Tag: FCA

THE BOLLOCKS OF OLD BAILEY
I don’t often disagree with highly-regarded pensions expert Henry Tapper. Too much respect and awe. But his recent blog: “The Balls of Old Bailey” (about Andrew Bailey) merits a polite argument. It has made me cross – not cross with Henry, per se. But cross with the failure of Britain’s culture, government, regulation and legal system to address justice justly (or at all).

Henry has questioned the point of revisiting the balls-up made by former FCA CEO Andrew Bailey and has suggested that “we need to move on”.

The point of examining Bailey’s sickening catalogue of balls-ups is that we must make sure it never happens again. Part of that mission is to follow the example of the criminal justice system: we don’t give convicted criminals a jolly good talking to – or even a good bollocking. We take away their liberty and put them in prison. This is called a “deterrent”.

What did Old Bailey do that was so bad? The answer is, indeed, a long list – starting with British Steel, Toby Whittaker’s Park First and Neil Woodford’s Fund, and moving on to London Capital & Finance and a long list of other mini-bond scams – including the Blackmore Bond. Bailey should have stopped that entire horrific catalogue of investment fraud if he’d been doing his job properly. He could – and should – have prevented hundreds of thousands of victims from losing their life savings and pensions in all of those investment scams.

The advantage to be had from putting the bollocks – and preferably the head – of Bailey on the block is to send out a warning to future FCA bosses. They all need to understand that they are public servants, and that with huge salaries come huge responsibilities. Current overpaid bosses Nikhil Rathi, Christopher Woolard and Charles Randall must be reminded that running the FCA is a serious public duty – and not just an easy stepping stone to an even bigger and better job (however badly they fail consumers).

Bailey’s numerous failures were rewarded with an eye-watering salary followed by promotion to governor of the Bank of England.

But Bailey’s balls-up is by no means unique. He’s in good company with a whole raft of over-paid public servants who have betrayed the public:

Post Office boss Paula Vennells was awarded a CBE for falsely prosecuting hundreds of innocent Post Office subpostmasters for fraud – even though she knew full well they were innocent. In arguably the biggest scandal of corruption and injustice in British history, Vennells oversaw the wrongful conviction and sometimes imprisonment of 700 victims. Many of these people were financially ruined, lost their homes and committed suicide. One pregnant woman was sent to jail, and many marriages and families were destroyed.

Former HMRC boss Dave Hartnett was caught arranging “sweetheart” deals with tax evaders such as Goldman Sax and Vodaphone. And now he’s “got no shame” (according to Margaret Hodge) in taking up another over-paid job with Deloittes.

Former HMRC boss Lin Homer was rewarded for her vast catalogue of disasters and failures with another huge salary and a £2.2m pension

Paula Vennells (left), Dave Hartnett (middle), Lin Homer (right)

But to revert to the failings of Andrew Bailey, Henry has suggested that we need to “move on”. However, those who have lost their life savings and pensions because of the FCA’s defects will have great difficulty putting their losses and harrowing ordeals behind them. Living in abject poverty won’t help them forget. They will certainly never forgive the fact that Andrew Bailey could have prevented them becoming victims of investment scams such as mini bonds, Store First, Park First, the Woodford Fund and Blackmore Global etc.

Henry’s blog concludes that Andrew Bailey, as Governor of the Bank of England, has a great deal on his plate: cost of living crisis, looming recession and Brexit. But does anybody seriously think that such a negligent, lazy, incompetent person is capable of dealing with that lot – when he couldn’t even listen to frantic whistleblowers such as Paul Carlier, Mark Taber and Brev at Bond Review who were offering to do his job for him?

In an entirely different blog, however, Henry talks about the sad case of MP Neil Parish:

This silly twerp got caught looking at lewd images on his mobile in the House of Commons. His excuse was that he thought porn was spelled “tractor”. Parish has now resigned and his political career is almost certainly over. His wife might also be quite cross. He probably won’t be rewarded with a promotion, a CBE or any kind of public “moving on”.

What Parish did was foolish. But he didn’t cost thousands of people their pensions and life savings; he didn’t ruin hundreds of subpostmasters’ lives and send some of them to prison or to their deaths; he didn’t aid and abet hundreds of millions of pounds’ worth of tax evasion; he didn’t overcharge millions of taxpayers or lose their records.

Parish embarrassed himself and was caught doing something unbelievably silly – that hurt nobody except himself (and his own family). But the price he will pay for this will be crippling and may have ruined his life. Meanwhile, Bailey, Vennells, Hartnet and Homer have evaded any kind of sanction and gone on to glittering success, awards and eye-watering pensions.

Move on? Anybody?
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May 24, 2022
Goodbye Bond Review

Brev at Bond Review has been doing the FCA’s job for it for more than four years. He (or she) has warned the public on the excellent Bond Review blog about the dangers of investment scams in the form of “bonds”. While the FCA have sat around doing little of any use – except keeping the cleaners busy in the men’s toilets – Brev has performed the function of an essential lighthouse for potential victims.

Sadly, Brev has announced his (or her) retirement. Having saved potentially thousands of victims from financial ruin, we all wish this magnificent keyboard warrior well. Thank you from all of us who care about exposing investment scams in the face of the FCA’s sickening failure to prevent them.

BondReview.co.uk

Goodbye – from Brev at Bond Review

Regular readers will probably have noticed that the output of Bond Review has continued to drop recently.

In the first year of Bond Review I reviewed over 60 investment schemes that were being promoted to the public; in the past 12 months I’ve reviewed a third of that number.

FCA has repeatedly ignored minibond warnings & complaints for years

Although there are still far too many high risk investment schemes being promoted with impunity to the general public by search engines and social media, there are signs that the tide has lessened somewhat. When Bond Review was founded, there was a constant stream of people signing up for consumer finance forums asking whether London Capital and Finance was a safe investment. That is no longer the case, at least not to nearly the same extent.

In 2017 minibonds were mostly ignored by the press other than very occasional articles warning investors of the risks (and sometimes promoting them). They were also, as covered here extensively, completely ignored by the FCA. That is certainly no longer the case, with the collapse of London Capital and Finance (along with lesser schemes) hitting the mainstream press and the subject of Parliamentary enquiries.

But the main reason I am bringing the blog to a close is that I simply don’t have the time any more. Maintaining the trickle of bi-weekly articles (with regular lapses) has often meant staying up past midnight (and drinking too much wine) simply because it was the only hour in the day available. I have a full-time job, a family, a sports club to get back up off the ground after being shut down during the pandemic, and the blog. Something has to give.

Bond Review has saved investors millions

I remain proud of what Bond Review has achieved. I know for a fact that as a result of my reviews, millions of pounds whose owners could not afford to lose them have been saved from high-risk investment schemes which subsequently collapsed. I know this because the people that ran them told me so in the course of their legal threats.

All I have done for three and a half years is to post the facts, and nothing but the facts, about the risks of unregulated investments, so that investors can make their own minds up. At times this meant my coverage was open to charges of being “anodyne” or “mealy-mouthed”, but it was sticking to what was verifiable and in the public domain that allowed me to stand behind my coverage for this long.

I considered going public with my identity but have nothing to gain from doing so. At least three different people have been identified as Brev by various idiots posting spam online. None of them are me.

Brev remains anonymous

I originally called this article “Indefinite hiatus” but then I remembered how annoying it was when I was reading webcomics twenty years ago and authors would forever be going on “hiatuses” (hiati?) that left you forever wondering whether they’d come back. So no hiatus, just an unambiguous goodbye, and an end to three and a half years that has often been stressful, draining, fascinating, heartbreaking and (emotionally) rewarding in equal measure.

Thanks to all the readers who have read this far. In the early weeks of writing Bond Review I got excited whenever my pageview count went up by 1 (and even more excited when it wasn’t from me). For many weeks posting articles felt like shouting at the bins. The stats, comments and messages of support all helped keep me going for as long as I have.

Oz, writer of Behind MLM

A special thanks to everyone who donated. If anyone feels they have been shortchanged by the sudden cancellation, get in touch via the Contact link above and I will happily refund any previous donations to their source. The handful of recurring donations to Bond Review have been cancelled at my end.

A final credit goes to Oz, the writer behind the website BehindMLM.com, which was a huge inspiration for Bond Review. If there are any readers of both they will have noticed a few similarities of style which are partly homage and partly lack of imagination on my part. It showed that it was possible to shine a light on an under-covered part of the financial world and keep it going in the teeth of concerted and relentless opposition. How Oz has kept it going for a decade (with a much higher output than I ever had) is beyond me.

Comments on all articles will be closed in a week on June 1st. I will continue to pay the hosting bill to keep Bond Review up for another year. It will then close for good on 25 May 2022.

I can continue to be contacted via the contact link here.

All of the investment-scam bonds that Bond Review has blogged about

Have you thrown in the towel due to legal action?

When I started Bond Review I knew I needed to be prepared to stand up for myself in court, or there was no point in writing articles on this subject in the first place. A total of 13 different investment schemes have made legal threats to me. None of them have gone to court. Until today I had (unless memory fails me) withdrawn one solitary article from publication: a report on Blackmore Bonds‘ brief sponsorship of the Kent Police rugby team.

So any suggestion that I have been intimidated into shutting down the blog is a perfectly reasonable guess but incorrect.

Nor have I been paid off. I have never (despite offers) accepted money to remove any article from Bond Review, and never will.

A number of articles have been pulled from view today because keeping them up for another year is not worth the time and money it would require. This should not be misinterpreted as an admission that anything in them was false. I cannot comment further. There are special circumstances and anyone who thinks I might be persuaded to pull other articles for no reason (before the website closes) should save their breath.

Brev has been careful not to lay too much overt criticism at the door of the FCA. This may have been a conscious effort not to divert too much attention away from the fraudulent, risky bond investment itself. Or it may have been in order to focus attention on the necessity to educate consumers. Whatever the real purpose, Brev pulled no punches in the blog which did openly slam the FCA’s disgusting culture of laziness, slovenliness and negligence in this powerful blog: “FCA officials shit on the floor, as well as the bed“.

Bye bye Brev x 😘

June 3, 2021
Paul Feeney of Quilter and the Marshmallow Regulator

One of my all-time favourite comedy lines is Greg Davies describing his middle-aged love life as “like trying to stuff a marshmallow up a cat’s arse”. My second-favourite comedy line is “Andrew Bailey has been such a failure at the FCA, that we’re going to put him in charge of the Bank of England”. My third favourite is “the FCA’s practitioner panel is going to be headed up by Paul Feeney of Quilter”.

With the exception of Greg Davies’ somewhat risqué pun, the other two are both true and sickeningly serious.

Victims of the FCA’s multiple failures to take action (despite urgent warnings by courageous whistleblowers) will be horrified at Bailey’s elevation to the “top job” as his reward for betraying so many thousands of investors.

Victims of Quilter (previously Old Mutual International and Skandia) will be appalled that such a pariah of financial services can be held up to be an example to financial services practitioners.

It might, of course, be that I am mistaken – and that Feeney is being brought in as an example of how financial services should NOT be run, and how financial advice should NOT be provided.

But, sadly, I think the “old boys’ network” has worked its magic and the FCA elite have closed ranks with Quilter’s elite, to dominate control over pension and investment scams. It is clear that neither the so-called “City Watchdog” nor the insurance giant – specialising in pointless insurance bonds and toxic investments – want to see financial services cleaned up.

If any financial services consumer is unclear about the FCA’s multiple failures in the matter of the collapsed London Capital & Finance “bond”, they only need to read Bond Review’s piece on the Dame Gloster report. Along with “The FCA told potential investors that LCF was not a fraud, and FSCS protected“, “the FCA took no follow-up action to verify that all LCF’s investors qualified as high-net-worth and sophisticated” and “The FCA consistently treated LCF’s unregulated bonds as not its problem“, Dame Gloster pulls no punches when she outlines the FCA’s many disgraceful and negligent failures.

From Andrew Bailey at the top, to the members of FCA staff who defecated on the men’s bathroom floor at the bottom, Dame Gloster’s report demonstrates that the FCA simply doesn’t understand pension and investment scams. Apparently, an FCA supervisor had admitted that “there is little training on how to identify financial crime within the FCA’s Supervision division”.

Put simply, if the FCA can’t keep its own bathrooms clean, how on earth can it help clean up the crap in the world of financial fraud?

The FCA clearly does not understand that unregulated, high-risk, toxic investments are simply not suitable for ordinary retail investors. And this is why the appointment of Quilter’s Paul Feeney is so anomalous: Quilter has for years specialised in peddling these kinds of high-risk investments to low-risk investors. The graveyards of thousands of Quilter victims’ investment portfolios is littered with the rotting remains of many funds and structured notes.

A regulator’s “Practitioner’s Panel” should ideally be headed up by someone who understands how financial services firms should be run; someone who eschews the fraudulent and disloyal practices of the “cowboys” and “chiringuitos”; someone who has shown the will to outlaw illegally-sold insurance bonds whose sole purpose is to make thousands of victims poor and dozens of scammers rich.

Instead, the FCA’s panel is going to be under the control of someone who has actively promoted high-risk investments to low-risk investors.

So, it would seem there is no hope that the FCA will ever be reformed – just as there is no hope that the top dogs at Quilter will ever brought to justice for facilitating so much financial crime. The two rogue organisations are going to jog along cosily, side by side, with no remorse for their own failures and culpability.

It is hard for pension and investment scam victims to comprehend the apathy towards reform of regulation in the UK. Experts such as Henry Tapper, Mick McAteer, Martin Hague, Paul Carlier and Gina Miller have long banged the “reform” drum. But this has largely fallen on deaf ears. And, of course, Dame Gloster’s report will be largely ignored.

This is all cronyism at its worst. And shows that neither the Treasury nor Parliament truly understand what is so very wrong with financial services in the UK (and also offshore). Select Committees, such as the Work and Pensions one chaired by Stephen Timms, can debate all day long – but until the FCA is scrapped and rogue “wealth” and “life” (in reality, poverty and death) companies like Quilter are shut down, nothing will change.

Dame Gloster has written about the “wickedness” of the FCA’s failures to protect the public (from investment scams such as London Capital & Finance). Part of this evil is the failure to recognise the dangers of unlicensed scammers – the motley assortment of unlicensed “introducers” – both onshore and offshore. But, of course, this is what Quilter’s business is based on – so the appointment of Quilter’s Paul Feeney will only protect and nurture this branch of financial crime.

Quilter has for many years given terms of business to assorted scammers, prostitutes, murderers, fraudsters and conmen (and women). With the acceptance of thousands of investment instructions from these unruly hordes of low-life, unlicensed, unqualified criminals, Quilter has built up a successful and profitable business based on ruining innocent victims’ lives (and killing some of them in the process).

Dame Gloster’s excellent, comprehensive and severely damning report provides almost 500 pages of details of the FCA’s disgraceful failings.

But if you haven’t got time to read it, just read FT Adviser’s one-page article on “Quilter boss Feeney to head up FCA panel”. Then zoom down to the bit that says: “Paul has served on the panel for a number of years and appreciates the important role it plays in ensuring our regulation is targeted and effective.”

Then go and have a good cry. And a packet of marshmallows.

February 5, 2021
Chancellor must dump Andrew Bailey
Dear Mr. Sunak

I write to implore you on behalf of the British population in general; British victims of financial services scams in particular and the financial services industry in the UK, to dump Andrew Bailey as the next governor of the Bank of England. Immediately.

Secondly, I urge you to sort out the FCA, the Pensions Regulator, HMRC, FOS and POS, the Insolvency Service and the police authorities. Limp, ineffective regulation and law enforcement have long been the facilitators of pension and investment scams in Britain. This devastating and highly embarrassing failure on the part of the British government for so many years has got to be addressed – once and for all.

The case of Andrew Bailey’s appointment as governor of the Bank of England is one which demonstrates beyond doubt that both failure and fraud are rewarded in equal measure in the UK. Bailey has single-handedly proved that Britain’s government and authorities care not a jot about the reform of the toxic element of British financial services. Bailey has turned his back on our country; our people; our reputation as a financial services centre which should be the best in the World. Sadly, Britain has now become not just one of the worst in the World, but a laughing stock internationally.

https://www.youtube.com/watch?v=tBGVB2OWBYc

Those who are laughing loudest are the scammers and fraudsters who have made fortunes – repeatedly for years – out of innocent, hard-working British people. The criminals are still out there, scamming away merrily, while the FCA does nothing. This sends out the message that while petty burglars who steal a few hundred pounds’ worth of goods may get prison sentences, those who steal millions are left free to continue to ply their evil trade and ruin hundreds – sometimes thousands – more innocent lives. And all because neither the FCA nor any other British government agency or law enforcement service is willing or able to bring these filthy criminals to justice.

Your predecessor, Sajid Javid, made one of the biggest bungles in British history by appointing Bailey as the next governor of the BoE and acclaiming him as an “outstanding candidate” in the wake of his years of negligence and outright laziness at the FCA. It is clear that Boris Johnson manoeuvred Javid out of office by insisting he should sack all his political advisers. The fact that not one of them came out publicly to condemn Javid’s appalling judgement, demonstrates their incompetence. And they should never have any place in British government again.

Bailey’s multiple failures have been showcased by many prominent financial services figures. Well-respected True and Fair Foundation’s Gina Millar has publicly shamed the FCA and Bailey’s long-standing record of miserable failure.

https://www.investmentweek.co.uk/news/4011346/gina-miller-calls-chancellor-review-andrew-bailey-appointment-boe

Miller has quite rightly warned that Bailey’s appointment as governor of the BoE would be a gross betrayal of consumers’ interests. She has eloquently described Bailey’s and the FCA’s catalogue of negligence, incompetence and indifference. She has listed the many failures which have resulted in thousands of British citizens losing their life savings:
- M&G Property Fund £2.5bn +
- Woodford EI Fund £1bn +
- London Capital and Finance £236m +
- Dozens of fraudulent investment bonds
- Dozens of fraudulent investment funds
- Dozens of fraudulent banks
- Thousands of victims who have lost a lifetime’s taxed savings and wasted a life of hard, diligent work.
The finance ministry has apparently argued that Britain needs experienced, credible leadership. And it is right. But Bailey is not credible (except with the scammers) and his experience at the FCA is limited to weakening and discrediting financial regulation.

Ask yourself why FCA staff have problems: they have mental health issues; they are demoralised and resentful of their masters; they defecate on the floor; they vandalise the kitchens.

On top of this, the FCA has been fined by the Pensions Regulator for not following regulations, and have wrongfully published complainants’ data on the FCA website. This extensive list of embarrassing and shameful failures cannot be explained away with a wave of Bailey’s grubby hand. The ethical sector of the financial services industry is paying for all this through FSCS levy hikes and vastly increased PII premiums. And the buck stops with the chancellor, Mr. Sunak.

Campaigner Mark Taber – a professional investor – has successfully shown the FCA that their job can, and should, be done relatively easily. All it takes is the will and incentive to do the work. In a matter of weeks, Taber has identified dozens of mini bond scams which are being openly promoted by Google. And the FCA has done nothing. Admittedly, the FCA might be somewhat rudderless while Bailey measures himself for a new suit and Mont Blanc for his new gig at the BoE, but they’ve shown zero interest in the fact that all it takes is for someone to actually care about financial services and for the public to be warned effectively. And further, for these fraudulent mini bonds to be banned and those responsible for promoting them (including Google) to be sanctioned.

Mark Taber https://www.ft.com/content/83485d90-f832-11e2-92f0-00144feabdc0#axzz2bTtvusN4 is doing the FCA’s work for nothing. Because he believes the public have a right to be protected.

Gina Miller https://en.wikipedia.org/wiki/Gina_Miller#True_and_Fair_Foundation is trying to protect the public from the failures of the FCA and Andrew Bailey.

Look on Twitter and see the cacophany of financial services professionals – some highly respected and high profile – who are embarrassed by and furious at the FCA’s multiple failures. Ask the thousands of victims of financial scams in Britain and beyond. And ask the loved ones of those who have died due to the FCA’s and Andrew Bailey’s multiple failings. Then ask yourself: do you really think Bailey should be the governor of the Bank of England?

This disgusting mess needs to be sorted out once and for all. The British authorities and government have facilitated – and even encouraged – financial crime for more than a decade: openly and brazenly. And you, Mr. Sunak, are now firmly in the hot seat. I do hope you are wearing neoprene y-fronts – because you are going to need them.

For several years, it has been claimed that there is an alliance called Project Bloom – of which the FCA and tPR are supposedly members. But what has this so-called project achieved? Pension and investment scams are flourishing more successfully than ever, and very few of the fraudsters are behind bars. Still the victims of pension liberation scams are the ones facing penalties from HMRC while the scammers luxuriate in their country mansions and Florida holiday homes, sipping champagne and having a good laugh at the ineptitude of the British authorities.

I will be writing to you openly and publicly over the next few weeks to encourage you to do the right thing. If Bailey’s appointment as governor of the Bank of England goes ahead, it will thoroughly discredit Britain and the British government. Your tenure as chancellor will be recorded in history as starting on a shameful note. Boris Johnson will be remembered as the prime minister who disgraced Britain and destroyed the reputation of Britain’s financial services.

Johnson is already on shaky ground as he promised to help and support some of his constituents who had fallen victim to the Ark pension scam (and has subsequently betrayed them by doing nothing to honour his promises). The action you take next will determine whether you are another betrayer of the interests of consumers, or whether you have the balls to be proactive.

Read Henry Tapper’s wonderful blogs:

Ever wondered where those “pension leads” come from?

Talk to some victims who’ve had the courage to take their case to a Spanish criminal court: https://www.thisismoney.co.uk/money/pensions/article-8044237/Victims-rogue-pensions-scandal-fight-courts.html

Talk to Dalriada Trustees who are custodians of more than 30 scam pension schemes (but who don’t think it is their remit to report the perps to the police or initiate private criminal prosecutions). Ask them how many of the schemes promoted and run by Stephen Ward and Peter Moat (since 2011) they now have under their control: https://www.fscs.org.uk/failed-firms/1-stop-fast-pensions/

Go onto the Blackmore Bond and Global Fund Facebook Group and read the anguish of the betrayed lenders/investors: https://www.facebook.com/groups/498072800835888/

But most important of all, go onto the Smith and Williamson website and read about what the FCA can do if it puts its mind to it: https://smithandwilliamson.com/en/services/restructuring-and-recovery-services/park-first/

Having known about the high-profile Store First matter in 2014, the FCA is only now taking regulatory action against Park First more than five years later. The funds of the 6,000 Park First investors have now been used to pay several £ millions in fees to Smith and Williamson and their lawyers Mishcon de Reya and Park First’s lawyers Paul Hastings. And all because five years after the event, the FCA decided Park First was a collective scheme. Five years after 6,000 people have invested in the scheme.

But Park First exists. The car parks exist. And they are making money. The FCA could have gone to the airports where the Park First car parks are operating. Andrew Bailey could have driven his (undoubtedly luxurious) car into the Park First car parks and actually stood on the tarmac and watched the thousands of other car park users doing the same.

Then Bailey could have asked what were the assets of Woodford, M&G Property, LC&F, Blackmore Bond and Blackmore Global Fund. And he could have done the maths. But, of course, he didn’t bother.

Mr. Sunak – you can be a hero or a disgusting disgrace. You choose.

Regards, Angela Brooks – Pension Life
March 3, 2020
Pension Life – Pension File November 2019

FCA and FOS continue to dismay and disgust; CWM criminal case set to change offshore financial services; Forged dealing instructions epidemic; Offshore advisory firms without an investment license.

It now emerges that on top of a failed “City Watchdog” (the Federated Consolidation of Apathy) we also have not just one, but two failed ombudsmen.

The FCA has had a light bulb moment as it announces a “temporary ban” on the promotion of unregulated mini bonds. This so-called “nuclear” option is due to start in January 2020 and is scheduled to last for just one year. Presumably, the FCA will have lost interest by then. Or perhaps the huge effort required to teach FCA staff how to use a toilet will have exhausted them anyway. Maybe the new parliament will close the whole thing down and set up a proper regulator – ideally run by a mixture of proper professionals and also some victims (who are the real experts on regulatory failures).

In an “FFS!” moment, the FCA is now rivaled by the FOS as it too is exposed as a failure by the Glassdoor employees review site. One FOS employee reviewer stated: “Management has been hauled up in front of the Treasury on more than one occasion; it has received and continues to receive negative comments on Glassdoor; it has been subject of investigation by Dispatches but nothing has changed.” Sounds just like the FCA – at least the two organisations are consistent in a unified manner. Perhaps Amerdeep Somal (Head of the FOS) and Andrew Bailey (would-be Head of the Bank of England) consider this to be a good achievement?

Sadly, the Pensions Ombudsman is no better either. Complaints where negligent, lazy, apathetic ceding providers – such as Standard Life, Aviva, Prudential and Scottish Widows – have handed over £ millions to pension scams, are not upheld. The Ombudsman’s excuse is that the “Scorpion” campaign which warned the public and the industry about the dangers of pension liberation fraud was not published until February 14th 2013. The Ombudsman conveniently forgets to mention that there had been a very clear and loud warning back in 2010 – by OPRA (the forerunner of the Pensions Ombudsman). But it would seem that no British regulators or ombudsmen ever let the truth get in the way of defending big, toxic institutions which are “too big to fail”.

In Spain, the Criminal Justice System has, at long last, decided that the CWM (Continental Wealth Management) scam run by Jody Smart, Darren Kirby and an assortment of silver-tongued scammers must be brought to justice. This follows a year-long initiative to document the £100 million scam operated by the Costa Blanca based firm and facilitated by life (death) offices Old Mutual International, SEB and Generali. It is hoped that Smart, Kirby and the rest of the motley crew of advisers such as Dean Stogsdill, Anthony Downs, Neil Hathaway, Richard Peasley, Phill Pennick and Dennis Radford will serve long prison sentences.

The Spanish criminal court has made an order that the life offices (OMI, SEB, Generali) and all those connected to Continental Wealth Management – and who facilitated their crimes in the years up to 2017 when the firm collapsed – will be called to give evidence. In particular, the risk profiles and forged signatures on dealing instructions will be brought into evidence. https://www.youtube.com/watch?v=lYlxu8YOaAM&t=12s

Part of the Continental Wealth Management scam was the repeated use of forged signatures on dealing instructions. This practice became accepted by life offices such as OMI from 2010 onwards as the volume of business coming in from scammers became extremely lucrative. Scammers such as Darren Kirby and his team of bogus “advisers” (who went on to work for firms such as Spectrum IFA Group and Pennick Blackwell) would use a blank dealing instruction bearing the victim’s signature to “churn” the fund and maximise the commissions earned. The favourite investments were structured notes from rogue providers such as Commerzbank, Royal Bank of Canada, Nomura and Leonteq.

Old Mutual International, SEB and Generali accepted thousands of dealing instructions from scammers such as Continental Wealth Management. On top of knowing full well that such firms had no investment license (in fact, CWM had no license of any kind) and no qualifications to give investment advice, OMI and the other rogue death offices repeatedly accepted these dealing instructions with obviously forged signatures.

CWM and a number of other firms would trick victims into signing a blank dealing instruction. Then they would countersign it with an illegible signature. These blank investment forms would then be photocopied repeatedly – sometimes for many years – as the victims’ funds were churned and repeatedly invested in high-risk investments such as toxic structured notes.

Old Mutual International actively encouraged this financial crime by paying unlicensed scammers like CWM 8% commissions to flog expensive, unnecessary life bonds – and then flog the risky, toxic investments offered on the life office platform.

One of the structured note providers – Leonteq – is now being sued by OMI for the £94 million worth of especially toxic notes sold to hundreds of victims to destroy their funds and pay the scammers an extra 2% commission “under the table”. However, OMI put these structured notes on their platform in the first place, and accepted the forged dealing instructions in the second place. Difficult to see how this was anyone’s fault other than Old Mutual’s.

Part of the syndrome of offshore financial crime being routinely accepted by life offices, is the proliferation of “advisory” firms operating without being fully licensed. There is a cheesy urban myth that a firm can give investment advice if it flogs victims an insurance bond and then picks from the selection of toxic, high-risk investments being offered by the bond provider. This isn’t deemed to be “investment advice” as the so-called adviser is merely assisting the investor to make his own decisions (i.e. give himself advice). This practice has gone on for years – and is still going on with firms such as Spectrum IFA Group which openly advertises the fact that it gives investment advice, even though it has no investment license.

While the FCA wouldn’t have the slightest interest in what goes on offshore (after all, it doesn’t give a toss what happens in the UK either), the Malta FSA has at least made sure that only licensed advisers give investment advice on Malta’s watch. An advisory firm with an insurance license can still flog insurance bonds that few people need and even fewer can afford, but Malta will no longer accept investment advice from such “Chiringuitos” (Spanish for financial scammer). This has, of course, resulted in an exodus to Gibraltar where the scammers can pretty much do what they like. The Gibraltar Financial Services Commission actively encourages scams. STM Fidecs – bogus QROPS trustees for the Trafalgar Multi Asset Fund scam (under investigation by the Serious Fraud Office) – and the Blackmore Global investment scam perpetrated by serial scammers Phillip Nunn and Patrick McCreesh – are still flourishing happily on the Gib rock. The Gib FSC stands idly by and does nothing. Obviously, the Gib lot are trying to emulate the FCA – and succeeding happily.

It will take more than a few fireworks to clean up the financial services mess in the UK, in expat jurisdictions across the globe, and in the FCA’s toilets.

December 2, 2019
Protest 6th November against FCA failures

There is no question: Andrew Bailey has failed; he must go – the FCA has failed; it must be replaced by a proper regulator.

Wednesday 6th November will see victims of failed investments – repeatedly promoted by negligent or fraudulent “advisers” or brokers – protesting outside the Bank of England from 8.30 a.m. onwards. Hopefully this will make the government wake up, stop messing about with the Brexit debacle, and take some useful action to reform financial services in the UK.

As things stand, the UK is a national disgrace: we have a feeble regulator headed up by an embarrassing and expensive failure: Andrew Bailey. His only interest seems to be his candidacy to replace Mark Carney at the Bank of England. God help Britain if Bailey gets the job – we’d all be doomed and our country would sink.

Look at the disgusting list of failures by Andrew Bailey and the FCA: Woodford; London Capital & Finance; RBS and many more including those highlighted by Bond Review.

Bailey and the FCA are guilty of a lot more than just failure. The FT has reported: Politicians condemned as a “complete whitewash” a long-awaited report by the UK’s financial regulator over why it failed to take action against the Royal Bank of Scotland over its disgraced restructuring unit.

A year ago, the FT’s journalist Alan Miller wrote: ” I believe that the FCA’s own culture and governance fails the test on consumer protection, integrity and competition — all statutory objectives.” Miller goes on to write: “A judge that cannot be bothered to listen to arguments or evidence is not fit to be a judge.”

The press; the industry; the public all say the same. Evidence shows the FCA has failed repeatedly for years – and there ‘s no sign of this changing. There has to be a root-and-branch reform: starting with the immediate removal of Andrew Bailey.

I hope as many betrayed investors and the press will turn up and make their voice heard.

November 3, 2019
£1 billion + investment losses in 2019

By August 2019, one billion pounds’ worth of investments had been lost. That’s an awful lot of noughts: £1,000,000,000 (I nearly ran out of fingers). How many hours’ worth of work went into earning that huge amount? How many miles of travelling to work to earn that money? How many dreams have been shattered? How many lives ruined?

This was published in Brev’s Bond Review. But, of course, that was when there was still 25% of 2019 left – plenty of time for another couple of hundred million to go down the toilet.

I have great respect for Brev who does a wonderful job in informing the public about investment disasters. In fact he (or she) could (and should) replace the FCA single-handedly.

With absolutely no respect to Brev intended, however, my blind and senile dog could do a better job than the FCA.

Brev highlights the fact that these high-risk, illiquid investments – which might be fine for investors with more money than brain cells – were all targeted at low-risk, retail investors.

They all promised the same old same old “guaranteed” returns – and had slick marketing and promotion machines behind them. Here’s Brev’s depressing and desperately sad list:

London Capital and Finance £230m

MJS Capital £30m

Mederco £27m

Store First £200m

Harewood Associates £33m

Park First £190m

Allansons £20m

Hudspiths £50m

MBI £50m

Carlauren £88m

So what did all these investment disasters have in common? They were all unregulated; all fiercely promoted and offered fat commissions to the scammers who flogged them to unwary victims; all promoted by the bottom feeders (interpret that as you will) of the financial services world.

Brev also draws attention to the government’s failures to take any action to deal with this catastrophe. Any sensible government would have immediately sacked Andrew Bailey and ordered a radical reform of the regulators from the top to the bottom (that word again!).

Along with an intelligent suggestion to “close all Intelligent Finance ISAs immediately to new business and reserve tax relief for regulated investments”, Brev also mentions that the Chair of the Treasury Select Committee was extremely cross about it. Phew, well that’s alright then!

However, to add to this horribly depressing big number with nine noughts, there are a few other impending catastrophes in the pipeline. These include:

Dolphin Trust (German Property Group); Blackmore Bond and Blackmore Global; Future Fuel Renewables Plc, anything on the Old Mutual International “platform”; dozens of property developments (for students, the elderly, young professionals) guaranteeing 6% to 12% returns (cluttering up my inbox every morning).

Plus, we still don’t know what the future holds for the precarious Woodford Equity Income Fund. If that collapses we could add at another £ billion to the cricket score.

So, in fact, 2019’s losses could well be nearer £1.5 billion by Hogmanay. But Brev draws our attention to the fact that the FCA costs us £1 billion a year to run – of which £600k accounts for the Mumpsimus Andrew Bailey (who couldn’t regulate his way out of soggy paper bag even he was paid an extra couple of hundred grand – and assisted by my dog).

Bearing in mind the FCA is a total waste of money, we could well be £2.5 billion out of pocket by the end of 2019.

Does Andrew Bailey look bothered?

September 9, 2019
DB transfers: FCA hasn’t a Scooby
The FC A hasn’t got a ****ing Scooby. The Federation of Consolidated Apathy has now proved way beyond reasonable doubt that it is clueless about pensions in general. And worse – much worse – that it doesn’t understand the deadly problems with DB pension transfer advice.

The Federation of Consolidated Apathy has published a video which deliberately misleads people into thinking that advisers will provide DB transfer advice which is in the victims’ interests.

This incredibly boring video seems to have been produced by some clot called Mark Goold who claims to work for the “Communications Division” of the FC A. He clearly has no understanding of communications since he has made a video that is so incredibly monotonous and dreary that it is impossible to watch – and even harder to believe. Either Goold knows nothing about ten years’ worth of DB pension transfer scams – or he is deliberately ignoring it.

Goold the goon says he “wants to talk about our expectations of financial advisers when they provide pension transfer advice”. A noble aim – just a shame he did no research before opening his mouth (and putting his foot in it). If he’d had even half a brain, he would have consulted the British Steelworkers before making such an utter fool of himself. Equally, he could have consulted a few of the thousands of victims of DB scheme members who have been scammed over the last few years because of FCA-regulated transfer sign-offs.

The one thing that Goold says that is true and accurate is “it will generally not be in a client’s best interests to leave a pension scheme that will provide them with a guaranteed and sustainable income when they retire”.

But he does not say what action the FCA is proposing to take against the negligent – and, in some cases, fraudulent – FCA-regulated advisers who have been signing off such transfers for so many years. These firms have facilitated widespread financial crime and this has led to the destruction of millions of pounds’ worth of pensions. But the nits at the FCA are far too busy knitting to take any action against these firms.

The FCA goon goes on to spout: “we would expect advisers should follow certain steps, ask certain questions and provide specific documentation when reviewing your personal situation and recommending something to you”. He then goes on to list a number of “steps” that should “generally be carried out” by advisers. But he forgets to mention that the unethical FCA-regulated transfer advisers will deliberately omit these steps. These rogue advisers may be relatively rare, but they will – between them – feed the majority of the scammers in the UK and offshore.

Of course, the subject of “contingent” charging has not reared its ugly head. The Federation of Consolidated Apathy is obviously expecting advisers to make a choice:
1. Advise to transfer and earn a fee or
2. Advise not to transfer and earn nothing
I expect ethical advisers will easily walk away empty handed – happy that they’ve done the right thing (and prevented a transfer to criminals). But that’s a bit like expecting that a regulator will do a bit of regulating between knitting sessions. There are, of course, plenty of decent advisers in the UK – but their reputation is called into question because of the few FCA-regulated snorters.

Finally, after a load of excrutiatingly boring waffle about what the FCA “expects”, Goold gets to the most important question of all:

“Did the adviser explain that the employer scheme provides a guaranteed income in retirement? Did they explain that, if you transfer, you may run out of money. You may live longer than your pension does?” – how would you feel about that?

Goold clearly comes from the planet Zogolob. And he really ought to go back there asap before he poses any more daft questions such as: “How would you feel about running out of money?”. What the hell does he expect a client to say: “Fine, thank you. I can just print some more if I need it. Or if the money printer is out of ink, I’ll just go pick some from the money tree”. Beam me up Scottie FFS!

This moron then goes on to raise the very issue that the scammers use to dupe their victims: CONTROL. The criminals of the financial services world use “control” as a powerful weapon to seduce clients into transferring their DB pensions – not so the member can have control but so the adviser has control.

Having passed control of the pension over to an unscrupulous – and often criminal – adviser, the rogue FCA-regulated transfer sign-off then facilitates a number of fatal steps which will guarantee the destruction of the fund. And, inevitably, will guarantee that the victim will run out of money.

There are two types of crimes that then follow – depending on whether the victim is in the UK or offshore.

Arguably, if the victim is based in the UK there may be less risk and more protection. But you can ask the many thousands of scam victims who have lost their life savings as to whether this is true. The answer is likely to be that the actual protection is slightly less than an ashtray on a twist’n go.

The Goold twerp should have asked not just the British Steelworkers but also the victims of the London Quantum scam; the Berkeley Burke, James Hay and Suffolk Life SIPPS scams; Ark; Capita Oak; Westminster; STM Fidecs/Trafalgar Multi Asset fund; Integrated Capabilities/Blackmore Global fund; GFS/Blackmore Global and dozens more. But, of course, he didn’t bother.

These UK-based victims saw their funds being transferred to bogus occupational schemes or negligent SIPPS and QROPS providers. The money was then destroyed by being invested in worthless assets – such as store pods, car parking spaces, derelict German buildings, collapsible flats in Cape Verde and mouldy chia seeds.

Offshore victims fare even worse in the hands of rogue commission-hungry scammers:
1. The fund will be under the full control of a rogue “adviser” who could well be unqualified – and whose only mission is to rinse commissions out of the victim’s retirement money
2. This adviser could well be with a firm which only has an insurance license (if it has any license at all) – so any investments made by the firm will have zero regulatory protection
3. The funds will then be transferred to a QROPS. And the degree of regulatory observance by the QROPS provider will depend on the jurisdiction. Malta is now getting its act together, but Gibraltar still has no ombudsman or arbiter. And seems to actively encourage scams and scammers. A QROPS may be entirely the wrong vehicle and a low-cost, UK-based SIPPS could be a much better solution. However, leaving the pension where it was would, undoubtedly, have been the best choice (but wouldn’t have earned the scammers any commissions).
4. The scammer, now fully in control of the victim’s life savings, will transfer the whole lot into an insurance “bond” with a rogue firm such as Old Mutual International, Friends Provident International, RL360 or Hansard. This will earn the scammer 8% on the amount invested – and could lock the victim in to this arrangement for up to ten years. The scammer will ignore the fact that he is committing a fraud.
5. The “bond” provider will now claw back the commission paid to the scammer over the term of the contract – plus, of course, the life office’s own commission.
6. The life office (Old Mutual, Friends Provident etc) will then offer the victim, and his scammer who now has total control over how the fund is invested, a selection of high-risk, expensive funds and structured notes which will pay the scammer further fat commissions. Many of these funds – such as Axiom, Premier New Earth, Mansion Student Accommodation etc will fail and become worthless. The high-risk structured notes – such as Commerzbank, Royal Bank of Canada, Nomura and Leonteq – will destroy most (if not all) of the victims’ funds.
7. The scammer will lie to the victim and say that the “bond” is necessary for tax efficiency. This, of course, is untrue since there are only any tax savings if the fund makes a profit – which it won’t.
Goold goes on to mention that “Having more control over your pension money may be important to you but if you have to transfer your pension fund to enable you to do it, it may impact on your family and lifestyle.”

Being obviously clueless, this moron forgets to mention that many of the victims of the devastating “impact” on their family and lifestyle are dying. They are devastated by the loss of their valuable pensions and are facing a wretched, poverty-stricken retirement. Many are considering suicide. Some have already taken their own lives or died miserable deaths caused by stress.

Goold plumbs new depths by claiming that the FCA “would also expect advisers to carry out a detailed comparison of the benefits available in the employers’ pension scheme against the benefits available in any proposed new arrangements”. But he clearly hasn’t bothered to find out what the devastating consequences of the “new arrangements” are likely to be.

Goold has also failed to mention that some of the transfer advice is given with only one single aim: to earn commission on the fund value. The advice is almost always “yes, go ahead and transfer” – irrespective of whether it is obviously not in the victim’s interests.

An example of this is Stephen Ward of Premier Pension Solutions who signed off many hundreds of DB pension transfers knowing full well that he was condemning the victim to certain death at the hands of the scammers who would gain control of the fund and would inevitably destroy it.

There is no possible argument that Ward did not know how the victims’ funds were going to be invested – because he himself was doing the very same thing to his own clients.

In fact, the tactic is now changing so that the standard DB transfer advice is routinely “DON’T TRANSFER – IT IS NOT IN YOUR INTERESTS”. The victims are carefully prepared for this and are classified as “insistent” – so the transfer goes ahead anyway.

Finally, Goold commits the ultimate in offensive indecency and suggests that victims should ask: “What are the death benefits available within the employers’ pension scheme against what are the death benefits available in any proposed new arrangement?”

This cretin should have asked me before committing such a vile gaff. I could have referred him to the case of one of the Continental Wealth Management victims – whose £415,000 Shell DB pension fund was totally destroyed. The stress of facing poverty killed him in July 2019. He had not one single penny left. His ex wife had to pay for his funeral.

FCA morons such as Goold should not talk about “death benefits”. Goold, and his expensive boss Andrew Bailey, should try talking to the pension scam victims so that they understand just how dreadfully the FCA has failed the public.
September 9, 2019
FCA boss £589,000 – Whistleblowing team £500,000
THE DIZZEE RASCALS AT THE FCA:

My exasperation and disgust at the FCA’s incompetence has for years been very profound. However, learning that Andrew Bailey – CEO of the FCA – gets paid 18% more than the whole whistleblowing team of 12, has made me feel two things:

Enormous respect for the gentlemanly and (IMHO) restrained manner in which Henry Tapper has written his blog about the FCA and Debbie Gupta. The latter is blaming IFAs for “failures to call out bad practice” and claims her “view of the industry is not as positive as it could be”.

Sick

DEBBIE GUPTA – FCA’S CO-DIRECTOR OF LIFE INSURANCE AND FINANCIAL ADVICE SUPERVISION

I have never come across Debbie Gupta before. I am wondering what planet she has been on for the past six years. Victims, concerned members of the financial services industry and I have literally been hammering at the FCA’s door repeatedly. And all we have to show for it are red knuckles and chipped teeth from excessive gnashing.

In his blog, Henry quite rightly points out that “The spirit of collaboration will win, confrontation won’t.” It is a well-known fact that one wins more battles with honey than with vinegar. But two terrible wrongs have to be righted: Gupta must learn not to spout utter garbage that she knows nothing about. And Andrew Bailey must be sacked.

Let us be clear: the FCA is an embarrassment to Britain.

The cost of the FCA’s many failures is borne by IFAs in terms of levies to the FSCS as well as soaring professional indemnity insurance premiums. And the thousands of victims whose lives have been destroyed by fraudsters operating under the very nose of the FCA.

Before Debbie Gupta sticks her big foot in her mouth any further, I would suggest she attempts to learn something about scams, scammers and scamees. She should come and spend a week with me. Sit up until midnight talking distraught victims out of suicide a couple of times. She should go to Port Talbot with Al Rush and talk to some steelworkers and hear their tragic stories for herself.

Finally, Gupta should take a long hard look at the number of FCA-registered firms that have facilitated or committed financial crime. And then she should not just take back her ill-conceived words, but apologise for the profound disrespect and contempt she has shown the British advisory profession.

I have experienced at first hand how difficult (impossible) it is to get through to the FCA. Last year, I wrote a blog about my last visit. I wonder what more I could have done to “collaborate” with somebody – anybody – at their magnificent offices. I came pretty close to taking all my clothes off and singing “Bonkers” by Dizzee Rascal while shaving my head and reading Tolley’s Pensions Taxation. But still the FCA refused to speak to me. Even the guy in the post room made it clear I was a blooming nuisance when I handed in my whistleblowing report. (Which was, of course, ignored – and probably shredded).

The FCA needs to do a number of things to become an effective regulator – and none of them is particularly difficult or challenging:

Stop paying ridiculous, offensively-high salaries to no-hoper executives like Andrew Bailey. Bailey has shown he has neither the inclination nor the ability to run a regulatory authority. Throwing away nearly £600k a year on such a failure isn’t going to make him want to change and start doing a bit of regulating from time to time. Bailey is laughing all the way to the bank as he sits in his luxurious office and does SFA at the FCA. At the industry’s and public’s expense.

Buy some ladders. Window cleaners known how to use them – so I’m sure the nitwits at the FCA could try to copy them. The fat, low-hanging fruit only account for a tiny percentage of the offenders – all the really bad guys are at the top of the tree.

Take action against FCA-registered scammers. One appalling example is Gerard Associates which helped Stephen Ward scam 100 victims out of their pensions in 2014 and into toxic, high-risk, high-commission investments such as imaginary eucalyptus plantations. The scam, London Quantum, was masterminded by Ward and used to ruin dozens of victims – including a police officer. Gerard Associates provided the FCA-regulated advice. And remains FCA authorised to this day (even though it is in liquidation).

Buy a bunch of hearing aids. And listen to people. To IFAs and the industry in the UK and offshore; to the public; to me.

Take part in Andy Agathangelou’s monthly Scams and Scandals conference call – and learn a huge amount from experts and victims alike.

Update the FCA’s Whistleblowing section on the website. It is three years out of date. Reach out and invite the industry and the public to report suspicious activity – make it easy for people who take the time to stick their necks out. Welcome them with open arms and show them you care. And actually do something about the whistleblowing reports (don’t just shred them like they did with mine).

Demote Debbie Gupta to Junior on the Whistleblowing team – and pay her £41k a year like the other 12. Make her learn what this industry is really about. And teach her to keep her mouth shut until she begins to understand the seriousness of what she is talking about. Once she has learned some sense and memorised the immortal words of Dizzee Rascal: “Everybody says I got to get a grip, but I let sanity give me the slip”. She might then be ready to do a bit of regulating.

All the above will save the FCA nearly three quarters of a million pounds a year.

It will only cost a couple of hundred quid for a few dozen hearing aids and ladders. Andy Agathangelou and his team will give their advice for free. I know several dozen victims who will happily help out. By getting rid of the dross at the FCA, and providing just a bit of training for staff in the reception area and post room (as well as all the way up to the board room). It should be possible to turn this embarrassing, limp failure into something half decent.

I do hope the FCA will like some of my above ideas – after all “There’s nothing crazy ’bout me”.
April 8, 2019
London Capital & Finance collapses

Another high-risk investment fund goes belly up. London Capital & Finance (LCF) has gone into administration, not long after taking a whopping £236m of investments – much of which was from first-time investors. It is thought that 12,000 investors have been financially ruined.

This tragic news comes as plans are being drawn up to take recovery action for the victims of three other failed funds: Axiom with £120m worth of investors’ funds (£30m of which was with life offices FPI and OMI); LM £456m (£90m with FPI and OMI); and Premier New Earth £207m (£62m with FPI and OMI).

With so many millions having been lost between LCF, Axiom, LM and NERR – well over one billion pounds – this does beg the question as to when regulators are going to take some effective action to restrict the promotion of such funds to retail investors. Because, without the active and highly-efficient marketing machine which operates so successfully in so many jurisdictions, these no-hoper funds would never get off the ground. But, of course, they pay fat commissions to the introducers and brokers who peddle them. So, obviously, exposing naive-investor clients to high-risk funds was very profitable.

This also begs the question as to why the success of such dreadful funds continues to flourish – and why trustees and life offices continue to offer/accept them. Certainly, life offices have a great deal to answer for when it comes to doing due diligence on start-up funds with no decent provenance or evidence that they have even the tiniest chance of succeeding.

The London Capital & Finance investment bond was touted as a “Fixed-Rate ISA”, with promises of 8% returns over a fixed term of three years. BBC News reported on the collapse and stated that “Administrators said investors could get as little as 20% of their money back.” Read the full report.

What is interesting in this case, is that the promoters – a Brighton-based firm called Surge PLC – are the same marketing firm that Blackmore Global used to promote their very expensive Blackmore Global Bond. Another high-risk and expensive investment bond, that up until recently failed to be transparent about the costs involved in the investment.

It is thought that LCF paid Surge PLC some £60m to run their marketing campaign, which amounts to a commission of about 25%! Surge ran a series of marketing campaigns comparing the bonds from LCF to high-street bonds, promising consumers an 8% return. Comparison websites put LCF at the top of the retail market for bond investments and did not highlight the high risk of the bond.

These ads were pulled by the FCA, due to LCF being regulated and authorised to provide consumer financial advice ONLY. They were not regulated for the sale of bonds or ISAs. It has also been found that the comparison websites were not independent, but rather had a connection to Surge PLC and are also owned by Paul Careless – we have mentioned Paul Careless in other blogs: he is the Director of Surge PLC and seems to be one of the only parties involved in these high-risk investments to be making any profits!

As with so many high-risk unregulated investments like this, the age-old question is, “Where did the money invested into LCF´s bond go?”

We know that LCF paid Surge that huge commission fee, and this then meant returns of up to 44% would be required in order for LCF to make good on its promises. Even in a great investment, this is an unbelievably high return and totally unrealistic.

Once the investments had been completed, the money was then ‘loaned’ out to twelve other companies, and some of these companies then sub-loaned the money. There are concerns that the companies who received these ‘loans’ have a connection to the directors of London Capital & Finance. Many of the firms were very new and four of them have never filed any accounts!

Michael Andrew Thomson, known as Andy Thomson, took over as the boss of LCF in 2015 and is also director of horse riding company GT Eventing. He and Careless are under investigation over the mis-selling of this bond and their connection to the other companies invested in. However, Careless claims he has only carried out marketing practices that were requested of him and his 25% commission fee is in line with market averages.

BBC News spoke to Neil Liversidge – an IFA who came across the scheme back in 2015 and consequently wrote to the FCA to warn them about the connections and possible mis-selling of the investment.

Mr Liversidge said: “The way it was promoted, a great many people could have fallen for this. A client brought it to us, but when we looked into it there was a lot of interconnection between the people they were lending to and the management of LCF themselves. We warned our clients off and the same day we wrote to the regulator raising our concerns about the promotion.”

Mr Liversidge, of course, was proved to be absolutely right. But, unfortunately, it took the FCA a further three years to shut the bond down, which ended up with 11,605 victims investing £236m in LCF’s bond. Investigations show that recovery is likely to be as low as 20% of the initial investments made.

Whilst the investigation goes forward, there have been no promises of compensation from the Financial Services Compensation Scheme (FSCS).

BBC News reported:

“The FCA findings included that LCF’s bonds did not qualify to be held in an ISA account and therefore investors were being misled by being told the interest they earned would be tax free.

The FCA said it was “unlikely” investors of London City & Finance would be protected under the Financial Services Compensation Scheme (FSCS) but it was “for the FSCS to determine”.”

Yet again we see unregulated investments being mis-marketed, to innocent retail investors – and the high risks being masked by promises of high returns. With high commissions – also masked – lining the pockets of the introducers, these toxic investments only make those who receive the commissions any profit. The victims, again and again, lose their hard-earned savings and there is little that they can do to recover them without expensive litigation.

For more on this story listen to BBC Moneybox by clicking here.

March 21, 2019
Hidden charges that destroy your pension funds
When we buy certain products, they have a warning on them. Cigarette packets, for instance, state that smoking is bad for your health. The wrappers show hideous images of what might happen to you if you use tobacco.

However, when it comes to investments, the ‘advisers’ selling dangerous investments are able to disguise the risks and costs. Offshore, there seems to be no effective code of conduct, or regulation as to what they must disclose and what they can conceal.

Last week the FCA slammed asset managers and retail investment firms over hidden fund charges.

When selling their investments, these firms are really good at omitting details of the full charges that will apply – not only initially – but on an ongoing annual basis as well. These hidden charges put your investment in danger.

The FCA has stated:

“In one case it found an asset manager had omitted a 4 per cent a year transaction cost from the UCITS Key Investor Information Document (KIID).”

In so many pension scams, we hear that the victims were sold a ‘free pension review’; they were not told about the transfer costs; that they were not told about annual fees either. In many cases, the transfer costs and fees work out to be considerably higher than if they had paid a proper fee for the review in the first place. These hidden costs put a huge strain on the fund and sometimes victims can lose up to 25% of their fund to hidden charges.

What worries us most is the lack of regulatory concern or control in respect of expensive and risky investment products. You can’t buy cigarettes without a stern health warning. The same goes for alcohol: bottles and cans clearly state how many units are in the container, and how many units men and women can safely drink per day. They also state that alcohol should not be consumed by pregnant women.

Alcohol companies manage to fit all this info about the dangers of drinking on a tiny label. And this poses the essential question as to why financial advisory firms are able to sell risky investments again and again – omitting clear warnings about the dangerous aspects of them.

Also highlighted in an article by Corporate Adviser:

“The FCA reserved its fiercest criticism for asset managers, saying it found instances where asset manager fact sheets or websites did not mention costs. When they did, they often gave the ongoing charge figure, which omitted transaction costs, performance fees and borrowing charges which are shown in the Key Information Document (KID). In one example, total charges in the PRIIPs KID equated to around 3 per cent per annum – but the only costs given in the fact sheet was the 1.2 per cent annual management charge (AMC).”

This is not news to us at Pension Life. It is something we have been writing about for sometime – and we have a great deal of evidence that hidden, excessive charges are a terrible blight on the face of financial services internationally. It is indeed excellent news that the FCA has finally highlighted the dangers of such hidden charges, but now we need to make sure these dangers are highlighted to the public. CLEARLY AND VISIBLY.

A prime example of advisers and hidden charges is the dastardly duo: Phillip Nunn and Patrick McCreesh. This pair of scammers received £ millions promoting the Capita Oak, Thurlstone Loans, Henley Retirement Benefits Scheme and Berkeley Burke SIPPS scams – leaving 1,200 victims facing poverty in retirement. With that disaster comfortably behind them, they then launched the £40 million Blackmore Global scam and now their network of scammers are promoting the Blackmore Bond which pays a 20% introduction commission to the introducers.

You can’t buy a gun without going to a registered shop and having a licence. (Although, I guess on the black market you can). If you buy a gun on the black market, it is going to be ‘hot’. The person you buy it from is going to be dodgy and it certainly won’t come with the correct paperwork.

So if you are a normal, law-abiding citizen (and cautious investor), you would want a legitimate investment which fits your risk profile – and full paperwork disclosing ALL the charges. Make sure you pick the right adviser who will give you evidence of all these essential details.

Dodgy advisers are still getting away with selling ‘hot’ investments: funds that are clearly toxic and dangerous to your pension fund. These advisers manage to do this very successfully by wrapping them in a fluffy cover and selling them with an array of unrealistic promises of high returns and alleged capital protection to reel the victims in.

When considering a pension transfer, we urge you to familiarise yourself with our ten standards. Your adviser ought to adhere to these standards anyway – and if he doesn’t then walk away. Number eight covers what we have talked about in this blog: CHARGES.

Your adviser MUST GIVE YOU: Full disclosure of fees, charges and commissions on all products and services in writing, before you commit. So before you sign anything regarding a pension transfer and subsequent investment, please ensure you know exactly what charges will be applied to your fund: before, during AND after. It is also imperative to know if there is a lock-in period and early exit penalty and to make sure you are comfortable with that.

Excessive and concealed fees can ruin a once healthy and happy pension fund – just like smoking can ruin your lungs and drinking can ruin your liver. Hidden charges can put your funds in danger and ruin your retirement savings beyond repair.

Here is a list of our ten standards.

STANDARDS ACCREDITATION CHECKLIST FOR FINANCIAL ADVISERS:
1. Proof of regulation for all services provided by the firm and individual advisers in the jurisdiction(s) where advice is given and the clients are based.
2. Verifiable evidence of appropriate, registered qualifications and CPD for all advisers. (Where there are insufficient qualifications, there must be clear evidence of plans and preparation to achieve required goals within a reasonable, stated time frame).
3. Professional Indemnity Insurance
4. Details of how fact finds are carried out, how clients’ risk profiles are determined and adhered to.
5. Details of the firm’s compliance procedures – assuring clients of the highest possible standards and assurance that risk profiles are always accurately and faithfully respected.
6. Clear and consistent explanation and justification of the use of insurance bonds for investments.
7. Unambiguous policy on structured notes, UCIS funds, in-house funds, non-standard assets and any ongoing commission-paying investments. Report of all investment recommendations for all clients and evidence as to how these match individual risk profiles.
8. Disclosure of fees, charges and commissions on all products and services at time of sale, in writing, before clients commit.
9. Account of how clients are updated on fund/portfolio performance.
10. Public evidence of complaints made, rejected or upheld and redress paid.
For more in depth explanation check out our other blog on the ten standards:

Cartoon blog – Don’t be the next pension scam victim
March 5, 2019
Berkeley Burke SLIP with their SIPPS
Berkeley Burke SIPPS – A SLIP OF THE TICK WITH THE SIPPS

We talk about the so-called “independent advisers” who sell scams to unwitting victims; we talk about the firms, introducers, cold-callers, lead generators, closers, couriers and transfer administrators. Many of the Pension Life blogs mention good old Stephen Ward – one of the leading scammers since 2010 – and we often try to make sure XXXX XXXX doesn’t feel left out either.

However, there is another link in the pension scam chain that is often forgotten about – the trustees. A pension scam always starts with two sets of trustees: the ceding trustee which hands over the funds to the scammers and the receiving trustee which allows the scammers to do their work successfully.

Ceding trustees have been ticking boxes and handing out thousands of victims’ life savings for years – in complete defiance of warnings by HMRC, the Pensions Regulator and the Scorpion campaign. It really is too much trouble for ceding trustees to look for the blindingly obvious signs of a scam – and the people these firms employ are obviously not that bright. Rather than actually doing anything which involves the magic word “trust” (or the four-letter word “work”), it is much easier – and cheaper – just to hand the millions over to the scammers.

I dread to think how much the lazy, negligent ceding trustees spend on pencils every year for ticking boxes, and blindfolds for making sure the transfer admin staff don’t ever see the scam warnings. The worst performers are always the same old same old names:

Aegon, Aon, Aviva, DHL, Friends Provident, Legal & General, Norwich Union, Pearl Assurance, Prudential, Royal London, Royal Mail, Scottish Widows, Standard Life and Zurich.

Since the Ark and Salmon Enterprises pension scams back in 2010, these lazy box-ticking trustees must have got through thousands of pencils and blindfolds. In fact, one ceding provider – Nationwide – deliberately handed over a pension even after they had received confirmation that the receiving trustees had been arrested for fraud and money laundering (and were later jailed for eight years).

However, this blog is written to address the equally damning and disgusting behaviour of negligent trustees who are at the receiving end of a transfer by the scammers – and allow victims’ pension funds to be invested in toxic, high-risk crap which only serves to pay eye-watering commissions to the scammers. We must remember that if such trustees are negligent, the scammers are able to succeed – and financial crime is inevitably facilitated.

One such negligent trustee is Berkeley Burke SIPPS Administration Ltd. At the end of October 2018, Berkeley Burke appeared in the High Court at the behest of the Financial Ombudsman. The matter involved a complaint by one of their victims: Wayne Charlton – a gardener. I have never met Mr. Charlton, so know little or nothing about him. But I have met a few gardeners in my time – and I wouldn’t say that any of them came close to being sophisticated investors. So I think it is highly unlikely that Mr. Charlton knew anything about investing or had any experience of the highly complex world of investment strategies.

In 2011, Mr. Charlton applied to transfer his existing personal pension to Berkeley Burke and to use the money for investment in an investment scheme run by scammers. Of course, he didn’t know the scheme was a scam at the time – although it was unquestionably a UCIS fund which should not have been promoted to a retail pension saver at all (and Berkeley Burke ought to have known this). Over 600 other victims were also scammed into investing around £ 12,250,000 in SIPPs operated by Berkeley Burke. However, it transpired that the investment scheme was a scam. And all the money was lost – all because Berkeley Burke was too lazy, selfish, stupid and careless to carry out any basic due diligence. Not just in respect of Mr. Charlton, but in respect of all the other 600+ victims.

Full details of the case can be found here.

There were a few basic warning signs that Berkeley Burke deliberately ignored:
- The introducer was Mr. Stones of Big Pebble Limited. You would have thought that just the name: Big Pebble might have triggered at least a raised eyebrow. The firm was newly incorporated and had never traded.
- The SIPPS was invested in Sustainable ArgoEnergy plc (SA) – a “green oil” scheme in Cambodia (remember the Jatropha trees? – Gary West, James Whale and Stuart Stone, were convicted of fraud and bribery offences and sentenced to a total of 28 years imprisonment for this scam back in January 2018?). Just hearing the words “Cambodia” and acknowledging the basic fact that this was a high-risk, illiquid, unregulated fund ought to have been enough for Berkeley Burke to use some basic common sense and refuse the investment.
The core question that was considered in the High Court by Justice Jacobs, was whether Berkeley Burke acted fairly and reasonably by accepting Mr. Charlton’s SIPPS investment into non-existent Cambodian land and Jatropha trees.

The judge decided it was blooming obvious that this was an unsuitable investment for a pension fund. Whilst Berkeley Burke could not give financial advice, they did, however, have a duty of care to their client. Justice Jacobs concluded that Berkeley Burke “did not act fairly and reasonably” with regards to Mr. Charlton’s investment. The point was made that they should have questioned the investment and made further investigations into it, and that had they done so they would have deemed that the investment was totally unsuitable.

But of course, it was much easier to go “tick” and let Mr. Charlton and more than 600 other victims lose over £12 million worth of life savings.

So my motto for pension trustees for 2019 is: Don’t be a Berk or a Burke – put those ticks away!
December 19, 2018