanted a seven-year lock-in so that you could continue to hide the Marazion loans.

Prior to the final distribution of wind up proceeds, partial distributions may be made as assets are realised, provision for anticipated costs are made and as such funds become available to make those partial distributions. In 2016 you purchased £5.87 million worth of assets. Why – in the full knowledge that you were going to wind the fund up a couple of years later – did you buy illiquid assets?

What are my options? Unless you advise us otherwise by 6 June 2018, you will receive your winding up proceeds in cash to the bank account nominated in accordance with the requirements noted below once the winding up process above has been completed. For members under the age of 55, you cannot do this as it will trigger an unauthorised payment and the victims will get taxed at 55%.

For members who have not been tax resident outside the UK for five clear and consecutive UK tax years, receiving winding up proceeds in cash could have adverse UK tax consequences. We are therefore offering members the option of having their winding up proceeds transferred to another QROPS or registered UK pension scheme instead of being paid directly in cash. But you are asking other trustees to accept in specie transfers of unknown provenance (by your own admission at least half of the fund is illiquid) and with at least 40% of the fund subject to a fund which provided the Marazion loans.

These members are strongly encouraged to obtain professional tax advice from an independent and qualified UK tax adviser before making any decision. Of course they do – including tax advice on the 50% Marazion “loans” which you facilitated and of which you have always been not only aware but in which you have been complicit.

If you wish to have wind-up proceeds transferred to another scheme you will need to provide us with notification by 6 June 2018. And which “other scheme” is going to accept illiquid – possibly toxic – assets bought by a clearly inept and irresponsible trustee which has also facilitated pension liberation? Any members with a Marazion loan will be deemed to be “high risk” by any new pension trustee and a mechanism for repayment of the loan will need to be put in place.

Please note that transfer of the assets will occur over time, in line with the distribution of the funds to other members. What do I need to do? If you have been tax resident outside the UK for five or more clear and consecutive tax years then all you need to do is provide us with updated proof of identity and address documentation together with official bank documentation evidencing a nominated bank account held in your name (see the Appendix to this letter for more details about this requirement). But that only applies to those over the age of 55 and without a Marazion loan presumably?

Once that documentation has been provided, you will receive your winding up proceeds into your nominated bank account as funds become available through the winding up process. You will also receive copies of the final audited financial statements in due course. Do you mean once you have figured out how to account for the Marazion loans funded by Penrich and Spectrum?

If you have not been tax resident outside the UK for five complete and consecutive UK years, we strongly encourage you to seek professional tax advice from an independent qualified UK tax adviser. You should then advise us whether you wish to receive your winding up proceeds in cash, or transfer your member account to another QROPS or registered UK pension scheme. So what are you going to do if no trustee will accept an in specie transfer and the members are under the age of 55?

If you still wish to receive your proceeds in cash, you will need to provide us with the documentation (including official bank documentation evidencing a nominated bank account held in your name) referred to in the previous paragraph. In either case, if you wish to transfer your member account to another QROPS or registered UK pension scheme, please advise us before 6 June 2018 and we will send you the relevant transfer forms. It is now clear, beyond any shadow of a doubt, that you must immediately account for the Marazion loans and show how these are accounted for in the scheme accounts. You have avoided this question for several years and now is the time finally to come clean.

If the trustee of the other scheme agrees, a proportion of your transfer to that scheme might comprise a transfer of underlying investments of ERT, as well as cash. I doubt any receiving scheme will be thrilled at the thought of accepting any of ERT’s underlying investments in the full knowledge that approaching 50% of the original transfers were given out in fraudulent “loans”.

Please be aware that all payments made out of the scheme, including in the winding up process, are required to be reported to HM Revenue & Customs.

Who should I contact with questions? If you have any questions about the winding up process, you can contact our customer services team by email at transfers@evergreentrust.co.nz, by telephone on +64 3 974 1505 or by post to PO Box 36270, Merivale, Christchurch 8146. Please note that we do not provide financial advice or tax advice. Yours sincerely, The Directors Evergreen Capital Partners Limited So, will Evergreen finally answer the questions about the Marazion loans? Fully and transparently? I doubt it. And I would like to remind Evergreen that scammers are criminals.

April 11, 2018
LEONTEQ “DRIVEN BY POSITIVE CLIENT SENTIMENT”
LEONTEQ “DRIVEN BY POSITIVE CLIENT SENTIMENT” (Really?) In their 2017 annual report, rogue structured note provider Leonteq has reported “GROWTH ACROSS ALL REGIONS – Driven by positive client sentiment and solid demand for structured products”.

I have no idea what sort of claptrap Marco Amato, CEO and CFO of Leonteq, thinks he is spinning in the 2017 annual report, but if Leonteq really is “experiencing growth across all regions”, this is very serious indeed. If hundreds more victims are going to lose their retirement savings across the globe due to Leonteq’s toxic, professional-investor-only structured notes being sold to low-risk retail investors, then he should hang his head in shame.

Leonteq’s Chairman – Christopher M. Chambers – is quoted as saying:

“We are immensely grateful to Marco Amato for having served as interim CEO during a very difficult phase for our company. He has done an outstanding job. We look forward to continuing to count on his experience and leadership as Deputy CEO and CFO.”

I just hope the new CEO – Lukas Ruflin – will start paying compensation to the CWM victims.

The only positive client sentiment that I can see, is that the Continental Wealth Management victims are positive that Leonteq should pay compensation for the terrible losses caused by their dodgy, toxic structured notes.

And Leonteq can, of course, afford to pay. Here are their 2017 results:

I note they paid their staff £87 million in that year. Way too much – I suggest they halve all employees’ wages until the Continental Wealth Management victims are fully compensated.

I have some other suggestions for Leonteq:
- Don’t take business from unlicensed firms
- Don’t take business from known scammers who put investors into extortionately expensive insurance bonds such as OMI, Generali and SEB
- Don’t take business from known scammers
- Don’t allow low/medium risk investors to be invested in Leonteq’s high-risk, toxic, professional-investor-only structured products which are clearly labelled:
“Danger of losing part or all of your capital”

Rogue life office, Old Mutual International, has been wittering on about suing Leonteq for many months – but never actually does anything about it other than spout a lot of meaningless hot air.

Time to make up your mind Old Mutual. Your victims are suffering terribly – and you don’t seem to care.
March 2, 2018
CONTINENTAL WEALTH MANAGEMENT BY JODY KIRBY (OR SMART OR BELL)

CONTINENTAL WEALTH MANAGEMENT BY JODY KIRBY (OR SMART OR BELL) – Now that Continental Wealth Management/Trust boss, Darren Kirby, is coming back to Spain to help sort out the mess, it is time to engage with his former partner, Jody, to find out what she has been doing to resolve the losses suffered by hundreds of victims.

Darren will, naturally, want to set the record straight, and help CWM victims get their money back after CWM “advisers” put their entire retirement savings into professional-investor-only structured notes. Many of these notes failed – costing victims £millions.

I have no doubt that Jody Kirby (or Smart or Bell – or whatever name she is using nowadays) will be keen to get involved. What exactly she has been doing to help the victims since September 2017 remains a closely guarded secret. However, I am sure she will announce it pretty soon now she knows that Darren Kirby is coming back.

Jody and Darren will, obviously, have a lot to talk about – and I am sure she will appreciate the importance of being frank with him. She will probably tell her current chap, Frank Pearson, to hop it while she and Darren debate the best way forward. Hopefully Frank will have the grace to duck out of the way so as not to distract Jody and Darren from concentrating on their responsibilities. After all, three is a crowd and Pearson doesn’t want to get stuck in the way like an unwanted duck a l’orange!

44-year old Jody has her own fashion business and has openly admitted to having made millions out of financial services. Once Frank is out of the way, she and Darren can put their heads together to formulate a plan to put that money to good use – in the interests of the victims of CWM.

A really smart way to approach this would be to write out a detailed account of everything that happened and who was responsible for each bit. I believe Darren Kirby has already made a start on this with the help of Alan Gorringe. This account will be especially helpful to us in the court proceedings.

As part of the frank account of the CWM disaster, all the victims will be keen to know what constructive ideas they both have for helping to put things right. There has been way too much silence on this subject from all the CWM advisers to date.

The victims will, no doubt, be pleased to see Darren and Jody committing to the rescue effort together. Jody was – and still is – sole director of Continental Wealth Trust which traded as Continental Wealth Management. A few years ago she described her role in the company on a television programme about “colourful” characters on the Costa Blanca. She confirmed that she was in finance and that she had contributed to the success of CWM saying that it had “gone global”. She stated that while their main office was in Javea, they had also expanded into Portugal, Ibiza, Turkey and France.

Jody explained in the interview that her role in the company was not as a (qualified) financial adviser, but to expand the company and bring the best people on board to work for her and her colleagues.

She goes on to say that CWM offers the “whole package for expats”, advising on the investment of funds (although the firm was never licensed to do so). She then explained how CWM offered “pension release” and detailed a scheme the firm offered whereby pensions could be transferred from the UK. She called this “just amazing” and said they had been very successful at doing this. She said the clients were told “we are going to give you money and it is not going to cost you anything – let’s just find out what you have got in your pension – it will only cost you a little bit of time and we can change your life”.

What she was actually describing was pension liberation fraud through a scheme called the Evergreen Retirement Trust – a QROPS in New Zealand. CWM’s “sister company”, Premier Pension Solutions, run by Stephen Ward, was the brains behind this scam (and CWM did the cold-calling and lead generation). 300 victims lost £10 milion in this scheme, and it cost them 10% of their transfer value in fees, plus 50% of their “loans” in Ward’s Marazion scheme. So not exactly the “nothing” that Jody claimed it would cost the victims.

Jody stated that they had “helped so many families” by releasing their pensions, and said she liked to help people because it was “in my nature”. I am sure the CWM victims will be pleased to hear that – and then to see some evidence of her – and Darren – “helping” them.

In another television interview, at the penthouse suite in a swanky five-star hotel overlooking Hyde Park, Jody explained how she had put half a million pounds into her fashion business. Over champagne, she told the interviewer she had ambition, drive and a burning desire in her.

Let us hope this passion translates into action and a commitment to helping the CWM victims who have lost much, most or – in some cases – all of their retirement savings.

February 28, 2018
OMI complaint
COMPLAINT TO OMI, THE ISLE OF MAN FINANCIAL SERVICES AUTHORITY, THE CENTRAL BANK OF IRELAND, FINANCIAL SERVICES AND PENSIONS OMBUDSMAN AND THE ASSOCIATION OF INTERNATIONAL LIFE OFFICES

ATTENTION:

Martin Middleton, CEO

Michael Hampson
Complaints Handler | Complaints Team | Old Mutual International

T: 44 (0) 1624 655451 | Int Ext: 75451
F: 44 (0) 1624 611715
E: omifmcomplaints@ominternational.com | W: www.oldmutualinternational.com

Isle of Man Financial Services Authority
PO Box 58
Finch Hill House
Douglas
Isle of Man
IM99 1DT

info@iomfsa.im

GeneralMailbox.ATG@gov.im

Central Bank of Ireland:

enquiries@centralbank.ie

Financial Services and Pensions Ombudsman

Lincoln House, Lincoln Place, Dublin 2, D02 VH29. Tel: (01) 567 7000 Email: info@fspo.ie Website: www.fspo.ie

AILO – Association of International Life Offices

secretariat@ailo.org

COMPLAINT REGARDING OMI’S NEGLIGENCE, FAILED GOVERNANCE AND FACILITATION OF FINANCIAL CRIME – European Executive Investment Bond (EEIB)

OMI has facilitated financial crime over a period of many years; stood by while innocent victims’ retirement savings were destroyed; paid huge commissions to an unlicensed (and illegal in Spain) firm of scammers; continued charging crippling fees while victims’ funds dwindled away; extorted early exit penalties from victims unfairly and unreasonably; failed to take any action to stem the torrent of huge losses of millions of pounds’ worth of retirement savings for many years. And now it is failing to uphold the victims’ complaints.

OMI has been in receipt of a number of complaints (and will be in receipt of numerous further ones) regarding their negligence and facilitation of financial crime in offshore financial services. OMI has not upheld these complaints – and indeed has neglected to grasp the extent of their own multiple failings and errors.

The existing complaints do relate to serious regulatory breaches and fraud – as well as failing to adhere to OMI’s own terms and conditions. Much of the fraud was caused by the financial advisory firm: Continental Wealth Trust (which traded as Continental Wealth Management). However, the firm’s fraud was only successful because OMI facilitated it.

The complaints submitted to date include:
- That investments were made into high-risk professional-investor-only funds. Many of these failed and caused huge losses to victims’ funds.
- That OMI paid commissions/fees to CWM who not only held no investment licence – but also held no license of any kind.
- As a result of the huge, un-disclosed commission paid to CWM – an unlicensed firm – OMI imposes crippling early surrender charges on the victims.
OMI has responded that they are “very sympathetic to victims’ concerns” and has responded that it appreciates what a very worrying time this must be for those who have lost such huge amounts of their life savings.

OMI has also stated that the roles and responsibilities of all the parties involved with this fraud have got to be clarified. However, OMI claims – entirely disingenuously – it does not want victims to get the feeling it is trying to distance itself from the grievances.

In order to address what it refers to as “concerns”, OMI has attempted to “explain” matters. The use of the word “concerns” is obviously a really crass clanger on the part of OMI, since the victims are absolutely not just CONCERNED – they are furious, terrified and devastated at their dreadful losses. Some victims are suicidal, and many have had their health seriously compromised.

OMI has described the EEIB as being held by the trustee for the benefit of a member of their pension scheme, enabling policyholders to hold a “wide range of investments in one tax-efficient product wrapper”. OMI goes on to claim that policyholders and their investment advisers “have complete flexibility over the investments they place inside the EEIB”.

Some or all of the above may be true. However, that does not make it right that OMI has allowed unlicensed advisers to place clearly unsuitable investments inside their wrappers. Further, it does not make it right that OMI then stood by and watched the investments fail for many years AND DID ABSOLUTELY NOTHING EXCEPT KEEP ON TAKING FEES BASED ON THE ORIGINAL VALUE – AND NOT THE REDUCED VALUE OF THE FUND.

OMI claims that it reviews all investments to ensure they meet Irish regulatory requirements, and their own administration requirements.

If this is indeed true, it is a very serious indictment of the Irish regulator if their requirements are so appallingly lax. What OMI seems to be claiming is that both the Central Bank of Ireland and OMI have such low standards that they will allow low-risk pension savers to have their retirement funds invested purely in high-risk, professional-investor-only structured notes. If this is true, then the regulator is as bad as OMI in condoning an investment strategy which has no regard for suitability, liquidity, diversity and risk tolerance.

In fact, the Central Bank of Ireland has stated that it carried out a review of suitability requirements in 2017 and found that: “governance structures for the identification and treatment of vulnerable clients were absent or ineffective”. The CWM victims were about as vulnerable as it was possible to get – as their retirement savings were systematically and inexorably destroyed. And OMI’s governance structure was about as absent and ineffective as it is possible to get while it stood by and didn’t even bother to raise a red flag on the whole disaster as it unfolded.

There was no jangling of alarm bells as OMI watched millions of pounds wiped out. There was no expression of concern that the same toxic structured notes which had failed in earlier years were bought again and again by the same unlicensed scammers. There was no governance to protect new vulnerable victims from having their funds destroyed from 2015 onwards in the same way hundreds of victims had suffered in previous years.

OMI has claimed that customers/their appointed advisers are responsible for the suitability assessment and selection of the investments held in the policy – and that “it is important that customers read the prospectus/offering documents of investments carefully, before making any investment decisions”. However, OMI watched wholesale destruction taking place inside its own wrappers and took no action. Had OMI asked a few simple questions they would have found the following:
1. The victims were being advised by a known firm of scammers which had been involved in cold calling in the Evergreen pension liberation scam in 2012
2. The victims were being advised by a firm which was not licensed at all – for anything
3. The victims had ALL insisted they wanted either low risk or no risk investments as they could not afford to lose any part of their retirement savings
4. The victims had no idea their retirement savings were being invested in high-risk, professional-investor-only structured notes
5. The victims’ signatures were repeatedly forged on the dealing instructions
6. The victims were duped into a false sense of security when losses started to be reported on their statements by the scammers claiming these were not genuine losses but only “paper losses”
7. The victims had no idea how high the charges and commissions were as these were not disclosed either by the scammers or by OMI
8. The victims were not consulted as to whether they wanted or needed an entirely useless and exorbitantly expensive insurance bond
9. The victims were unaware that tied agents are illegal in Spain
10. The victims were unaware of the huge fees and commissions which were concealed by both the scammers and OMI
OMI claims that term 12 of the EEIB policy terms states that it is the policyholder who bears the risk of investment. But then OMI goes on to assert that the policyholder was the trustee who would be classed as a professional investor.

So OMI has got to make up its mind – it has already stated that: “customers/their appointed advisers are responsible for the suitability assessment and selection of the investments held in the policy”. So who is the customer? The victim or the trustee? And whom did the adviser advise – the customer or the trustee? Or OMI?

OMI goes on to refer to term 11.4 of the policy which confirms that it may allow investment into professional or experienced investor funds because it owns the investments held within the EEIB, rather than the policyholder.

So, who gave the advice and to whom? OMI can’t seem to make up its mind who the customer is: the victim; the trustee or OMI itself. If OMI is the customer, why is it charging the victim fees?

OMI goes on to quote policy term 11.4.1 – which apparently clearly highlights that professional-investor-only funds carry a high degree of risk. So who is taking the risk? The victim, the trustee or OMI?

Let us ask ourselves, where did the original funds come from? Not the trustee; not OMI; but the victim.

OMI then procedes to claim that it will “only accept applications via regulated financial advisers”. But Inter-Alliance was not licensed to provide investment advice – or indeed insurance advice. CWM was not licensed either. So why did OMI accept applications from unlicensed advisors (who were also known scammers)? Also, OMI failed to identify that tied (insurance) agents are illegal in Spain – so it shouldn’t have been dealing with them at all – let alone paying them huge commissions.

OMI states that CWM was a member of Inter-Alliance WorldNet, and obtained their authorization to act via that membership. But this is not true – Inter-Alliance was not licensed and therefore neither was CWM. The application form may, in some cases, have confirmed the appointment of CWM as investment adviser with full discretion – but why didn’t OMI check that CWM was licensed? In fact, most of the victims were under the impression that they would be consulted on the investments and that their risk tolerance would be respected – but this never happened in any of the cases.

OMI goes on to claim that CWM was able to submit investment instructions directly to OMI, without consulting the trustees. But that isn’t true either: dealing instructions were sent to the trustees first, and then the trustees sent on new instructions. How can OMI not even know how its own internal systems work?

OMI concludes that it is sorry the complaining investor is “disappointed with the performance of some of the investments selected by CWM” and then goes on to claim the investments “met the criteria for a permitted asset under the EEIB policy terms”.

So who at OMI was responsible for writing and updating EEIB policy terms? Did this person not notice the losses repeatedly decimating the funds? Did this person not see the same investment failures repeating in 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017? Did this person not question whether the policy terms ought to be revised somewhat? The answer to these questions is, inevitably, a resounding and disgraceful “NO”.

OMI is now refusing to refund or waive early withdrawal charges on the basis that CWM was an appointed investment adviser. This is because OMI initially paid a big chunk of commission to CWM – an unlicensed adviser and known scammer. If a victim wants to get out of the toxic, pointless insurance wrapper, in order to put a stop to the exorbitant fees taken quarterly out of the fund – and based on the original value rather than the decimated value of the fund – he basically has to refund the commission OMI paid to the scammers.

The victims remain dissatisfied with OMI’s response, and the complaint is now being referred to the Irish Financial Services and Pensions Ombudsman. OMI has deliberately misunderstood and overlooked every aspect of the victims’ complaints and failed to address even the most basic issues surrounding OMI’s failures and negligence.

OMI has facilitated financial crime over a period of many years; stood by while innocent victims’ retirement savings were destroyed; paid huge commissions to an unlicensed (and illegal in Spain) firm of scammers; continued charging crippling fees while victims’ funds dwindled away; extorted early exit penalties from victims unfairly and unreasonably; failed to take any action to stem the torrent of huge losses of millions of pounds’ worth of retirement savings for many years. And now it is failing to uphold the victims’ complaints.
February 22, 2018
Why are so many working people losing their pension funds?

Debbie Abrahams takes a stand in parliament, raising the question of, “how many more pensions scandals does she (Esther McVey, Secretary of State, Work and Pensions) need before she introduces the robust regulatory oversight needed to protect peoples’ pensions for the future?“

Debbie Abrahams (pictured) has been a Member of Parliament for Oldham East and Saddleworth since her by-election victory in January 2011. Debbie was a member of the Work & Pensions Select Committee from June 2011-March 2015 , where she led the call for an independent inquiry into the Government’s punitive New Sanctions Regime. In June 2016 she was appointed Shadow Secretary of State for Work and Pensions.

During Work & Pensions Questions, Debbie stated “100´s of 1000´s of ordinary working people have lost half of their retirement income.” Mentioning British Steel Pension Schemes (BSPS), Carillion, BHS and Capita, she goes on to highlight the government´s failure in tackling pensions governance.

BSPS were pushed into the Pension Protection Fund, the government lifeboat for failed schemes in December 2017. 122,000 members were given just months to make the decision of where to go with their precious pension funds. They had the choice to stay with the scheme, join a new one with reduced benefits set up by Tata Steel, or transfer to a personal pension plan. The Guardian reports further on this stating that, “those who do not make a decision will default into the PPF.”

The Independent released an article about the collapse of Carillion: Carillion was put into liquidation in January 2018 after racking up debts of around £900m and a pension deficit thought to be at least £587m.

The collapse of Carillion has left hundreds of workers redundant and their pension funds in tatters.

BHS had 19,000 members and a combined £571m deficit when the company went into administration in April 2016. Again reported by The Guardian, we can at least be thankful that:
Domonic Chappell is being prosecuted by The Pensions Regulator (TPR) in the latest fallout from the demise of BHS, which he bought for £1 from retail tycoon Sir Philip Green in 2015.

With all this pension turmoil, the path is paved with gold for the serial pension scammers, such as ex CWM employees.

The Financial Times reported that: The Financial Conduct Authority is investigating allegations that steelworkers at Tata UK’s plant in Port Talbot were being targeted by unscrupulous pension transfer advisers. British Steel pension fund trustees have received requests for around 11,000 quotes for pension transfers. With promises of low risk and high returns on the investments, who knows how many peope have fallen victim to these vultures already?

We at Pension Life would also like to know why the government has not put in place tighter regulations on pensions to combat pension scammers. New laws need to be introduced so hard working and trusting citizens aren’t left with decimated pension funds.

We can at least be thankful that the SFO and the Pensions Regulator are pushing forward at the High Court and bringing some pension scammers to justice.

February 7, 2018
Ex Continental Wealth Scammers – where are they now?

When a pension or investment scam implodes (as they always do), it is important to keep tabs on where the scammers go next, what they are doing next and who is helping them.

In the case of the Continental Wealth Management scam – headed up by Darren Kirby and purported to be the “sister” company to Stephen Ward’s Premier Pension Solutions – some of the scammers simply fled to Australia or other far-flung countries. But, sadly, some of the scammers are now employed by other advisory firms.

We need to keep an eye on this situation to make sure that neither the scammers nor the firms for whom they now work get any business until the scammers are put back on the street/in prison where they belong.

These scammers have, between them, destroyed the retirement savings of hundreds of victims – costing them millions of pounds’ worth of pension savings. Until and unless every last one of them is put in prison and the key thrown away, we all need to be vigilant of the scammers themselves and also the firms who are harbouring them.

One firm, Beacon Global Wealth, had inadvertently been harbouring ex CWM scammer Richard Peasley. But when I advised them of his background, they sacked him within hours. No argument; no hesitation. I hope all other firms employing these vicious scammers will do likewise.

EX CONTINENTAL WEALTH MANAGEMENT SCAMMERS

Darren Kirby – allegedly hiding in Australia. Let’s hope he turns into a kangaroo and never gets a chance to scam any more victims out of their pensions

Richard Peasley – employed by Beacon Global Wealth but immediately sacked when they realised how many lives he had destroyed. Congratulations to Beacon and their CEO David Vacani for doing the right thing so decisively!

Dean Stogsdill – referred to as “Dogkill” by some – is an expert on how structured notes can decimate a pension fund

Neil Hathaway – referred to as “Hadaway” by some – is another expert on the structured note scam

Antony Poole – employed by Woodbrook Group but sacked when he emailed all the ex CWM clients and tried to sign them up as Woodbrook Group clients

I will be updating this blog constantly as new information comes in regarding ex CWM scammers and where they are working now.

December 20, 2017
BEACON GLOBAL WEALTH MANAGEMENT EMPLOYS EX CWM SCAMMER
Richard Peasley

I am very pleased indeed to announce that on 6th December 2017, Beacon Global Wealth Management terminated Richard Peasley’s employment. There was no hesitation, no argument. Beacon’s David Vacani is also responding to numerous Continental Wealth Management victims who have complained about Richard Peasley’s employment with Beacon. I have no doubt David Vacani will correspond with them professionally, courteously and with great empathy – as he has done with me. Very well done David! A good day for the financial services profession.

Beacon Global Wealth Management had been employing former Continental Wealth Management pension scammer Richard Peasley. I found it hard to believe that any firm would take on such a man when he is well known for being one of the leading advisers at CWM who lied, scammed, defrauded and conned dozens – if not hundreds – of victims out of their pensions.

I am familiar with Beacon, and have spoken to Jennie Poate and know that she is acutely aware of the world of scammers. However, I now learn that Beacon had not been aware of the extent of Richard Peasley’s involvement in the Continental Wealth Management scam.

Richard Peasley, during his time at Continental Wealth Management, put his victims into high-risk, professional investor only structured notes, within hugely expensive insurance bonds. He also put his name to dealing instructions with forged signatures. Peasley then lied to victims about their huge losses – claiming they were “only paper losses” and that the pitifully low values were only “secondary market” values and that the notes would recover at maturity. (They didn’t).

CWM Sharks

Richard Peasley comes from a stable of scammers which includes:
- Alan Gorringe
- Anthony Bishop
- Antony Downs
- Antony Poole
- Darren Kirby
- Dawn Kirby
- Dean Stogsdill
- Jody Kirby
- John Owens
- Louise Kilic
- Marco Floreale
- Mark Davison
- Neil Hathaway
- Patrick Kirby
- Paul Clark
- Paul Taylor
- Phil Kelman
- Phil Pennick
- Rob Clark
- Rory Foster
- Sandy Eftekin
- Sandy Jones
If I have left anybody out, I apologise unreservedly.

Richard Peasley was responsible for the destruction of £millions and the prospect of many people facing poverty in retirement after working hard all their lives to build up a pension pot.

I have made a mistake by including the below dealing instruction and reporting that it was forged. In this particular client’s case, this instruction did have a genuine signature. However, all the other dozen or so were forged. What Richard Peasley and the other scammers at Continental Wealth did was to ask many of the victims to sign one blank dealing instruction, and then they would photocopy it over and over again to buy and sell high-risk, professional investor only structured notes. In other cases, Peasley and the others just copied and pasted signatures from another signed document and used that instead.

Richard Peasley is not someone who can be trusted with innocent people’s pensions – as many of his victims will be happy to testify publicly. I hope he will never work in financial services again, as there is no place in the profession for people who so deliberately and callously destroy victims’ life savings.

As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

Follow Pension Life on twitter to keep up with all things pension related, good and bad.
December 5, 2017
STM Fidecs – Trafalgar Multi Asset Scam

STM Fidecs, the Gibraltar-based trustee firm used for the Trafalgar Multi Asset Scam, is now the subject of large numbers of complaints to the Gibraltar authorities. Hundreds of victims of XXXX XXXX’s unlicensed “advice” transferred safe UK pensions to a Gibraltar STM Fidecs QROPS and then he invested 100% of their funds into his own fund – Trafalgar Multi Asset (now under investigation by the Serious Fraud Office).   These victims have now submitted evidence and testimony. These reports and complaints are against both XXXX XXXX and STM Fidecs for their part in this scam.

STM Fidecs are also being reported to the Gibraltar Financial Services Commission for the attention of:

Annette Perales, Head of Financial Crime

and

Zoe Westwood, Head of Enforcement, Legal, Enforcement and Policy

The Serious Fraud Office has been investigating this scam – in which STM Fidecs played an integral and crucial part – for some months. XXXX XXXX and one of the STM Fidecs directors have been arrested. XXXX’s office was searched and no doubt STM Fidecs’ offices were also searched. Obviously, the victims all want those responsible for this scam to serve maximum prison sentences.

The STM Fidecs website makes the following grand-sounding claim:

“The backbone of STM is its staff. We have people who have worked for us for 20 years who are the heart and soul of our business. If we didn’t have outstanding staff, we wouldn’t be able to do what we do.”

The only thing “outstanding” would be an immediate admission of their guilt and negligence, as well as an undertaking by STM Fidecs to compensate their victims for the £ millions of losses they are facing due to STM Fidecs’ complicity with this scam. Let’s examine some of these staff and see how much backbone they really have.

Alan Roy Kentish
ACA ACII AIRM
Role: Chief Executive Officer

Alan Kentish, CEO, claims to be a qualified chartered accountant specialising in the financial services industry. So you would have thought he would have known not to accept business from an unlicensed firm – XXXX XXXX’s Global Partners Limited (now Tourbillon). He ought to have known that UK residents should not be transferred to a QROPS at all. He would have known that members’ funds should not be 100% invested in one UCIS fund (illegal to be promoted to UK residents). And he should have recognised that it is a clear conflict of interest for members to be invested in a fund for which their adviser was also the investment manager.

What has Alan Kentish done to put this right? How much compensation has he offered to the hundreds of distressed investors? Has he engaged with the victims and assured them that STM Fidecs acknowledges their responsibility, liability and culpability? No – Alan Kentish has done nothing except pull up the drawbridge-like a spineless coward.

David Easton, Head of Pensions at STM Group PLC

“David Easton, Head of Pensions for STM Group PLC joined STM in October 2014 as Managing Director of the Gibraltar pensions business and is also a board member of the pensions businesses in Malta and the UK. Since 1990 David has worked in the financial services arena specialising in pensions administration. David is responsible for driving the expansion of STM Group’s international pensions division as well as personal and occupational pension schemes in Gibraltar and personal pensions in the UK.”

So, responsible for driving the expansion of STM’s pension business into an investment scam run by a known serial scammer? Well done David. Your “primary focus” was very clear: put UK residents into a QROPS and then allow all of them to be 100% invested into an illegal UCIS. And to what extent has he engaged with the hundreds of distressed victims of this scam? Zero. Another spineless coward who refuses to speak to these people. He will neither explain nor apologise.

Other members of this spineless team include Therese Neish – Chief Finance Officer, Liz Plummer – Company Secretary, Ian Farr – Group Head of Distribution, Linda Martin – Technical Services Manager. There are of course many more – none of whom has shown the slightest concern for the plight of the victims who have lost £21 million worth of pensions between them.

Backbone? Heart? Soul? Absolute rubbish!

A former employee of STM Fidecs sent me the following statement:

“We were told not to go to the Pension Life website so as not to give her any traffic and SEO rankings.  I believed them. More fool me. This is why I am now checking it out and am amazed at what’s on there.

I was asked to dig the dirt on Angela Brooks and I did, believing STM had not been aware of the Trafalgar stuff but had instead been duped.  It’s more than apparent now that they fully knew what they were doing. They have sent Angela lawyers letters insisting she cease from mentioning them on her website or will take legal action against her.

Shot in the dark because everything she says is true so they can’t gag her.

Glynis Broadfoot (a victim of Holborn Assets and Gower Pensions) who also used to work for STM Fidecs, was marched out. We had no anti-bullying policy in place at the time and Glynis was being bullied. They marched her out on trumped up charges.

If I had known this at the time I would have objected. Glynis won’t speak though. They must have frightened her to death.

Outstanding staff? I think not. The only thing the STM Fidecs staff excel at is bullying. And bullies are, of course, the biggest cowards of all.

Dolphin Trust – a UCIS which was illegal to be sold to UK residents

The Trafalgar Multi Asset Fund liquidators say this is the most obvious scam they have ever seen. Purely designed through ‘layering’ to misappropriate funds, the liquidators are just glad the administrators pulled the plug at £21m and not later. At the height of the success of this scam, STM Fidecs was accepting more than £1 million a month from UK residents (none of whom should have transferred into a QROPS at all) and allowing it all to be invested in XXXX XXXX’s illegal UCIS.

Apparently, Dolphin Trust (the German fund which borrows money to refurbish derelict government and listed buildings) has “cooperated” and the liquidators have found some other assets as well, although getting them may prove tricky since they will have been vigorously hidden. Dolphin Trust is typically found alongside car parking spaces, store pods, eucalyptus plantations, truffle trees and other toxic crap peddled by the scammers.

The liquidators reckon the victims might get 50% back less costs, so after the liquidators’ costs that would be nearer 30% net. But STM Fidecs know all this, but have deliberately hidden it from the victims.

It is human to err, and STM Fidecs is staffed by humans (albeit spineless ones). But what is not forgivable is to fail to come to the table and assure the victims they will be compensated for their losses and profound distress. STM Group has been bragging that it has plenty of money and will be buying up other trust companies to make their business bigger and more profitable.

None so blind….

STM Fidecs’ victims feel they shouldn’t be in the pension trustee business at all since they are clearly incompetent, dishonest and dishonorable. This belief is clearly correct since STM Fidecs also accepted transfers from Continental Wealth Management (unlicensed “chiringuitos”) and then allowed the victims’ pensions to be 100% invested in high-risk, professional-investor-only structured notes. As a result, the STM members are facing heavy losses.

STM Fidecs is also mentioned in Offshore Leaks and was involved in the Cornerstone Friendly investment scam.

Hundreds of victims have reported both XXXX XXXX and STM Fidecs to the SFO and the GFSC for fraud

The Gibraltar authorities must now show how “highly regulated and transparent” Gibraltar is. As things stand, the evidence is that Gibraltar is full of thieves, scammers and scoundrels. The chiringuitos love being there because the regulation is widely accepted as being as spineless as the staff and directors at STM Fidecs.

**********************************

As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

Follow Pension Life on twitter to keep up with all things pension related, good and bad.

October 30, 2017
CONTINENTAL WEALTH MANAGEMENT – PREMIER PENSION SOLUTIONS’ SISTER CO

Continental Wealth Management closes 29.9.17

Continental Wealth Management (CWM) was a financial advisory firm based on the Costa Blanca in Spain. Headed up by Darren Kirby, there were – until earlier in 2017 – 35 people working at the firm. The firm claimed to have £50 million worth of assets under management and around 500 clients. The firm closed down on 29.9.2017.

During 2016/17, numerous clients of CWM began to realise that their pension and investment funds – managed by CWM – were shrinking in value dramatically. In fact, many clients had seen alarming losses being reported on their valuation statements and had asked CWM for an explanation. CWM had assured the distressed clients that these were “just paper losses” and advised them not to worry.

It has now become clear that in fact many clients have indeed suffered catastrophic losses and there is a very great deal of concern. One victim was taken into hospital on 25.9.17 with a brain hemorrhage and her husband fears that the distress of this situation has contributed to this life-threatening condition.

It is feared that up to 40% of CWM’s clients may have been affected by this situation.

BACKGROUND TO CWM

CWM “advisers” acted as sharks

In mid-2011, Stephen Ward’s Premier Pension Solutions (PPS) lost the lucrative Ark pension liberation scam when the Pensions Regulator placed the scheme in the hands of Dalriada Trustees. Ward had advised 160 victims to transfer £10m worth of secure pensions into this scheme on the promise of having 50% of their pensions paid to them in cash. He also assured them these payments would not be repayable or taxable and that the pensions would be invested in “high-end London residential properties”.

In the event, neither of these assurances turned out to be true. Dalriada is now making claims to recover the 50% liberations and HMRC has issued tax demands at 55% of the cash received (and the tax will still be payable even if the liberations are repaid). The High Court called the Ark scheme a “fraud on the power of investment”.

Having ruined 160 lives, and made up to £1 million profit out of the Ark victims, Ward immediately turned his attention to his next scam: Evergreen New Zealand QROPS and his Marazion “loans”. Having seen how easily victims could be duped into transferring their safe pensions with the promise of 50% liberation, Ward appointed CWM as “introducers” to the scam.

Here is an actual account by one of the Evergreen/PPS/CWM victims of what happened to her:

Mrs. A: “I was first cold called by CWM in 2011. I first met Phil Kelman of CWM in January 2012. I was told only positive things about transferring my pensions and to be able to take 100% of my pension funds.

This, however, changed after the first meeting and I was then told that due to the government closing loopholes I would only be able to get 50% of my pension fund and that the other 50% would be in the Evergreen QROPS earning enough interest over the 5 years to cover the 50% that I could withdraw (before the age of 55) – a win win situation!

There was no mention of the 50% being given as a loan until much further down the line. This was supposed to have taken 6 weeks at the most, but it actually took nearly 10 months. I was told that the “loan application” was a paper exercise just to cover things – I obviously have no proof of these conversations! Due to the fact that in the beginning it was not a “loan” there was no talk of a 55% tax charge, also as it was QROPS I was told it wouldn’t have incurred a tax bill.

I was not given any opportunity to say what the consequences of losing my pension or gaining an extortionate tax bill would be – either in the short or long term. If I had known of the huge risk of losing everything then obviously I would not have gone ahead. I did not state that I was willing to risk everything to get the “loan”.

I was told that Evergreen was a safe place for my pension to be as Evergreen was “approved”. I was given a graph to show how my pension would not only make the 50% back up but make more on top of it.”

Marco Floreale – former CWM “adviser” – now MD of Carrick Wealth

Mrs. A’s case was handled by CWM’s Marco Floreale (now Managing Director of Carrick Wealth) who claimed to be the managing director of CWM. Her secure, final salary, £100k Royal Mail pension was transferred to Evergreen and she was forced to sign a five-year “lock in” before receiving her “loan”. The loan agreement issued by Stephen Ward included annual interest at 8.5% compound which would mean that her £50k loan would have increased to £75k at the end of the five-year term. She was also charged more than £10k in fees.

There are now around 300 victims trapped in Evergreen as they are not allowed to transfer out. Ever. Between them they have lost £10m worth of pensions. The CWM personnel involved in this scam claimed that PPS was their “sister” company and have offered no help or compensation for the victims’ losses and terrible distress. One victim died of cancer in February 2017 and her husband is convinced that the stress of the Evergreen situation brought on the disease.

Phil Kelman, Jon Meek, Robert Pearl, Gemma Broad and Anthony Downs were among the CWM personnel who assured the victims that the transfers were in their interests as well as safe and prudent. It was, of course, later discovered that the Evergreen fund was invested in illiquid, high-risk, toxic funds – including personal, unsecured loans. Evergreen was removed from the QROPS list in November 2012 and the victims have now been told they can never transfer out.

It is not known how many other Stephen Ward/Premier Pension Solutions scams CWM was involved in, but when Evergreen got shut down CWM started acting as “advisers” to British expats in Spain and France. They were still working with Stephen Ward of PPS who provided the transfer advice. It is now thought they advised more than 500 people and that around 40% of these have suffered crippling losses to their investments.

I do not know whether CWM ever disclosed their previous involvement with Stephen Ward’s scams to the clients – although it is doubtful that any people would have felt comfortable using CWM had they known they had been responsible for the 300 Evergreen victims. Certainly, CWM did not disclose their past activities to either Trafalgar International or Momentum Pensions – had they done so they would never have been given terms of business by either firm.

From 2013 onwards, CWM invested hundreds of low to medium risk clients’ investments in high-risk, illiquid assets. CWM completely ignored the suitability issue and paid no heed to the clients’ preference for safe, low-risk investments. Clients’ signatures were repeatedly copied and once the losses started to appear, CWM assured them that there was nothing to worry about and they were “only paper losses”.

When asked why so many clients were put into professional-investor-only investments, CWM replied that the investors themselves were not the clients; but the insurance companies were the clients. When I showed CWM evidence of forged signatures on dealing instructions several months ago, there was no response then and no further communication from them subsequently.

In mid-September, it was reported that Darren Kirby and Anthony Downs had both resigned from CWM and on Friday 29^th September 2017 the firm closed down altogether. CWM is rumoured to have tried to become a tied agent of a Cyprus-based firm called Woodbrook. But it is further suspected that Woodbrook has finally come to the conclusion that such an alliance may not be prudent.

The most important thing now is the restitution of the victims’ funds. OMI, Trafalgar and Momentum Pensions, have come to the table to try to find a solution and restore of the victims’ pensions and investments. If we can achieve an equitable settlement, this will be a first in European financial services. However, the parties who have not come to the table are life offices Generali and SEB, as well as other pension trustees including Concept, Sovereign, Pantheon, Elmo and STM. It is no surprise that STM have not come to the table, because they pulled up the drawbridge in the Trafalgar Multi Asset Fund scam, run by XXXX XXXX – now under investigation by the Serious Fraud Office.

I would like to thank all the victims for their patience so far. But it has now finally run out – unsurprisingly. The mood has darkened and victims want action. A valuable information and commentary resource is the Repdigger forum. One interesting post recently reminded contributors that it was Stephen Ward of Premier Pension Solutions who provided the initial transfer advice. Nothing changes.

Stephen Ward is also connected to Capita Oak.

pension-life.com/top-10-deadliest-pension-scammers-hmrc/

October 1, 2017
TRUSSED BY A QROPS TRUSTEE?

Philip Hammond’s surprise 25% tax on QROPS transfers will leave many advisers and trustees floundering as the industry tries to make some sense of the long-term consequences for expatriates and their pensions. The uncertainty of the “five-year” change of circumstances rule will leave a huge question mark over the offshore landscape.

But while the industry ponders the fall-out of the Hammond organ, the “elephant in the room” is far more sinister: offshore trustees who have accepted business from scammers. This has been a serious problem since at least 2011, and the fall-out is £ millions of pounds’ worth of pension losses and sometimes tax liabilities for the thousands of victims.

Regulators, ombudsmen and financial crime units are now being sent detailed reports on thousands of cases where trustees have either been in league with the scammers or simply turned a blind eye to obvious scams – putting profit before due diligence (either accidentally or deliberately). The distinction between the varying shades of grey is sometimes somewhat subtle, but it always has the same outcome: pension losses for the victims.

The jurisdictions affected include New Zealand, Guernsey, Malta and Gibraltar principally (although not exclusively). Whatever problems there may be with Hammond’s 25% blow job, the culpability of rogue trustees will hopefully now become a hot issue – and victims will stand a better chance of obtaining redress for their losses.

In Guernsey, from 2010 onwards, Concept Trustees was routinely accepting business from Stephen Ward of Premier Pension Solutions. Although Concept was warning some victims that Ward had provided no evidence of regulation or professional indemnity insurance – and refusing to communicate with him – this did not stop Concept from accepting transfers and dealing instructions from Ward. Concept should never have been offering members investments in toxic, high-risk funds such as EEA Life Settlements and Connaught Property Loans. In fact, the FSA had issued warnings about EEA in February 2010, but Concept continued to offer this to low-risk, cautious investors in the full knowledge that it was an entirely unsuitable investment for a pension fund.

At around the same time, Gower Pensions in Guernsey was accepting business from Dubai-based Holborn Assets. The firm was not licensed for pension or investment advice in Spain – or for any activity beyond wearing an expensive suit, regurgitating convincing, high-pressure sales patter and having an impressive leather-bound portfolio. Despite several years of communication with both Gower and Holborn, a derisory amount of compensation for heavy pension fund losses has been offered (and refused).

In 2012, New Zealand’s Evergreen Retirement Trust launched a pension liberation scam with Stephen Ward of Premier Pension Solutions. Three hundred victims – mostly Spanish residents – transferred their UK pensions (aggregate value of around £10 million) to Evergreen and obtained 50% “loans” from Ward’s Cyprus-based Marazion loan company. The loans were financed by the assets of the scheme and the victims were tied in to both the loan and the pension scheme for identical five-year periods. This particular chicken is coming home to roost later in 2017 and it will be interesting to see how the various parties in New Zealand and Spain who were behind this scam will try to escape liability and culpability.

In the last couple of years, pension scammers have moved away from the bogus occupational scheme approach and into QROPS – which they find even easier to use, abuse and lose. In 2015, Malta-based Integrated Capabilities started accepting transfers into their Optimus scheme from unlicensed scammers in the Czech Republic. These same scammers were also the distributors/promoters of one of the toxic, high-risk UCIS funds being used as the assets of the scheme. Despite Optimus having Lombard Bank (purportedly) as Investment Manager, there seems to have been an absolute lack of due diligence or transparency. In fact, had Integrated Capabilities bothered to look a little closer at the scammers they were getting into bed with, they would have seen that one party had been a cold-calling operation behind the Capita Oak £10 million scam.

But Gibraltar’s STM Fidecs probably takes the biscuit – or even the whole shopping trolley. In 2014, STM started accepting transfers from UK residents by an unlicensed firm which had also been involved in Capita Oak and other scams. This firm was not only the adviser but also the investment manager to the toxic UCIS fund that the victims’ pensions were invested in. This fund – the Trafalgar Multi Asset Fund – was invested entirely in German property development loans (which pay handsome introduction commissions to the introducers) and is now suspended and being wound up.

While it is clear that Hammond hasn’t a clue about pensions in general or QROPS in particular, his 25% surprise may have had unintended consequences in that it will shine the spotlight firmly on negligent offshore trustees who facilitate financial crime – either through omission or commission. Whether the regulators, ombudsmen and financial crime units in New Zealand, Guernsey, Malta and Gibralta will order these trustees to compensate their victims remains to be seen. The survival of these offshore jurisdictions as “safe havens” for financial business depends on them cleaning up their act and outlawing unlicensed operators profiting from trustees’ lax approach to due diligence.

The future of the QROPS may be uncertain, but the future of pension trustees such as Concept, Integrated Capabilities and STM Fidecs should be very clear: no dealings with scammers; no toxic UCIS investments; no failing to compensate victims who suffer pension losses through negligence and/or fraud.

March 13, 2017