Tag: Financial Conduct Authority

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
£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
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
UAE REGULATOR DOES A BIT OF REGULATING

International Investment has written a jolly good article about the recent action taken by the UAE Insurance Authority – headed up by His Excellency Ibrahim Al Zaabi. I quote from Gary Robinson’s article:

“In a statement on the Arabic version on its website the IA has issued a circular confirming the suspension (of Holborn Assets) for a period of three months or until it is satisfied that the company has improved its performance.

According to Dubai-based sources that International Investment has been speaking to, the IA has written to regulated insurance companies notifying them of their action.”

I have no doubt that Holborn Assets will rise to the challenge magnificently and in a dignified manner – and will recognise the fact that it is time for the routine misuse of all insurance bonds in offshore financial services to come to an end. I also doubt Holborn Assets will sell any more RL360 products.

The Continental Wealth Management debacle must surely serve as a perfect example of how and why insurance bonds should not be used at all – and indeed how and why structured notes should be banned altogether. And yet, despite the Malta FSC’s lukewarm change in regulations to ban advisers without an investment license and limit structured notes to 30% of a portfolio, useless/pointless insurance bonds and toxic structured notes are very much the norm across the offshore financial services landscape.

The Eagle-eyed Sheikh Al Zaabi has obviously spotted something that regulators in all jurisdictions which affect British expats have turned a deliberate blind eye to. Insurance products can, have been, and are routinely abused. And the abusers often cause heavy losses to thousands of unfortunate victims. His Eminence also obviously recognises that turning a blind eye damages not only the jurisdiction in question, but also the reputation of financial services in general.

Quite frankly, it is shameful and embarrassing how many regulators behave (or rather fail to behave).

The FCA takes no action even when their nose is rubbed into obvious fraud – and let the British Steel disaster happen under their very noses. In fact it took public-spirited independent financial services professionals such as Al Rush, Darren Cooke and Henry Tapper to take it on themselves to try to rescue the steelworkers while the scammers hovered like vultures. I would like to be proud to be British, but the FCA is a national disgrace and an embarrassment to all British citizens. I wouldn’t mind if the FCA was just lazy, but it simply doesn’t care about the interests of those who get conned and scammed.

The Guernsey FSC allowed many frauds, including trustees Concept Trustees to sell UCIS fund EEA Life Settlements even after the FSA “toxic” warning. And, of course, EEA Life Settlements itself. Then the stable door shut with a resounding clang as an ombudsman was brought in, but told not to hear any complaints prior to July 2013. This effectively excluded all the worst scams which were being carried out in Guernsey by the likes of Concept Trustees – which took business from Stephen Ward’s Premier Pension Solutions which neither had regulation nor professional indemnity insurance.

The Gibraltar FSC appears to actively encourage outright scammers such STM Fidecs – and when financial crime is brought to their attention they go fishing for a few small, wet fish. Talking of fish, I think it is very fishy that Paul Garner, now of the Gibraltar FSC, used to work for scammer XXXX XXXX at Global Partners Ltd – the firm that “advised” hundreds of UK-resident victims to transfer their pensions to an STM Fidecs QROPS. Then STM Fidecs allowed XXXX XXXX to invest 100% of 100% of these victims’ funds into his own UCIS fund: Trafalgar Multi Asset (now in liquidation). I genuinely don’t know at which point Paul Garner moved over from Global Partners Limited to the Gibraltar FSC……but I have a feeling his leaving do will be an exceptionally (and uncharacteristically) lavish affair – and I am very much hoping to be invited. I hear there will be something fishy on the menu and Garner’s good fortune will be toasted with something bubbly. I have no doubt the cleaners will effectively brush all the crumbs under the carpet after the party.

The Central Bank of Ireland will be put to the test when scammers SEB (formerly Irish Life) are put in the spotlight. CBI has known for years that SEB – led by Peder Nateus and Conor McCarthy – has been facilitating financial crime. SEB took £ millions’ worth of business from unlicensed scammers Continental Wealth Management and allowed the whole lot to be invested in toxic structured notes: “for professional investors only”. These notes – including the fraudulent Leonteq ones (over which OMI is now suing Leonteq) clearly warned of the “danger of loss of part or all of your capital”. And yet SEB sat there and watched while hundreds of CWM‘s clients’ victims’ life savings were destroyed – and did nothing. This has left many victims in despair and poverty – with some contemplating suicide.

Against this backdrop of extreme ineptitude and collusion amongst this collection of chocolate teapots, motorbike ashtrays and fishnet willy warmers, let us all hope that the UAE Insurance Authority shows all these no-hopers what effective regulation should look, smell and feel like.

June 28, 2018
Pension Cold Calling Scammers

Just goes to show that there is no let up in pension scamming

The Tonight programme “How Safe is My Pension” aired on Thursday 4th May. An undercover “sting” exposed the operation of a pension cold calling scam.

IFA Darren Cooke of Red Circle Financial Planning featured in the programme and spoke passionately about the dangers of cold calling. He ran a successful petition to campaign for a ban on cold calling. This attracted thousands of signatures in a short space of time and earned him widespread praise and respect from the financial services industry. Hopefully, after the election, whatever government we end up with will get back to the serious business of cleaning up the pension scamming industry and putting the scammers where they belong – behind bars.

WHAT MORE COULD THE PROGRAMME HAVE TOLD VIEWERS ABOUT PENSION SCAMS?

However, while one victim’s tragic circumstances were highlighted, I think the programme could have done more to feature the extent of pension scams; how many there have been during the past seven years; how much has been lost (many £ billions); how many people’s lives have been ruined; how many scammers there are in the UK and offshore and how many £ millions they have earned out of ruining victims’ lives.

The programme also missed two important regulation failings – cold calls are facilitated by the illegal sale of personal data – almost no victims understand this. Also, the promotion of unregulated investments to ordinary savers is an offence. A country that can’t enforce its own laws is a failing state. And enforcement takes far too long: it took the Pensions Regulator four years to take action to disqualify the shysters behind the 5G Futures pension scam – and there is still no news about them being prosecuted for scamming hundreds of victims out of £16 million worth of pensions which were invested in a plantation in Fiji. This despite the Pensions Regulator’s Lesley Titcomb clearly stating that scammers are criminals.

IFA Darren Cooke from Red Circle Financial Planning

The whole purpose of Darren Cooke’s cold calling ban petition was to draw attention to the enormity of the pension scamming industry and get the government to finally take some action. The regulators and the police have failed dismally to tackle the problem and address the point that the scammers are left free to operate scams over and over again. The public need to know just how prolific the scams and scammers are.

But this is the most tragic issue of all. Serial scammers train and coach the next generation. They teach the new boys the tricks of this filthy trade and then more scams spring up like rabbits on viagra. The regulators and the police stand by and let the scammers just get on with their next lucrative operation. And this is what must change – once and for all. The victims need protection for the damage already done to them. And new victims have to be warned of the dangers posed by the pension cold calling scammers as well as the introducers, administrators, promoters, distributors and trustees of various scams operating in the UK and offshore.

Remarkably similar logos with both Marazion and Perpetual

May 5, 2017
ANATOMY OF A PENSION SCAM – eBOOK
Every time I think this book about pension scams is done and I can put it away, a new scam or scammer pops up and I have to rethink it. And every time I add in a new sentence or paragraph, the formatting and pagination need to be adjusted. But, however imperfect and unfinished it may be, it is available on Amazon:

It has been much harder to write than I ever thought it would be. But nowhere near as hard as it is for the victims who have to live with the consequences of losing their pensions and investments – and gaining tax liabilities.

The purpose of this book is to warn the public against current scams and scammers (the same ones who have been doing it since 2010) and encourage the police and regulators to criminalise all forms of scams. The Pensions Regulator’s Lesley Titcombe has clearly stated that scammers are “criminals” and it is hoped they will all be prosecuted. The victims and the ethical members of the financial services industry want to see a zero-tolerance policy and a military-style campaign to stamp out this horrendous crime wave.

Evidence suggests that in the past seven years, there have been many £ billions lost to pension and investment scams – there are no precise “official” figures. But the dreadful fact is that the scammers who were targeting victims back in 2010, continued doing it in 2011; and 2012; and 2013; and 2014; and 2015, and 2016. And they are still doing it today. Happily and profitably. And nobody has stopped them or brought them to account for the horrific financial damage and distress they have caused.

It is hard to decide which is worse: the vicious, greedy, cold-hearted scammers or three sets of inept government or the feeble authorities who let them get away with it. Repeatedly. But it has to stop. A military-style, zero tolerance campaign has to be waged against all the guilty parties until every last one of them is brought to justice.

The tragic thing about these scams and the misery and financial ruin caused to so many thousands of victims is that this disaster was preventable. HMRC were warned by the industry about the potential for scams if the role of compulsory professional trustee was removed pre 2006. In a letter of March 2004 a specialist pension solicitor warned:

“It is essential that schemes offering self-administration and wide investment choice should have in place an independent person who has sufficient control of scheme assets to prevent abuse and sufficient knowledge and experience to know abuse when he sees it.

That does not necessarily mean that the system of pensioneer trustees should be retained in its current form but, if it is abolished without an effective replacement, we envisage that within the next 5 years the degree of abuse of such schemes by both incompetent and dishonest individuals will:
- further stain the reputation of pensions generally; and
- severely embarrass the government responsible for letting it happen.
Reputable professionals in the industry and the Government share a common aim of building a system of tax rules that is simple but is robust enough to last for a working lifetime without major overhaul. Such a system needs to contain adequate protections against abuse.”

The warning was ignored. And precisely what was predicted would happen, happened. And it will go on happening until and unless government, HMRC, regulators and police take responsibility for their failings and put in place robust measures to clean up the mess of the past/present and prevent future disasters.

This clear warning was brought to my attention by Martin Tilley who is director of technical services at Dentons Pension Management. Martin has written some excellent blogs and articles on the subject of pension scams and my favourite has to be this one:

http://www.retirement-planner.co.uk/9344/cleaning-up-pension-scams-with-soap-operas

I know the government is jolly busy at the moment with Brexit. But earlier this year there was a government consultation on pension scams – and still no word about what the battle plan is. In fact, neither Damian Green (Secretary of the DWP) nor Richard Harrington (Pensions Minister) will engage at the moment as they claim there is no point until after the consultation.

But they didn’t say how long after: three months? three years? With every day that they dither about, more victims will lose their life savings; more damage will be done to the reputation of the industry; more expensive will it become for the State to support those who have no retirement income; louder will be the ticking of the pension scam time bomb.

Richard Harrington recently stated that Britain can’t afford to implement transitional arrangements for 1950s-born women who weren’t notified their State pension age was going to be increased from 60 to 67. He reckons this would cost the country around £30 billion. With scams reportedly costing the British public £11 billion a year, the cost of supporting these thousands of victims throughout their retirement will be staggering. Plus the cost to the NHS (because of the amount of mental and physical health damaged caused by the stress of being scammed) will add to this enormous cost.

If you have read this blog from start to finish, it will have taken you seven minutes. During that time at least one person will have been scammed out of their life savings. If you read the Anatomy of a Pension Scam ebook from beginning to end, it could take you up to five hours if you read slowly and carefully. Think how many people could be scammed in that time. Avoidably.
March 30, 2017