Tag: Nomura structured notes

  • CRIMINAL CASE AGAINST UNLICENSED FINANCIAL ADVISERS

    CRIMINAL CASE AGAINST UNLICENSED FINANCIAL ADVISERS

    Denia Courthouse
    Denia Courthouse

    CRIMINAL CASE AGAINST UNLICENSED FINANCIAL ADVISERS:

    Last month saw the first of the CWM pension scam victims testifying in the criminal court of Denia, Alicante.  Nine brave people re-lived their ordeal in front of the judge.  They answered the judge’s questions, and were then cross-examined by the defendants’ lawyers.

    Darren Kirby in front of CWM office
    Darren Kirby in front of CWM office

    The complainants who testified were all clients of Continental Wealth Management (CWM) run by Darren Kirby and Jody Smart (pictured below), as well as Premier Pension Solutions (PPS) run by Stephen Ward.  PPS was an “agent” and “partner” of AES Financial Services run by Sam Instone. (PPS and AES are now under investigation for their role in the 2011 Ark Pension Liberation scam).

    It is hard enough for a pension scam victim to be reminded of their ordeal at the hands of callous, greedy scammers.  But to have to recount in graphic detail the methods used by the scammers was hard for them to bear.

    The scammer’s typical arsenal of weapons comprises a series of lies – adeptly used to trick the unwary into handing over their pensions and life savings.  The victims who testified in Denia know these lies all too well.  And now, so too does the judge:

    Cyrus regulator logo

    LIE NO. 1: “We’re fully regulated”.  This, of course, was completely untrue.  CWM operated, purportedly, as a member of the Inter Alliance “network”.  And Inter Alliance was not only unregulated but had been fined by the Cyprus regulator for providing regulated services without legal authorisation.

    Jody Bell of CWM
    Jody Smart of CWM

    LIE NO. 2: “Yes, I’m fully qualified”.  This, again, was untrue.  Few – if any – of the people working for CWM had any financial qualifications.  They were mostly poorly-educated salesmen with the gift of the gab.  They had learned a well-used and very clever script which was designed to mislead and defraud their victims.

    Toxcic insurance bond providers; Quilter, Utmost & SEB

    LIE NO. 3: “The case for transferring your pension into a QROPS is overwhelming”.  In the case of final salary pensions, this was never true.  A guaranteed income for life from a company pension final salary scheme can almost never be bettered.  Most personal pensions should also have been left where they were.  In fact, all pensions would have been better off avoiding ending up in the hands of CWM – even if a QROPS had been the right option.

    LIE NO. 4: “Your pension needs to be in an insurance bond (Quilter, SEB or Utmost).  This is for protection and tax efficiency”.  This was never true. The bond provided no protection, no tax savings, no flexibility.  The 7% commission paid to the “adviser” was not disclosed. 

    LIE NO. 5: “Your money will be invested in blue chip companies and you will get high returns and low risk.”  High returns come with high risk – and the high commissions (paid to the scammers) were hidden from the victims.  Toxic structured notes were used for all the victims – and these are complex investment products which were only suitable for professional investors. 

    There were, of course, many other lies – including the fact that when the toxic structured notes and unregulated funds failed, these were “only paper losses”.  Plus the fact that the investors’ signatures were forged or copied on the investment dealing instructions.

    Structured Note Providers

    The second half of the complainants will be heard by the court on 9th and 10th December 2021.  Once the court has heard from all these victims (minus Bob Bowden who sadly passed away recently), the fate of the defendants will be decided by the judge.  Let us all hope this will herald an end to these types of pension and investment scams. 

    Perhaps “the end” will be just the beginning.  A new dawn for an offshore financial services industry which sells proper financial advice – and not just commission-laden products.

    CRIMINAL CASE AGAINST UNLICENSED FINANCIAL ADVISERS

  • Store First v Insolvency Service Battle

    Store First v Insolvency Service Battle

    Pension Life Blog - Store First v Insolvency Service - store first scam

    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:

    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.

     

     

     

     

     

  • Raising standards – financial advisers and qualifications

    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”

    Pension Life Blog - Raising standards - financial advisers and qualificationsBlair (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.

  • International Adviser – Giraffe Awards

    Looking at International Adviser’s 2017 awards, I really think the judges were having a giraffe (or they were very drunk).

    “Best regular premium investment product – Hong Kong – Zurich International Life” 

    Seriously?  This grim firm has one of the most expensive long-term savings plans on the market.  A victim scammed into buying one of these toxic, inflexible products will pay 48.07% of their savings in fees to Zurich.  To put this into real numbers, a victim who saves £366,600 over a 25-year period, will pay £176,240 in fees.

    In this disgraceful long-term rip-off contest, Zurich is in the midst of the others who similarly overcharge their victims with these undisclosed charges: RL360 at 51.68%, Hansard at 51.28%, Generali at 47.08% and Friends Provident at 46.64%.  Savers would be better off sticking their savings under the mattress, away from the greedy clutches of these rip-off merchants.

    “Best regular premium investment product – Singapore – Friends Provident International”

    OK, perhaps the least expensive of the big five, but still 46.64% is ludicrously expensive.  These long-term savings plans are routinely mis-sold and victims end up losing most of what they have saved.

    “Readers choice – Europe – SEB International”

    This life office was routinely ripping off pension savers by taking business from unlicensed, unqualified, unscrupulous scammers Continental Wealth Management from 2010 to 2017.  To the tune of 1,000 victims with £100 million worth of investments.  About half of which has been destroyed.  SEB stood by and watched CWM invest hundreds of victims’ life savings in toxic, high-risk, professional-investor-only structured notes.  As the scammers gambled away millions of pounds, SEB kept taking their fees – based on the original investment value.  In this case, all of SEB’s victims lost part or all of their retirement funds.

    I HAVE DECIDED TO INVITE MY FRIENDS AT INTERNATIONAL ADVISER TO LAUNCH A NEW AWARDS CEREMONY:

    THE GIRAFFE AWARDS

    My proposal is that awards are given every year for the worst performers in terms of either operating scams or facilitating them.  Let us be very clear – we are talking about financial crime here.  It is extremely important that publications such as International Adviser do their bit in cleaning up the financial services industry.  That is why these awards are so important.

    The judges should be the victims themselves.  Here are my nominations – but am more than happy for victims to suggest others:

    Advisory Firms: Continental Wealth Management, Holborn Assets

    Pension Trustees: Concept, STM Fidecs, Fast Pensions

    Life Offices: SEB, Generali, Hansard

    Funds: Blackmore Global, Trafalgar Multi-Asset, Christianson Property Capital

    Structured Product Providers: Leonteq, Nomura, RBC, Commerzbank

    Regulators: Isle of Man, New Zealand, United Kingdom

    It is clear that regulators and ombudsmen are useless, limp and disinterested in how their respective jurisdictions operate financial crime so routinely.  International Adviser could emerge the hero by exposing the appalling practices in offshore financial services which routinely destroy victims’ retirement savings.  (Or not, as the case may be).

     

     

     

     

  • OMI – AND OTHER GRIM REAPERS

    OMI – AND OTHER GRIM REAPERS

    OMI – Old Mutual International (Quilter), SEB, ZURICH, GENERALI, FRIENDS PROVIDENT, ZURICH INTERNATIONAL, RL360 AND HANSARD INTERNATIONAL.  They are all as bad as each other.  They rip their clients off, charging them huge fees and commissions, tying them into useless, pointless products for years.

    These LIFE OFFICES – which cause the death of many life savings – use unregulated advisers to flog their crummy wares.  It is hard to tell which of these bandits is the worst.

    For years life offices charged their huge fees, paid Continental Wealth Management huge commissions, and sat idly by as they watched hundreds’ of victims’ pensions plummet in value as CWM played roulette with the funds using toxic structured notes from Commerzbank, RBC, Nomura and Leonteq.

    Generali sat back and did nothing while this victim's pension lost huge amountsOne Generali victim saw her £119k pension fund plummet to £36k in five years.

    Neither Generali nor SEB has offered any compensation to the hundreds of victims in the Continental Wealth Management scam.  Undoubtedly, they treat all their victims just the same: BADLY.

    Pension Life is horrified at the huge charges in these inflexible and expensive long-term savings plansPension scams are not the only arrangements that these life offices profit handsomely from.  Another method they use to rinse extortionate fees out of unsuspecting victims is the LONG TERM SAVINGS PLAN.  Clients think these are a good idea until they realise the huge hidden charges which decimate the funds they put towards these plans.

    And when they finally admit to themselves that they have been conned, the victims discover how inflexible these plans are with fatal exit arrangements that can wipe every last penny saved.

    It is time to recognise and admit that if life offices continue to behave in this way, they have no place in pension and retirement arrangements – since all they do is facilitate catastrophic losses.  It is also time to expose the fact that life offices’ long-term savings plans merely fleece savers and put their savings at risk.

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

    What is a pension scam?

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