Tag: London Capital & Finance

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
Victims of Investment Fraud need Justice

As the decade comes to a close, it is clearer than ever that victims of investment fraud need justice. The dirtiest stain on society is that of pension and investment fraud. Scammers have made fortunes out of pension and investment scams in the UK and across the globe – in all leading expat jurisdictions. With little sign of this international crime abating, scammers continue making fortunes out of relieving people of their life savings.

The FCA managed to get out of bed (briefly) to bring to justice the scammer behind the Dynamic £600k investment scam. But completely overlooked over £1 billion worth of other investment scams.

Meanwhile, the very authorities which should be preventing financial crime – regulators; law enforcement agencies; HMRC; Insolvency Service; government; courts – stand around clueless and helpless. Their inaction is embarrassing and disgusting – especially in the wake of the appalling announcement that Andrew Bailey has been appointed governor of the Bank of England.

The saddest thing – for our society in general and existing victims in particular – is that it can be done. But we must ask ourselves why the criminals are brought to justice so seldom. On 20th December 2019, FT Adviser published an article reporting how one fraudster was brought to justice and ordered to pay redress to his victims.

Manraj Singh Virdee of Dynamic UK Trades Ltd conned 24 victims out of more than £600,000. His method was to promise returns of 100% for investing in his forex trading and spread betting “expertise”. The FCA brought a case against this criminal who was convicted by Southwark Crown Court. The sentence was only a suspended prison sentence for running an unauthorised investment scheme. However, the court made a confiscation order against Singh Virdee of £171,913 – to be used to compensate the victims. If he doesn’t pay, he will be sentenced to two years in prison.

It is indeed good to know that during a prolonged period of being asleep at the wheel, the FCA can do a wee bit of regulating. But why does Manraj Singh Virdee deserve to be sentenced for defrauding 24 victims out of £600,000 when so many other scammers have got away with defrauding many thousands of victims out of many £ millions?

Victims of Investment Fraud need Justice: In 2020, pressure must be brought to bear on the inattentive, lazy and negligent authorities who have done nothing. It is simply not acceptable to turn a blind eye to so much financial crime. This is especially true when cases like the Singh Virdee one clearly demonstrate that if only they could be bothered, they could actually clean up the scamming industry. But, first, they have to want to do it. And as things stand, there is no evidence that they really do want to.

While this would-be forex trader and spread better faces a couple of years behind bars, the rest of the scammers are still out there scamming away merrily and profitably. Shouldn’t 2020 be the year to make pension and investment scamming illegal? Because as things stand, the scammers know they can get away with it easily.

Singh Virdee’s scam was pretty obvious, and I do not mean to trivialise the £600k he scammed out of his victims. But this is dwarfed by Stephen Ward‘s £3 million London Quantum pension scam; David Vilka‘s £7 million GFS QROPS scam; Stephen Ward and XXXX XXXX’s £10 million Capita Oak pension scam; XXXX XXXX’s £21 million Trafalgar Multi Asset QROPS investment scam; Phillip Nunn and Patrick McCreesh‘s £25 million Blackmore Bond investment scam; Stephen Ward’s £27 million Ark pension scam; Phillip Nunn and Patrick McCreesh‘s £41 million Blackmore Global investment scam; Old Mutual International and Leonteq‘s £94 million investment/life bond scam; London Capital & Finance‘s £230 million mini bond scam; Dolphin Trust‘s £600 million derelict property loan scam.

So, come on FCA: £600,000 down – only £1,158,000,000 to go!

December 23, 2019
A Tale of Two Investments

“Best of times. Worst of times. Age of wisdom and foolishness. Epoch of belief and incredulity. Season of light and darkness. Spring of hope; winter of despair.”

You would be forgiven for thinking the above was written about the world of pensions and investments (by someone far more eloquent than me). However, it was written by the mighty Charles Dickens on the subject of the French Revolution in the late 1700s.

There are strong parallels between both events: in the French Revolution, many thousands of lives were destroyed and society broken down in an era when turmoil and terror reigned. Since 2010 in the UK and offshore, a similar breakdown in the stability of society has taken place – with even more lives being destroyed.

Investment abuse.

Investment abuse is one of the biggest causes of darkness and despair in modern times. Thousands of victims are seeing their life savings put at risk every year – the causes range from outright fraud and mis-selling to negligence and greed (on the part of advisers, introducers and promoters). But what makes this abuse even more sinister, is that the FCA does nothing to help. And, even worse, sometimes it does something to hinder.

Regulators in the UK and offshore do nothing to help. But sometimes they do something to hinder. Unnecessarily.

Let’s compare two investments which have been in the spotlight in 2019: MANAGED FUNDS and AIRPORT CAR PARKS.

Citywire’s Bottom Performers Chart for 2019

In the case of the former, the FCA’s track record is appalling – it was slow and did nothing in the case of two funds: Neil Woodford’s Equity Income Fund and Mark Barnett’s Invesco funds. As a result, more than 300,000 investors face suspension of the funds – so they can’t get their money out, and will suffer inevitable heavy losses when they can.

In the case of the latter, the FCA has taken two lots of contradictory actions – it agreed a restructuring of Toby Whittaker’s Park First in 2017, then in 2019 it reneged on the agreement and forced the company into administration. Investors – somewhat understandably – believe that Whittaker has failed to make payments he agreed to make back in 2017. However, in reality it is the FCA which has prevented him from doing so as a result of disruptive and contradictory regulatory action.

Both sets of investments had their own strengths and weaknesses. There’s no such thing as the perfect investment and all investments carry a degree of risk. The problem lay with the promotion of the investments.

In the case of the Woodford Equity Income fund, there was Hargreaves Lansdown promoting it heavily – right up until immediately before the fund was suspended. One Trust Pilot reviewer said: “H and L are always pushing funds (presumably because you get commissions etc) but you were made to look devious over WOODFORD, so I think impartiality has to be addressed with regards to FUNDS”. Another reports liquidity issues: “Fabulous while you are investing with them. But try to get your money out – that’s a different matter. Still waiting for them to transfer my funds after 3 months. The delay is totally unacceptable.” A third reviewer is even more disgusted: “Another Woodford/Lansdown victim left nursing losses due to taking on board their advice. This wasnt just a case of poor performance, this was a former reputable company using its name to push an income fund heavily invested in illiquid stocks up to the point of it folding, a move that has cost investors millions. An untrustworthy company with lots of questions to answer.”

In the case of Park First, there were large numbers of advisers all over the World who advised their clients to put too much of their money into the investment. A more prudent approach would have been to spread the money over a variety of different assets (and avoid the “eggs in one basket” syndrome). It is also clear that these same advisers have often encouraged their clients to blame Park First’s Toby Whittaker for the current uncertainty in the run up to the creditors’ vote for the administration scheduled for 25th November 2019. The reality is that the advisers and the FCA have a lot of blame to shoulder. There’s nothing wrong with the car parks themselves: the planes are still flying (with the exception of Thomas Cook); the passengers are still driving their cars to the airport; the car parks are still doing a roaring trade. And this is set to continue unabated for years to come.

Investors in both the managed investment funds (Woodford and Invesco) are rightly peeved – their investments have not performed well; and they didn’t understand the degrees of liquidity, diversity and risk. It is now a matter of public record that both Woodford and Barnett suffered from the same syndrome: they were legends in their own lunchboxes. They took unacceptable risks – gambling with investors’ life savings; throwing caution and prudence to the winds.

Having successfully strayed into high-risk strategies in the past, they thought they would always be so lucky. But their luck ran out. Now they are having to unload the worst of the illiquid, risky stuff (crap) and are advertising: “Please will somebody (anybody) buy our unlisted shares – we desperately need the cash. We thought they were under valued. Seems we were wrong. Any takers? We’re in a bit of a hurry!”

Not exactly a position of strength from which to bargain. Neither of them will have a future in anything to do with investments other than perhaps serving as a reminder that: “past performance may not be indicative of future results”!

By comparison, Toby Whittaker’s Park First looks a much better bet. The only things that could possibly go wrong are that Glasgow, Gatwick and Luton airports get shut down, or that Elon Musk will invent a Tesla that will drive itself home alone from the airport.

The good thing about Park First is that it is a tangible, known, concrete (tarmac) asset. The car parks exist and are in no way speculative – there’s a proven and growing market for the car parks. There are no bad debts (nobody ever says “sorry I can’t pay – can I have 90 days please?”). Personally, I would never use a Park First airport car park – but only because I don’t have a driving license or a car. And even if I did, I live in Spain.

So, from investment funds and bonds, to airport car parks, the real problem seems to be who promotes them and what the regulator does (or doesn’t do) when it looks like things aren’t going to plan. The FCA first investigated the Woodford fund’s performance three years ago – but took no action (despite clear evidence that Woodford was investing heavily in “hard-to-value, unlisted, illiquid assets”). The most that Andrew Bailey could bring himself to say at the time was that he felt “uncomfortable”.

So no evidence of anything more serious than wearing his Y-fronts back to front.

The Woodford fund is now being liquidated by Link Fund Solutions – and the investors have no say in the future of their investments. It will be a “fire sale” – with the liquidator getting first dibs on the cash. The investors – as is always the case – will be at the back of the queue.

Park First investors are in a better position, as the administrator is Finbarr O’Connell of Smith and Williamson. A licensed insolvency practitioner and chartered accountant, Finbarr has been involved in restructuring and insolvency assignments for the last 33 years and is a past president of the Insolvency Practitioners’ Association. He engaged enthusiastically with investors at the creditors’ meeting in London on 1st October, and will be in the chair again on 25th November. He is offering investors a wide range of options in order to either get their money back or see their investment in safe hands and producing healthy returns.

Finbarr is also joint administrator of London Capital & Finance which has seen 11,600 investors dismayed at the collapsed of this ultra-high-risk “mini bond”. In March 2019, there were four arrests made by the Serious Fraud Office in connection with this case – and the man behind Surge Group (Paul Careless) was also arrested for promoting it. London Capital & Finance shows the extreme end of investing: outright fraud. Neither the Woodford fund nor Park First are – or ever were – frauds. However, they were both undoubtedly widely mis-sold.

While the Woodford investors have no voice in the liquidation of the Woodford fund, at least Park First investors have a vote – and the chance to avoid liquidation.

November 10, 2019
FCA head Andrew Bailey must go (over London Capital & Finance bond scandal)

No-hoper Andrew Bailey – £600k a year head of the dismal FCA – must now go. He is the failed head of a failed regulator.

A High Court Judge has called for an investigation into the FCA’s dismal failings over the lack of action prior to the collapse of the London Capital & Finance bond. More than a dozen MPs have also called for Andrew Bailey – £600k a year head of the FCA – to go.

High court judge leads inquiry into London Capital & Finance scandal

Dame Elizabeth Gloster, a leading high court judge with a specialist background in corporate failures, finance and fraud, will be heading up two investigations: the failure of the London Capital & Finance investment bond; the even more scandalous failure of the FCA to prevent 11,000 investors from losing £236,000,000 in the failed bond.

A judge with the might and the inclination to bring both the LC&F bond scam and the failed FCA to justice?

FCA-registered LC&F (London Capital & Finance) promised returns of between 6.5% and 8% to more than 11,000 victims – who may or may not ever see a penny. The FCA had been warned about the likely collapse of LC&F three years before it finally went down the plug hole – taking £236 million of investors’ cash with it. The FCA has made no apology.

Even the government is finally sitting up and taking notice of the UK’s embarrassingly hopeless regulator and the problem of high-risk investments (promoted to low-risk investors). The economic secretary to the Treasury – John Glen – has urged swinging into action for a change.

But can a government minister and a high-court judge bring the regulator to justice? Or will they need the Fire Brigade and the Royal Marines to lend a helping hand?

Pension and investment scam victims have, for years, begged the government, regulators and police to take some action. But far from recognising the problem and doing something about it, they have simply turned their backs on the victims – and let the scammers carry on scamming. Even serving police officers can’t get the police to take action against the scammers.

Dame Elizabeth Gloster must properly use her experience and enthusiasm to investigate this disgraceful situation thoroughly. She really ought to “ensure this type of thing doesn’t happen again” – then perhaps all the other scams that the FCA has facilitated over the years can also be investigated?

Over a dozen MPs have demanded that hopelessly expensive (and hopeless) Andrew Bailey – head of the FCA – should be sacked over his failure to handle the LC&F failure properly (or at all). But Bailey isn’t that bothered, as he is looking forward to his next cozy gig as governor of the Bank of England.

If Andrew Bailey is let off with nothing more than a slap on the wrist with a wet fish, and sent packing with a fat cheque and huge pension, there will be hell to pay. The thought of such a limp, lazy lizzard running the Bank of England is a bit like the thought of Boris Johnson being Prime Minister (let us not tempt fate!).

I have just been reliably informed that there weren’t 11,000 investors. There were 19,000.

May 24, 2019
Fighting pension scams: Regulation
Fighting pension scams: Regulation

If it was easy to stop pension scams, everyone would be doing it. Clearing up the mess left behind a pension scam is a huge challenge. This is why clear international standards need to be recognised and adopted. The scammers are like flocks of vultures. If people only used regulated firms, they could avoid a lot of scams.

Here is our list of standards
1. Firm must be fully regulated – with licenses for insurance and investment advice
2. Advisers must be qualified to the right standard
3. Firm must have Professional Indemnity Insurance
4. Clients must have comprehensive fact finds and risk profiles
5. Firm must operate adequate compliance procedures
6. Advisers must not abuse insurance bonds
7. Clients must understand the investment policy
8. All fees, charges and commissions must be disclosed
9. Investors must know how their investments are performing
10. Firm must keep a log of all customer complaints
Why is regulation so important?:
- If a firm sells insurance, it must have an insurance license.
- If a firm gives investment advice, it must have an investment license.
Many advisers will claim that if they only have an insurance license, they can advise on investments if an insurance bond is used. This practice must be outlawed, because this is how so many scams happen.

Most countries have an insurance and an investment regulator. They provide licenses to firms. Some regulators are better than others. Most regulators do some research and only give licenses to decent firms.

History tells us that most pension scams start with unlicensed firms. Here are some examples:

LCF Bond, Blackmore Bond, Blackmore Global Fund, LM, Axiom and Premier New Earth – all high risk failures. The investors have lost some or all of their money in these bonds and funds. They were mostly sold by advisers without an investment license. Investors lost well over £1 billion. Advisers (introducers) earned £millions in commissions.

Continental Wealth Management invested 1,000 clients’ funds in high-risk structured notes. Investors started with £100 million. Most have lost at least half. Some have lost everything. Continental Wealth Management had no license from any regulator in any country.

Serial scammers such as Peter Moat, Stephen Ward, Phillip Nunn, and XXXX XXXX all ran unlicensed firms. Peter Moat operated the Fast Pensions scam which cost victims over £21 million. Stephen Ward operated the Ark, Evergreen, Capita Oak, Westminster and London Quantum pension scams which cost victims over £50 million. XXXX XXXX operated the Trafalgar pension scam which cost victims over £21 million.

Phillip Nunn operates the Blackmore Global Fund which has cost victims over £40 million. Serial scammer David Vilka has been promoting this fund. Over 1,000 people may have lost their pensions.

Firms that give unlicensed advice are breaking the law. Unlicensed advisers often use insurance bonds. These bonds pay high commissions. The funds these advisers use also pay high commissions. The advisers get rich. The clients get fleeced. The funds get destroyed. Insurance bonds such as OMI, FPI, SEB and Generali are full of worthless unregulated funds, bonds and structured notes.

Unlicensed firms hide charges from their clients. Most victims say they would never have invested had they known how expensive it was going to be.

Hidden charges can destroy a fund – even without investment losses. Licensed advisers normally disclose all fees and commissions up front. This way, the client knows exactly how much the advice is going to cost.

People can avoid being victims of pension scammers. Using properly regulated firms is one way. An advisory firm should have both an insurance license and an investment license. Don’t fall for the line: “we don’t need an investment license if we use an insurance bond”. Bond providers such as OMI, FPI, SEB and Generali still offer high-risk investments. The insurance bond provides zero protection. And the bond charges will make investment losses much worse.

YOU WOULDN’T USE AN UNLICENSED DOCTOR.

SO DON’T USE AN UNLICENSED FINANCIAL ADVISER.
April 27, 2019
Blackmore Bond – yet another failed investment?

Blackmore Bond – yet another reason why only regulated advisers should be used for investment advice.

The clear link between the recently-failed LCF Bond and Blackmore Bond through Surge Group remind us how important regulated investment advisers are.

In the news again is the troubled Blackmore Group. This time we read that they have ‘temporarily’ closed their bond – the Blackmore Bond – to new business. Just a few weeks ago, Blackmore Bond changed the wording of the sales material on this product.

This new transparency revealed costs of 20% and the high risks involved in the bond. Prior to this, these details were well hidden in the small print.

The Blackmore Bond transparency was not due to Blackmore Group having a yearning desire to be honest with their victims. It was all down to new FCA rules for being “clear, fair and not misleading” whenever an investment is promoted.

Recently, there has been a lot of media coverage on high-cost, high-risk bond investments failing. One of these is London Capital & Finance (LCF). This unregulated bond collapsed and went into administration earlier in 2019. £236 million had been invested into it. But investors had not been warned of the costs and risks involved. Of this £236 million, over £50 million was paid to Surge Group for promotional and marketing services.

1,200 victims duped into investing in the LCF bond

have lost at least 80% of their money

Fortunately for investors in the Blackmore Bond, it is still active. However, with such high promotional and marketing costs, the bond needs to be very successful indeed to overcome the initial 20% charges – most of which were paid to Surge.

In relation to the closure of their bond, Blackmore Group state on their website:

“We have achieved our fundraising goals for this tax year and are not currently taking in new investment. We will be introducing our next offering in the following tax year, so please watch this space for future announcements.“

Another questionable investment from the Blackmore Group is the Blackmore Global Fund.

The Blackmore Global Fund has been heavily criticised and also featured on BBC 4 You and Yours. The fund saw 1,000 victims conned into this expensive, illiquid and high-risk UCIS. It is illegal to promote UCIS funds to retail investors in the UK. They are certainly not suitable investments for a pension fund.

David Vilka of Square Mile International Financial Services was one of the promoters of the Blackmore Global Fund. Vilka invested many of his UK-resident clients into this unsuitable fund. Undoubtedly, he was paid fat commissions for these investments. Unregulated and unqualified, Vilka was no doubt lining his own pockets, instead of doing what was best for his clients.

Vilka lied to his clients, claiming to be fully regulated. He transferred his UK-based victims’ pensions into the Optimus Retirement Benefit Scheme No.1 QROPS. Much of this money was invested into the Blackmore Global fund.

The connection between Blackmore Group’s Bond and London Capital & Finance (LCF) is Surge – a marketing agent. The LCF bond was promoted by Surge until it collapsed in December 2018.

After LCF collapsed, Surge went on to promote the Blackmore Bond. This promotion was done using ISA-rating websites.

London Capital & Finance is not the only failed investment in recent years. Other failures include 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 (NERR) £207m (£62m with FPI and OMI).

The new transparency demanded by the FCA is much needed.

Unfortunately, it won’t change the fact that well over one billion pounds have been lost between LCF, Axiom, LM and NERR. We are still left wondering why the regulators have not taken a tougher stance on restricting the promotion of such UCIS funds. The FCA’s limp stance is especially worrying when the promoters of these high-risk bonds and funds are targeting UK retail investors.

All these failures and losses should remind both regulators and consumers that only regulated firms should be used for investment advice.

April 25, 2019
Store First v Insolvency Service Battle
April 2019 sees the battle between Store First and the Insolvency Service. On April 15th, the High Court proceedings will kick off. As a result, the Store First v Insolvency Service will determine how many people will lose their pensions permanently. Two sets of very expensive lawyers – DWF and Eversheds Sutherland – will battle it out to see if Store First can continue trading. In the end, if the Insolvency Service wins the war, then both law firms and an insolvency practitioner will get rich.

You can read the Insolvency Service’s witness statement here.

As a result of the Insolvency Service winning, 1,200 pension scam victims will probably lose the majority of their investments in Store First. In most insolvencies, there is little left after the various snouts in the insolvency trough have had their fill. Investors will be lucky to get 10p in the pound. If there’s an “R” in the month. And if it is snowing. And if Brexit has a “happy ever after” ending.

The Insolvency Service says it is “in the public interest” to wind up Store First. But are they right? Isn’t winding up the company going to do even more unnecessary damage?

One very important issue is that the Insolvency Service’s witness statement dated 27.5.2015 (by Leonard Fenton) is so full of inaccuracies, misunderstandings, incomplete facts and an obvious failure to understand how the scam worked – as to be utterly laughable. The Insolvency Service and the High Court will rely heavily on this witness statement – and yet it has so many holes and errors that it is misleading, incomplete and meaningless. I asked the Insolvency Service questions about the incorrect and incomplete statements and made numerous comments on the failings contained within the statement. But the Insolvency Service did not even have the courtesy to reply or even acknowledge my contribution. In my view, this is arrogance and incompetence in the extreme.

This impending legal battle (which will cost the taxpayer £millions) is riddled with many more questions than answers. Here are a couple of my questions:

QUESTIONS RE STORE FIRST V INSOLVENCY SERVICE BATTLE
- Why did HMRC and tPR register Capita Oak and Henley Retirement Benefits Scheme as pension schemes in the first place?
- How many of the many scammers behind Capita Oak and Henley have been prosecuted?
- Is there an explanation as to why Berkeley Burke and Carey Pensions are still trading?
The reason for my questions is that both HMRC and tPR were negligent in registering the two occupational pension schemes. This was because the schemes were obvious scams from the outset. They both had non-existent sponsoring employers which had never traded or employed anybody. And they weren’t even in the UK.

HMRC was blind, stupid and lazy at the start – when these two schemes were registered by known scammers. But several years later, HMRC woke up pretty smartly and sent out tax demands for the “loans” the victims received. The Store First v Insolvency Service Battle is probably doomed to ignore HMRC’s negligence in causing this disaster in the first place.

James Hay and Suffolk Life had been facilitating the Elysian Fuels investment scam at around the same time. And this was with the considerable “help” of serial scammer Stephen Ward. So, this was a prime time for scams and scammers. However, both HMRC and tPR failed the public back then and have continued to do so ever since.

In 2015, the Insolvency Service identified and interviewed most of the scammers behind the Store First pension scam. In their witness statement dated 27th May 2015, Insolvency Service Investigator Leonard Fenton cited statements and evidence from all the key players.

KEY PLAYERS IN THE STORE FIRST PENSION SCAM:
1. Ben Fox
2. Stuart Chapman-Clarke
3. Michael Talbot
4. Sarah Duffell
5. Bill Perkins
6. XXXX XXXX
7. Alan Fowler
8. Jason Holmes
9. Karl Dunlop
10. Christopher Payne
11. Keith Ryder
12. Craig Mason
13. Patrick McCreesh (of Nunn McCreesh – along with Phillip Nunn)
14. Tom Biggar
15. Paul Cooper (Metis Law Solicitors)
That is fifteen scammers who have never been prosecuted. They have not only never been brought to justice, but many of them went on to operate further scams and ruin thousands more lives – destroying more £ millions of hard-earned pension funds.

And what of Toby Whittaker’s Store First? There is no question that store pods are not suitable investments for pension fund investments. Car parking spaces are unsuitable for pensions as well. There are, in fact, a long list of inappropriate investments for pensions – including anything high-risk, illiquid and expensive or commission-laden.

TYPICAL INVESTMENTS USED BY SCAMMERS:
- Risky, unregulated funds and bonds such as Blackmore Bond, Blackmore Global, London Capital & Finance, Trafalgar Multi Asset Fund, LM, Axiom, Premier etc.
- Structured notes – especially those provided by Nomura, Commerzbank, Royal Bank of Canada and Leonteq
- Loan note arrangements such as Dolphin Trust – which has just changed its name to German Property Group GmbH
- All start-up enterprises
- Wine, art, stamps, chia seeds, truffle trees, eucalyptus plantations, art, antiques etc
All the above are routinely used and abused by pension scammers as “investments” for some dodgy scheme. Invariably, the above investments come with pension liberation fraud and/or huge introduction commissions and hidden charges. However, it is rarely the fault of the artist, wine maker, start-up entrepreneur, truffle farmer or property developer that the scammers profit so handsomely from abusing their products.

Store First v Insolvency Service Battle

I hope Store First defeats the Insolvency Service in the forthcoming battle in the High Court this month. And I hope that the public and British government will finally get to see what embarrassingly inept, corrupt, lazy regulators and government agencies we have. I will publish the Insolvency Service’s witness statement separately for anyone who wants to read the Full Monty.

Let us not forget that the solicitors acting for the Insolvency Service – DWF LLP – also act for serial scammer Stephen Ward. It was Ward who was responsible for the pension transfers which subsequently invested in Store First. Had it not been for him, 1,200 victims’ pensions totaling £120 million wouldn’t now be at risk. But, somehow, DWF LLP doesn’t think that is a conflict of interest?!?

Let us be clear: if the Insolvency Service wins the court case, the investors will get nothing. This will mean that, yet again, the victims will get punished. If Store First wins, the investors will get at the very least half their money back. If they are patient, they may even get it all back.
April 4, 2019
Raising standards – financial advisers and qualifications

I read an interesting article recently which has prompted this blog, written by Blair duQuesnay, CFA®, CFP® – an investment adviser at Ritholtz Wealth Management, LLC. Blair suggests that the most important change needed in the financial industry is qualifications. Poorly qualified advisers give poor investment advice. Bad investments advice leads to loss of funds.

Blair has said one thing that underpins all the work we do at Pension Life:

“The bar to hold oneself out as a financial advisor is low, shockingly low. This is all the more shocking because the stakes are so high. Clients have only one chance to save and invest for retirement. If bad advice leads to the unnecessary loss of capital, there is no time to start over.”

Read Blair’s piece here:

http://blairbellecurve.com/substance/?fbclid=IwAR1or8YzCkxUNh_M5-o9e7WngaYJXXV_vjyWI92ZjXEXqG5x9DWzJMA8rgc

I have written many times in the past about unqualified financial advisers, leading victims blindly into wholly unsuitable investments. These unqualified “snake-oil salesmen” often put most (or sometimes all) of their clients funds into unregulated, toxic, illiquid, no-hoper rubbish which has high commissions for the broker to earn but leave the pension or investment portfolio with an unrecoverable dent.

If investors are unsure about what qualifications an adviser needs to give advice on investments then please have a read of this blog: “Qualified or not qualified? That is the question”

Blair (pictured) talks about substance and the need for higher standards among financial advisers. Whilst I love her thoughts, I know how difficult this might be to achieve. We see wholly unqualified scammers posing as fully qualified IFAs time and time again. These scammers are very good at acting the part and the victims have no idea they are dealing with a fraudster – and sometimes go on for years believing they are dealing with a proper financial adviser.

When accepting financial advice always ask the ‘adviser’ what financial qualifications they have. If it transpires they are not fully qualified to give investment or pension advice – walk away and find someone who is.

Blair’s words highlight this issue perfectly, stating, “What sort of education, credentials, and work experience do these people have? It depends. You cannot tell which type of firm, business model, or regulatory space in which they operate or if they have the right training and qualifications to give financial advice. One broker is a CFA charterholder, while another down the hall had three weeks of sales training and took the Series 7.”

Often the best scammers are the ones with the sales training – they know how to push the ‘hard sell’, make the victim think they are ‘missing out’ if they don’t sign straight away. In offshore firms – especially – we see job adverts for new ‘financial advisers’, which state that they are looking for people with sales backgrounds. All too often there is no mention of the necessity of a financial services background, let alone any financial qualifications. Often guys that used to sell cars or holiday apartments will end up selling pension transfers. These are the ones you definitely want to avoid.

Blair goes on to say, “There’s a common phrase that it takes 10,000 hours to master a skill. Working a 40-hour week with no holidays or vacation, that takes almost five years. I would argue this number is low. I practice ashtanga yoga, a method that adds one new posture when the previous one is mastered. I spent over four years on the same posture. In that daily work of making tiny incremental progress toward the end goal, I overcame fears, corrected weaknesses, and powered through with pure determination. That is substance.”

Blair highlights that we live in a time of instant gratification and almost laziness in regards to making money. From multi-million-pound Youtubers, rich from being stupid in videos, to big-bottomed rich girls selling their life stories to become famous – it is all about obtaining difficult things easily.

Twenty-first-century living is driven by the need for wealth and the need for that wealth to be earned FAST!

These desires are what the scammers use to their advantage. They tell their victims that their funds will be placed in high-return investments. Investments that will easily add great value to their pension fund, meaning they will be able to have a lavish retirement.

The thought of possibly doubling your pension fund in just ten years can seem like something of a dream come true. AND, unfortunately, a dream is usually what this is. Placing your funds in supposedly high-return investments – ALWAYS – means taking a high-risk.

Whilst some high-risk investments do pay off, they are no place for a pension fund – life savings are what people are depending on to keep them in their later years. A pension fund is not a fund to be risked: it should be placed in a broad spectrum of liquid, low-to-medium risk investments. Maybe a small proportion could go into a higher-risk investment but only if the investor’s risk profile says he is comfortable with that degree of risk. Most people – even high-net-worth clients – don’t want to lose ANY money.

A trustworthy and fully qualified financial adviser would know this and he would ensure the advice he gives you is in your best interests – not his. The unqualified salesman giving “advice”, will usually opt for the fund that gives the highest commissions. He can walk away with a fat wallet (probably never to be seen again) and the bleak future of your pension fund is not something he will lose sleep over. But you will, when the high-risk investment in which your entire fund is trapped starts to rapidly lose value.

If the gentle reader doubts these dire warnings, just look at the facts about investment losses that we highlighted in a recent blog:

Who killed the pension? Scammers; ceding providers; introducers; HMRC?

£236,000,000 London Capital & Finance fund (bond), but also:

£120,000,000 Axiom Legal Financing Fund

£456,000,000 LM Group of Funds

£207,000,000 Premier Group of Funds

£94,000,000 Leonteq structured notes

Without stating the blooming obvious, that is well over one billion pounds’ worth of AVOIDABLE losses – and still just the tip of the iceberg.

Blair finishes her article by saying, “We owe it to our future clients to raise the bar. People deserve the reassurance that the person giving investment advice on their life savings has a baseline of knowledge. Until then, clients must continue to do their research on advisors. Look for those who have put in the time to learn their craft and have degrees and credentials to prove it. Often these are not the best salespeople, but at least these advisers have substance behind them.”

What a lovely finish and what a very important statement. Financial advisers are not salesmen, they are financial advisers. Their work should be conducted in a way that best suits the needs of the individual – each individual, separately. And there is one way and one way only to invest a client’s money: do a proper, thorough, professional risk assessment and then invest strictly in accordance with that the resulting risk profile.

Slow, steady and fully qualified financial advice always wins the race.

April 1, 2019
Who killed the pension? Scammers; ceding providers; introducers; HMRC?

In every pension scam there is one beginning, lots of middles, and always a wretched ending for the victim and a profitable ending for the scammers. The beginning is always a negligent, lazy, box-ticking transfer by a ceding provider – the worst of which always tend to be the likes of Standard Life, Prudential, Scottish Widows, Aviva, Scottish Life, Aegon, Zurich etc.

Pension scams are rarely simple and there are many different culprits to blame for the losses. The one common theme though, is that not one of the parties involved is prepared to take the blame for the victims’ losses – EVER. It was always someone else’s fault.

The pension scam trail is rather like a game of Cluedo. The question is: “who murdered the pension fund?”. We travel around the board trying to decipher who is to blame: at which point was the pension fund truly put at risk? – and with what weapon was the pension fund murdered?

While the pension fund transfer always starts with the negligent ceding provider, there are financial crime facilitators long before this: our old friends HMRC and the Pensions Regulator. HMRC registers the scams – often to repeat, known scammers. HMRC does no basic due diligence and deliberately ignores obvious signs that the scheme is an out and out scam. Then HMRC does nothing to warn the public when they discover there are dastardly deeds afoot. In the case of an occupational scheme, the Pensions Regulator allows the scheme to be registered and is slow to take any action even when obvious signs of financial crime emerge.

In recent cases, we have seen complaints – by the victims of scams – upheld against the ceding provider’s negligence in releasing the pension funds to the scammers and financial crime facilitators. And yet neither HMRC nor the Pensions Regulator is ever brought to account. The biggest problem is that – in the case of pension liberation – HMRC will pursue the victims and not the perpetrators. This then compounds the appalling damage done to thousands of people’s life savings.

We have often seen serial scammers like Stephen Ward behind scams such as Ark, Capita Oak, Westminster, London Quantum etc., and yet neither HMRC nor tPR take any action (except to pursue the victims for unauthorised payment tax charges). This is neither just nor reasonable – and yet this practice continues unchallenged.

Any half-decent detective would then turn his attention to the “introducers” and cold callers. These people draw in the victims with unrealistic promises of fat returns and “free” pension reviews. In the case of the London Capital & Finance investment scam, we have seen hard evidence of how lucrative introducing and lead generation has become. Surge Group earned over £50 million promoting the scam which saw 12,000 victims lose £236 million worth of life savings. Surge boasts that it has over 100 staff and that they are treated very well: “We have our own in-house Barista who makes the best flat whites in Brighton. Every day you will find healthy breakfasts, fridges brimming with drinks and snacks, weekly massages and haircuts provided onsite.”

In the case of the Continental Wealth Management scam, there was a further trio of suspects: life assurance companies – Generali and SEB and OMI. These providers of expensive “life bonds” pay the scammers 7% commission and facilitate the crime of defrauding victims into investing into high-risk, expensive, unsuitable investments that earn the scammers further fat commissions. Even when the portfolios have been partially or even fully destroyed (murdered), the life offices still take the huge fees and blame the advisers such as CWM – or even the victims themselves.

We also have the so-called regulators – such as the FCA (Facilitating Crime Agency) and tPR (the Pension Rogues), who are supposed to help protect the public from becoming pension scam victims. But these limp and lazy organisations are so slow off the mark, that the scammers have long since vanished by the time they take any action. This is evident in the recent London Capital and Finance investment scam; the FCA was warned back in 2015 but – of course – did nothing.

Another suspect in the pension murder crime scene is the Insolvency Service. Back in May 2015, the Insolvency Service published their witness statement in the case of a large cluster of pension scams – including Capita Oak, Henley Retirement Benefits, Berkeley Burke and Careys SIPPS – all invested in Store First store pods. The total scammed out of 1,200 victims was £120 million – and yet the only action that the Insolvency Service has taken has been to try to wind up Store First. Four years later. And all this will do is punish the victims even further – on top of HMRC punishing the victims by issuing tax demands.

The burning question is:

How long can all the parties involved in these pension scams, go on letting this happen and say it has nothing to do with them? In some cases we have the ceding providers blaming the victims for their losses!

Still, to this day, we see victims’ life savings invested in toxic and expensive assets. Nothing meaningful is being done to put a stop to it. The victims lose their money and the scammers escape with bulging pockets full of cash.

Other suspects include the advisory firms – some of which have no license to provide financial advice and few have sufficient professional indemnity insurance. Henry Tapper recently wrote an interesting blog recently about the FCA’s suggestion that financial advisory firms should have much higher PI cover.

In the offshore advisory space, regulation is still hit and miss – with some firms providing investment advice with only an insurance license. And many providing advice with no license at all. But still QROPS and SIPP trustees routinely accept business from these “chiringuitos”. But even the properly-regulated ones still routinely use expensive, unnecessary “life” bonds – and we now have hard evidence that this is a criminal matter in Spain after our recent DGS ruling against Continental Wealth Management and all associated parties.

The saddest footnote to this blog is that many so-called “experts” seem to think that the real culprit is the victim himself. They state that people who fall for scams were “stupid” or “greedy” or “should have known better. The well-worn trite phrase: “if it sounds too good to be true, it probably is” gets trotted out all too frequently. But when even regulated and qualified firms and individuals have convincing sales patters that effectively con people into expensive, high-risk arrangements with hidden commissions and fake promises of “healthy” returns, is it any wonder that so many pensions are murdered every day? And when large institutions like Old Mutual International and Friends Provident International facilitate such pension and investment scams, is it any wonder that so many highly-intelligent, well-educated people get scammed?

Ask the victims of not just the £236,000,000 London Capital & Finance fund (bond), but also:

Axiom Legal Financing Fund – £120,000,000 (most of which offered by OMI and Friends Provident International)

LM Group of Funds – £456,000,000 (most of which offered by OMI and Friends Provident International)

Premier Group of Funds – £207,000,000 (most of which offered by OMI and Friends Provident International) – including Premier New Earth and Premier Eco Resources

Leonteq structured notes – £94,000,000 (all of which offered by OMI)

April 1, 2019
20% Black Hole in Blackmore Global

Much like a black hole in Space, the Blackmore Global Fund and Blackmore Bond will swallow up victims’ savings – and never spit them out again.

20% Black Hole in Blackmore Global

It is no secret that we have little confidence in the Blackmore Global Group run by Phillip Nunn and Patrick McCreesh – two of the scammers who promoted Capita Oak and earned nearly £1 million from providing “leads” for the cold callers. Capita Oak is now under investigation by the Serious Fraud Office, and Nunn McCreesh’s nefarious activities were investigated and reported on by the Insolvency Service.

To confirm our suspicions that Nunn and McCreesh’s Blackmore Global Fund and Bond are not just high-risk and illiquid crap (and – of course – totally unsuitable for pensions or anyone with less money than sense), they have announced that 20% of your money could go towards paying for the “costs of the investment”. To put that into plain English, any of the unregulated scammers who promote and distribute the Blackmore investments are earning 20% in commission.

This new-found “transparency” by Blackmore is neither a courtesy to their customers, nor evidence of voluntary honesty. Rather, it is a reaction to the FCA´s new rules for being “clear, fair and not misleading” .

Bond review reported on this and noted that prior to this forced change, Blackmore Global´s website could be read as:

“Capital Protection” and “Income Certainty”. Immediately below these phrases, in letters half the size, were the words:

“Capital at risk | Please read our risk section. Illiquid and non-transferable. Not FSCS”

This change is in connection with Nunn and McCreesh’s Blackmore Global Bond. Their Blackmore Global Fund has already featured heavily in the press with criticisms about its costs and unsuitability for pensions. BBC 4 You and Yours did a feature on the fund back in January 2018, finding that an unregulated adviser – David Vilka of Square Mile International Financial Services – invested many of his QROPS clients into this unsuitable fund – which undoubtedly will have paid him fat commissions.

THE BLACKMORE GLOBAL FUND IS A UCIS (UNREGULATED, COLLECTIVE, INVESTMENT SCHEME) WHICH IS ILLEGAL TO PROMOTE TO UK RESIDENTS. Yet, David Vilka – who had no investment license – promoted it and Nunn and McCreesh accepted the many investments into it from him.

What is similar in both the Blackmore Global Fund and Bond, is the lack of transparency from the start. With the fund, there was also a ten-year lock-in, which was in the small print and not mentioned to the pension investors at the time of signing over their pensions to the scammers. Some of the members were nearly 60, meaning that they were unable to access their money when they retired.

The Bond, up until now, has had no transparency on its charges – and the risk factors were most definitely hidden.

The confirmation of a 20% commission charge (to the scammers who promote and distribute this risky, expensive, opaque investment) comes as a welcome dribble of transparency. However, it is still unclear as to how – after this huge payment – Blackmore investors will ever be able to recoup the initial costs and then start to make some headway on their investment.

Bond Review explains this well:

“In slightly simplified terms, if Blackmore raises £10,000 from an investor in its 3 year bonds paying 7.9% per year, and pays out 20% in commission, it now needs to turn £8,000 into £12,370 to repay the investor in full, representing a 55% return over 3 years – or 15.6% per year.

For its 5 year bonds paying 9.9%, the return required to turn £8,000 into £14,950 is 87% over 5 years, or 13.3% a year.

Any investment targeting a return of 15.6% or 13.3% a year will inevitably be extremely high risk – and while Blackmore can diversify over many such projects, some of its projects will fail, which will lower the overall return.”

This is not an investment to enter into lightly (or at all). Blackmore Global showed net liabilities of £7 million on assets of £18 million in its last accounts – December 2017. Finances and accounts can dramatically shift in the short space of one year: a well-run, professional and ethical company could turn things around. But with Blackmore Global failing for three years to even produce audited accounts on their fund, and lying about who their Investment Manager is, this hardly inspires any confidence at all.

Another worrying thing about Blackmore Global is that they use Surge Financial to promote their toxic wares – and has paid this firm £5.1 million in one year for “marketing services”. Surge Financial is run by Paul Careless, and was promoting the failed London Capital & Finance fund, which paid out an eye-watering 25% to the scammers who promoted and distributed their toxic wares. Having conned thousands of victims into investing £236,000,000 into London Capital and Finance, the whole lot is now probably lost as the company has gone into liquidation. But Surge Financial pocketed £60,000,000 in marketing this toxic fund – and is still promoting Blackmore Global. The FCA declared that the marketing blurb was misleading, unfair and unclear – and it is obvious that the lies told in the glossy brochures duped thousands of people into losing their life savings.

So, with Blackmore Global also using Surge Financial to source victims, and succeeding at the rate of £1.5m a month, it is a serious worry that there will be thousands more victims when the Blackmore Global shit hits the fan.

Bond Review is quoted as saying:

“That Blackmore Bond paid out up to 20% in commission is already known from Blackmore’s December 2017 accounts, which disclosed that £25.4m had been raised in the period (July 2016 to December 2017) and that £5.1m had been paid to Surge Financial for “sourcing investors loans and front and back office operations” (almost exactly 20%).

Could Blackmore Global go the same way as London Capital Finance? We already know that the Blackmore Global fund has been used to scam hundreds of UK-resident victims out of their pensions using QROPS. We also know that few of these victims have had their money back – and that there is zero disclosure as to where the money has gone.

Just remember: there are perfectly-good, regulated funds out there – with extremely low charges, zero commissions to scammers, and excellent performance history (openly reported in the public domain). People don’t need to put their hard-earned savings in black holes such as Blackmore which don’t even disclose what the underlying assets are.

March 11, 2019