In 2018, Old Mutual International (now Utmost International) announced it was suing structured note provider Leonteq. This was over a series of rogue structured notes with an extra layer of secret commission paid to scammers without Utmost International’s knowledge (allegedly). These notes had failed because they were so enormously high risk. The result was thousands of Utmost’s victims losing huge amounts of their pensions and life savings.
On 28th May 2024, it was announced by QROPS trustees and Old Mutual (later renamed Quilter and now owned by Utmost International – formerly Generali) that Leonteq had settled out of court for the damages caused by these toxic structured notes to thousands of investors.
This announcement was reported by Momentum Pensions in Malta – among other QROPS trustees. Some victims of offshore pension scams facilitated by Old Mutual, Generali, Utmost, RL360, SEB and other life offices will get some compensation for a small part of their huge losses.
Old Mutual International, the life office responsible for thousands of ruined lives in Spain and beyond, announced in 2018 that it was suing structured-note provider Leonteq. There had been a series of extra toxic, high-risk notes for which Leonteq had been paying scammers additional commission “under the table” (i.e. not disclosed to Old Mutual). In early 2023 the matter was settled out of court for an undisclosed amount.
But this is no real compensation for the years of distress and poverty the many thousands of Utmost’s victims have gone through. Lives have been ruined. Families torn apart. Homes lost. Victims have died miserable, lonely deaths – leaving distraught and destitute spouses and partners.
It had originally been reported that Old Mutual had been suing Leonteq for somewhere between £94 million and £200 million. The basis for this action was undisclosed commissions – which is fraud. But Utmost (along with all other life offices) had been quite happy to pay millions in undisclosed commissions to the vast array of scammers who sell their offshore bonds and toxic investments (such as structured notes). But while Utmost had no problem with these outrageous commissions being kept secret from the victims, they objected to the Leonteq commissions being hidden from Utmost themselves.
Momentum is taking further advice on the legalities and tax implications of paying this compensation to pension scheme members. Presumably, STM, SEB and other QROPS providers who had facilitated this fraud will be doing likewise.
While this is indeed welcome news for the thousands of pension savers whose lives were ruined by these failed investments, it does leave many unanswered questions:
Why did the life offices such as Utmost give terms of business to the scammers in the first place?
Why didn’t Utmost ensure the scammers disclosed the commissions on the insurance bonds and also on the investments?
Why did Utmost allow retail investors’ money to be invested in professional-investor-only, high-risk investments?
Will Utmost be paying compensation for all the other structured notes which were toxic and which failed?
Utmost’s answer to these questions would, obviously, be: “We didn’t give investment advice”. And this is the excuse they will make when they testify in the Isle of Man court – where Signature Litigation and Forsters are suing them and Friends Provident International for £400 million for this very crime.
Utmost and all the other life offices did not – indeed – give investment advice. However, they did act on the investment instructions (often forged) of unlicensed scammers – and reported on the resulting crippling losses for thousands of policyholders. Despite being fully aware of these losses, Utmost continued accepting investment instructions (often with forged investor signatures) for years – paying the same undisclosed commissions to the same scammers, with the same resulting losses.
In fact, Utmost International continues with this fraud to this very day. And now there is evidence that they are paying even higher undisclosed commissions to the very same scammers who have already ruined so many lives for well over a dozen years.
Utmost had not been the only life office involved in the Leonteq structured note scandal. Friends Provident International, Generali, Investors Trust, Julius Baer, RL360 and SEB had all been similarly culpable. But it looks like Utmost had been the only one to sue Leonteq for this fraud.
And let us be clear, undisclosed commission does constitute fraud – irrespective of whether it is committed by the scammers, Leonteq or Utmost International.
Perhaps the biggest question which remains unanswered is why the regulator – the Isle of Man Financial Services Authority – has done nothing to sanction the likes of Quilter, Utmost, Friends Provident and RL360? The regulator’s Chair – Lillian Boyle – has been in place since 2015 so she must have known perfectly well how much fraud had been facilitated by the life offices.
Boyle had previously been the CEO, Director and Chair of Isle of Man international life companies and their overseas subsidiaries and branches. So she must have had intimate knowledge of how the secret-commission fraud worked. And yet she has stayed silent.
The IoM FSA’s Chief Executive is Bettina Roth. She has worked for the regulator in the Cayman Islands (that well-known jurisdiction for dodgy financial dealings – including the Trafalgar Multi Asset Fund investment scam). And yet she too has stayed silent. Both Boyle and Roth must know that the Isle of Man is under the spotlight with nearly half a billion pounds’ worth of claims against the death offices for fraud (and a billion more in the pipeline).
The IoMFSA’s own website claims it is “responsible for protecting consumers, reducing financial crime and maintaining confidence in the financial services sector through strong prudential supervision”. And yet the very financial crime that Old Mutual and Utmost International have been committing for more than a dozen years – under the very nose of the regulator – is ignored.
It is indeed great news that Leonteq has paid up. But, did that payment include all the extra-commission paid on the toxic structured notes? And any interest, damages and compensation for the losses and the fraud? And what about the other structured note providers whose toxic products caused just as much (and sometimes more) damage to thousands of victims?
Royal Bank of Canada, Nomura and Commerzbank also listed their toxic products on Utmost Internationals’ investment platforms. A multitude of scammers (who had terms of business with the life offices) used these to ruin their low-risk, retail victims. Did any of these big financial institutions care that they were facilitating financial crime on a massive scale – and ruining thousands of lives?
With the IoM regulator silent, this massive international fraud continues to this day. The life offices are still paying the scammers huge undisclosed commissions for both the insurance bonds and the investments listed on their platforms. In fact, the bond commission can be as high as 9% – for a product that nobody needs and which only serves to facilitate fraud against the policyholders.
In 2018, Utmost International commissioned a report on the Leonteq structured note scam from https://www.futurevc.co.uk/ – a consultancy firm which specialised in structured products systems and research analytics. Their Managing Director, T. M. Mortimer, analysed a test sample of 100 notes and reported the below fees and commission figures:
Fee Level
Number of Occurrences
Less than 6%
9
6% – 8%
4
8% – 12%
21
12% – 16%
26
16% – 20%
14
20% – 24%
12
24% – 28%
6
28% or more
8
100
Mortimer concluded: “In my view a total fee of 8% taken between Leonteq and its associates would be reasonable. This corresponds to the entries in the first two rows in the table.”
This means that only 13% were reasonably (i.e. viably) priced. The remaining 87% were vastly overpriced with extortionate commissions paid to the scammers.
The insurance bond scam continues to flourish in all the typical British expat destinations – from Spain and Portugal to Thailand and the Middle East. Life offices such as Utmost International and RL360 continue to fuel the global undisclosed commission fraud machine – with scammers posing as financial advisers and selling over-priced products rather than proper financial advice.
Leonteq is still doing a roaring trade – thanks to the offshore scammers and the life offices. The secret-commission fraud still flourishes unhindered. Utmost International and Friends Provident International are throwing millions at defending the Signature and Forsters actions brought by thousands of victims. The regulators remain silent.
Every day more victims are created. How many more victims need to be ruined before something is done to put a stop to this huge-scale offshore financial crime? Leonteq may have paid up – but now the life offices themselves (including Utmost International, RL360 and SEB) need to pay up too.
High Court Rules in Trafalgar Multi Asset Fund Case against James Hadley and associates.
In a recent High Court judgment, Judge Mr. Nicholas Thompsell found that the Cayman-Islands based Trafalgar Multi Asset Fund (TMAF) was involved in an illegal conspiracy to “extract commissions from the investments.” The defendants, who were also behind the 2013 Store First pension investment scam, were found guilty of acting together to establish TMAF and deceive investors.
The claimant, Doran & Minehane, the liquidator of TMAF, argued that the investments were uncommercial transactions, potentially fictitious, or involved undisclosed self-dealing benefiting the conspirators. The investments were designed to exploit and misappropriate pension funds for the defendants’ benefit.
The judge determined a deliberate intention to harm TMAF, stating that the arrangements aimed to generate commissions for the conspirators at the fund’s expense. The accused faced a range of serious accusations, including breach of financial services regulation, fiduciary duties, and involvement in unlawful means conspiracy.
The victims, who suffered significant losses due to these schemes, have our sympathy. The court’s judgment establishes solid principles of liability, which may lead to a faster receipt of claimed monies and reduced legal costs for the defendants.
For the full judgment, click here: High Court Rules in Trafalgar Multi Asset Fund Case against James Hadley and associates.
This is a helpful lesson for victims and potential victims of pension and investment scams. The FSCS compensation payments will be funded by levies on the decent, qualified and ethical IFAs who don’t operate scams. Justice and education combined in one bitter pill.
The Spanish criminal trial of so-called “financial advisers” in Denia has exposed the widespread fraud routinely committed in offshore financial services for over a decade.
This particular stage of this particular trial may be directed at just eight members of Continental Wealth Management and Premier Pension Solutions. For now. But the case – brought by Pension Life – needs to be extended to all parties who have committed similar offences in offshore financial services.
Spain is the second-largest expat jurisdiction in the world – after Australia. More than three quarters of a million British expats have settled in the Spanish sunshine. That’s over half the total in the whole of Australia. And these Spanish-resident expats are sitting targets for pension scammers.
It is not unusual for Brits to be suspicious of foreigners in any country. Expats typically veer towards their own countrymen. They are notorious for being suspicious of foreign food and customs. Hence, the depressing fact that it is British scammers who relieve British victims of their pensions and life savings.
And this is why so many British expats – especially in Spain – fall prey to bogus “financial advisers” flogging bogus life assurance policies provided by bogus insurance companies – like Quilter International headed up by Peter Kenny.
The facts of this criminal case are indisputable. One thousand victims were scammed by Continental Wealth Management. Between 2009 and 2017, these victims lost many millions of pounds’ worth of pensions and life savings. And much of this was facilitated by Quilter International (formerly Old Mutual International).
So how were these losses caused? What on earth went wrong? Financial services – in any country – should be a safe industry which investors can rely on. Depend on. Why have so many expats – not just the Continental Wealth Management victims – lost so much money?
Who and what is to blame for the loss of hundreds of millions of pounds?
The short version of the answer is: “COMMISSIONS”. Offshore advisers get rich by selling products for commissions. What they don’t sell is independent financial advice. Proper independent advice (provided by a correctly and properly qualified and licensed adviser) is about recommending an appropriate investment strategy which is in the best interests of the client. And, of course, charging a reasonable and commercially-viable fee for such advice.
But that rarely – if ever – happens in offshore, expat jurisdictions. What is cleverly presented as “advice” is generally just a dishonest ploy to sell a client unsuitable products which they don’t need and that will make the salesman the most commission.
The orchestrators, facilitators and architects of all this fraud are the “life offices”. In practice and in reality, these companies are more about death than life. Their business is about destroying life savings and pensions – while enriching the pockets of fraudsters.
There are various ways to combat this widespread fraud facilitated by the life offices:
Bring criminal proceedings against ALL those who have defrauded their clients – from bogus, unlicensed advisory firms to the life offices themselves
Ensure all so-called advisory firms (sometimes calling themselves “wealth managers”) are correctly licensed in the jurisdiction where they provide advice
Make it mandatory for all advisers to be properly qualified to provide financial advice
Ban all firms without an investment license from providing investment advice
Educate consumers to only use advisory firms which openly disclose their professional indemnity insurance on their website
The bald truth is that if the life offices – such as Quilter International, Friends Provident International and RL360 – were closed down, this widespread fraud would stop.
The only way this fraud keeps going so vigorously and relentlessly, is the terms of business given by the life offices to the scammers. And, of course, the fat commissions the life offices pay to them. As well as the toxic, risky, high-commission-paying investments the life offices put on their “platforms” for the scammers to use (and abuse).
You only have to look at Continental Wealth Management to see how quickly a scamming firm will collapse once life offices withdraw terms of business. The life offices are the life blood of scams and scammers.
Without the facilitation of the “death” offices (Quilter International, Generali, SEB etc.) frauds such as Continental Wealth Management could not have taken place. The blood of all those who have died wretched, lonely deaths – and those who are suicidal – is squarely on the hands of Peter Kenny and his various cronies.
The bank statements of Continental Wealth Management show the repeated amounts of fat commissions paid by Quilter International, Generali and SEB. And these amounts were paid willingly and cheerfully in the full knowledge that every payment meant more lives damaged; more funds destroyed; more miserable deaths.
Quilter and their associates had reported on the victims’ losses for a decade; produced valuations and transaction histories evidencing the repeated, relentless fraud. And yet Quilter (and the other death offices) did nothing – just kept on and on facilitating the same fraud: repeat, repeat, repeat.
While the “advisers” from Continental Wealth Management and Premier Pension Solutions stand trial – the hundreds of victims have to listen to the defendants’ offensive denials and excuses. But, worst of all, the distressed and impoverished victims know that the life (death) offices should also be on trial – standing shoulder to shoulder with the scammers themselves.
The cause of the investment losses in the Continental Wealth Management case was almost exclusively toxic, high-risk (and high-commission) structured notes. These are complex investment instruments called “derivatives” and should only ever be used for professional or sophisticated investors. They are certainly completely unsuitable for ordinary people (who are classed as retail investors) or for pension schemes.
High-risk structured notes are big business for the death offices. Quilter International (formerly Old Mutual International) has historically onboarded over 100 new structured products per month. In the case of the Continental Wealth Management fraud, it was the structured notes – from Leonteq, Commerzbank, Royal Bank of Canada and Nomura – which caused the terrible investment losses. These toxic, high-commission investment products – so beloved by the scammers because of the high commissions – were responsible for the destruction of millions of pounds’ worth of pensions and life savings.
Quilter International knew perfectly well that these toxic products – totally unsuitable for retail investors – paid 8% commission to the scammers and a further 8% to 10% to the “arrangers”. They knew perfectly well – and admitted internally to their “asset review committee” – that these products were risky and “not good value”. But they still allowed the scammers (to whom they gave terms of business) to keep selling them.
Quilter has also admitted that they had 2,047 structured products in total, and that the average holding per product was £243,654.03; that the smallest holding was £67.54 and the largest holding was £5,350,833.60. Quilter was concerned that there was a reputational risk to Quilter for allowing these structured products to be held within their offshore bonds. They also acknowledged that these products carried excessive commissions and were causing “suboptimal customer outcomes”. However, their concern for their own “reputational risk” did not extend to concern for their victims.
Quilter has tried to wriggle out of culpability for the victims’ losses by claiming that investment product “suitability” is the responsibility of advisers. And that these so-called advisers are participating in a “race to the bottom”.
However, the advisers are mostly scammers to whom Quilter has cheerfully given terms of business. And they are winning the race to the bottom by several lengths. If Quilter withdrew terms of business from all the scammers, the race wouldn’t even take place at all. In fact, all Quilter would have to do would be to ensure that all advisers are qualified and licensed – and that investors’ risk profiles are correctly respected – and the fraud would stop instantly.
But until Quilter and all the other death offices are put on trial for fraud themselves, this crime is going to continue. And victims are going to keep losing their pensions and life savings – and dying in abject poverty.
As an interesting post script, Quilter have posted a warning about scams on the internet. Their disingenuous claim that “Your security is our priority, so we have reacted quickly to help you and the financial advisers we work with to spot fraudsters” is ironic and cynical. Quilter themselves routinely work with fraudsters who pose as financial advisers – and who have no license or qualifications to provide financial advice.
January 28/29 2021 saw the cross examination of Stephen Ward in Pension Life’s criminal case in the Denia court. Ward gave the judge an elaborate explanation as to how and why none of the Continental Wealth Management pension and investment scams were his fault.
Ward provided the pension transfer “advice” to hundreds of Continental Wealth Management victims – facilitating the handing over of millions of pounds’ worth of personal and occupational pensions into the hands of well-known, firmly-established scammers. Once out of the relative safety of the UK, and into the offshore abyss, the scammers made millions out of undisclosed commissions on the victims’ life savings. The investments were, of course, largely worthless. Victims lost somewhere between a small percentage and a large percentage – with a few losing 100%. And a few more even going overdrawn on their pension accounts.
Ward’s Spanish firm Premier Pension Solutions, worked as “sister company” to Darren Kirby’s and Jody Smart’s Continental Wealth Management. After Ark in 2011, Ward moved straight onto the Evergreen New Zealand QROPS liberation scam. And CWM did the cold calling to sign up 300 victims to the toxic £10 million pension scam and so-called “loans” from Ward’s own finance company – Marazion.
Ark (and indeed Evergreen) victims may well want an answer to the question: why hasn’t Ward been prosecuted before now? The lack of any previous criminal proceedings against him, for the many other scams he was involved in, is – indeed – astonishing.
Capita Oak, Westminster, Southlands, Headforte, London Quantum et al – could all have been prevented had Ward been behind bars. Victims of all of those scams might still have their pensions had it not been for Ward.
Part of the answer may lie with Dalriada Trustees. The firm was appointed by the Pensions Regulator to the Ark schemes as independent trustee on 31st May 2011. Over £27 million worth of pensions had been transferred from safe, professionally-run pension schemes into the six Ark schemes. Nearly 500 people are affected – many of whom had received reciprocal “loans” on the advice of Stephen Ward and his very convincing associates. Ward had assured all the victims that the loans would be “tax free”. But, of course, HMRC does not share that view – and the tax trial is starting in March 2021.
HMRC is looking to tax all those who did get “loans” and also all those who didn’t. HMRC’s argument is firstly that even if members didn’t get a loan, they had made the transfer with the intention of getting a loan, and secondly that they “made” a loan.
One of the first questions I ever asked Dalriada back in 2013 (appointed by the Pensions Regulator – who registered the Ark schemes in the first place) was:
“Why didn’t you bring criminal proceedings against Stephen Ward and all the other scammers who set up and ran Ark?”
Dalriada’s answer was:
“We didn’t think it was within our remit”.
So what is (or was) Dalriada’s remit? And has it fulfilled that remit? And how much has it cost?
DALRIADA’S REMIT:
To suspend the Ark schemes so that no further “loans” could be made; no further victims lost their pensions; no further toxic investments could be made
To investigate the schemes to find out how they had been run and where the money had gone
To recover the toxic investments and return the money to the schemes
To liaise with the members and keep them informed
To liaise with HMRC on the unauthorised payment tax liabilities
The above points are all guesses on my part. Certainly, Dalriada has admitted that they didn’t really know where to start at the beginning. They had no idea what they would find, once they started investigating, and no clue as to how much work was going to be involved.
Dalriada has, indeed, recovered some of the toxic investments in the Ark schemes. But communications with the members have been limp at best. Dalriada has spent a lot of time, effort and money on taking proceedings against the victims themselves to recover the “loans”, but seems to have spent zero time, effort or money on pursuing the scammers.
Most important of all, Dalriada has not invested any of the money left in the Ark schemes – so members (victims) have missed out on the longest investment bull run in history. Bottom line: there’s been no growth in the value of the Ark funds – only shrinkage. Had the funds been invested in something as simple as a low-cost tracker fund, they could have grown by some 330% at least.
Of the original £27 million in the Ark schemes, Dalriada has spent more than £7.4 million on trustees’ and lawyers’ fees between 31st May 2011 and 31st May 2020. But isn’t it reasonable to ask: “Why couldn’t Dalriada have spent some of that money on criminal proceedings against Stephen Ward and some (or all) of the other scammers?”
Dalriada Trustees have been appointed to more than 100 pension scams in the past ten years (by the Pensions Regulator). But there is no evidence that any of the scammers – especially the prolific Stephen Ward – have ever had any CRIMINAL action taken against them by Dalriada in an effort to prevent further scams.
Kelly reports that “Pension scam victims have lost millions of pounds more to the government-appointed trustees hired to get their money back.” and that “Victims say Dalriada Trustees ‘inexplicably’ held their recovered retirement savings for years and then only paid a fraction of their money back.”
Kelly has been to meet me in Spain several times. He attended the Denia court for the first set of cross examinations in 2020, and reports that “tens of thousands of savers had lost up to £10 billion in rogue schemes that looked safe because they were registered by HMRC and overseen by the Pensions Regulator”.
Kelly goes on to cite the case of one victim who waited seven years to have his £157,000 pension pot returned to him by Dalriada. But they deducted £90,000 in charges before handing it back to him. And this was after Dalriada had rescued the fund in full, before the scammers had managed to invest the money in toxic, commission-paying assets.
With 5,400 pension scam victims having Dalriada as their trustees, it is perhaps time to ask whether this is a tenable solution. Scammers could, realistically, be forgiven for thinking that once Dalriada takes charge, this is merely a license for the next scam, and the next one, and the next one…… Because, Dalriada is never going to report the scammers for fraud. So they are free to keep on scamming people out of their pensions repeatedly.
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 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.
In the past decade, millions of pounds of pensions and life savings have been destroyed in Spain. Much of this has involved insurance bonds (OMI, SEB and Generali) – as well as all other popular expat countries. Only by benefitting from lessons learned so painfully by those who’ve already been scammed, can new potential victims arm themselves against the scammers.
Pension scams always start with a so-called “financial adviser” or “wealth manager” or “retirement consultant”. Sadly, it is almost always British “advisers” which scam British expats.
Potential victims need to understand what to look out for – and avoid. Here are the essential “must haves” for proper, professional financial advisers (in other words people who sell advice, not products):
LICENCE – The firm must be licensed – both for insurance and for investment.
QUALIFICATIONS – The adviser must be qualified – and a link to proof of the qualification clearly visible on the firm’s website.
LEGACY – There must be no legacy of previous scamming within the firm.
INSURANCE – There must be a professional indemnity insurance policy in place.
NETWORK – If the firm is an agent of a network, there must be an up to date copy of the agency agreement freely available.
INSURANCE BONDS – The firm must not sell insurance bonds illegally.
UNREGULATED FUNDS AND STRUCTURED NOTES – The firm must not invest clients’ funds in unregulated or esoteric funds, or structured notes.
COMPLIANCE – There must be a proper compliance function in place.
MANAGEMENT AND TEAM – All members of the team must be clearly visible on the website – along with details of who is in charge and responsible for the firm’s activities and compliance.
COMMISSION POLICY – The firm’s policy on undisclosed commissions must be clearly visible.
When I Googled the term: “Financial Adviser Spain” just now, the top results that came up for me were:
Blacktower Wealth Management
Blevins Franks
Finance Spain – Patrick Macdonald
Spectrum IFA
Chorus Financial
Abbey Wealth
Alexander Peter
Axis Consultants
Logic Financial Consultants
Harrison Brook
Seagate Wealth
When I changed the search term to: “Pension Advisor Spain” or “Wealth Advisor Spain” I also got the following:
deVere Spain
Mathstone Financial Management
Pennick Blackwell
SJB Global
United Advisers Group
Indalo Partners
Trafalgar-International
Fiduciary Wealth Management
And one firm which won’t come up at all, no matter how hard you search, is:
Roebuck Wealth – run by Paul Clarke
Plus one which only comes up if you know what to search for:
So let’s take a look at some of these firms to see what we can learn from their websites and see if there are any warning signs for potential victims:
Blacktower Wealth Management – Always look at the bottom of a firm’s website to read the small print and see how the firm is licensed. Blacktower is licensed by the Gibraltar Financial services Commission for both insurance mediation and investment advice. Why Gibraltar? Why not Spain? Gibraltar has a long history of facilitating and licensing scams and scammers and the Commission even employs one itself. The website claims to have “Consultants throughout our offices in Europe” – and this worries me. What is a “consultant”? Why not talk about advice, not consultancy?
Looking at the directors and “international financial advisers” of the firm, there are quite a few. Associate Director Tim Govaerts claims to be qualified with the Chartered Institute of Insurers up to Level 3. But the CII register says they’ve never heard of him. Richard Mills claims to be qualified with both the CII and the CISI, but both registers say they’ve never heard of him. Quentin Sellar claims to be qualified with both the CII and the CISI, but only the latter has heard of him. Clifford Knezovich also claims to be qualified with the CISI but does not appear on the register. Lucia Melgarejo is another member of the team who also claims to be qualified. I met her a few years ago, when a colleague of hers had cold called me, and she told me that she was too busy selling to get qualified.
The member of the Blacktower team which worries me the most is Terry Tunmore – as he was one of the scammers at Stephen Ward’s Premier Pension Solutions. Tunmore certainly soils the reputation of this firm, and should not be employed by any firm holding itself out to be professional and to have integrity.
Under the Licensing section of the website, the firm is immediately getting potential clients warmed up to insurance bonds and “wrappers” – and states that it has permission to recommend them and provide investment advice on the underlying portfolios. This should worry any potential client – and ring loud alarm bells – as this indicates a clear intention to use bond providers such as Quilter, SEB, Generali or RL360 – and earn hidden commissions. These products are deemed to be invalid under Spanish law, and are routinely sold illegally in Spain.
Blacktower’s website makes no mention (that I can find) of compliance or their professional indemnity insurance policy. It also worries me that Blacktower has so many “agents” – and without hard evidence of a robust compliance function, I think there is a risk that some of these agents could well be acting as unsupervised “feral” salesmen, rather than bona fide financial advisers.
Blevins Franks – Well-known firm with offices in Spain, and other European countries. The team in Spain all have titles such as Partner, Private Client Manager or Regional Manager – and there is no mention of any of them being genuine financial advisers. In Spain, Partners Christopher McCann, Brett Hanson, Paul Montague, Andrew Southgate, Henry Rutherford and David Bowern all claim to be qualified with the London Institute of Banking & Finance, but none of them appears on the member register. Steven Langford claims to be CII qualified but does not appear on the register. With so many members of the team claiming – falsely – to be qualified, this should ring loud alarm bells with any potential victims. We know that Blevins Franks routinely puts all clients into a Lombard insurance bond – which means they are committing a criminal offence in Spain.
Insurance bonds are illegal and invalid for the purpose of holding investments in Spain, and the usual manner of selling them is also a criminal offence. An insurance bond provides no benefits or protection for investors – and should never ever be used inside a pension (QROPS). Blevins Franks also has a close tie with Russell funds – and routinely invests their clients’ funds in Russell. There’s nothing bad about Russell – but there’s nothing good about them either. A portfolio should always be a well-spread mixture of funds from the whole market – not a narrow selection of investments from one provider. I can’t see any information on the Blevins Franks website about their professional indemnity insurance, compliance or commission policy. All in all, I think there are too many risks with this firm and it should be avoided.
Finance Spain – Patrick Macdonald – This firm comes high up the Google rankings, so obviously spends a lot of money on SEO and/or Google Ads. The “Regulation” bit on the website states the firm is “part of a group who are regulated by the Financial Services Commission in Gibraltar”. But which “group” is it talking about? There’s a link to the GFSC website, but no evidence as to how the firm is licensed. The website also claims to consist of “qualified and regulated international wealth managers and members of the Chartered Institute for securities and Investment (CISI) in the UK”. But who are these so-called wealth managers? The only one named on the website is Patrick Macdonald – and the CISI register shows him as being employed by Blacktower. But the firm Finance Spain does not appear on the GFSC register as being one of Blacktower’s agents – so how is this firm licensed?
What worries me most about this website is that it is openly flogging insurance bonds. It promotes “Spanish Portfolio Bonds” – which are routinely sold illegally by the scammers. It claims these bonds are a “tax beneficial home for investments”. But that isn’t true in Spain, as the so-called tax benefits only work for UK residents. In the “Wealth” section of the website, you are met with a brazen offer of insurance bonds from Prudential, Old Mutual and SEB. The section on pension transfers is also very worrying as it gives misleading comparisons between UK pension providers and EU-based QROPS providers; it fails to provide warnings against transferring final salary pensions and – worst of all – states “There is greater investment choice”. This so-called choice is what so many scammers in Spain (in the past ten years) have used to destroy victims’ pensions with high-risk, high-commission, unregulated investments such as structured notes.
Ironically, the Finance Spain website has a section called “Top 5 Warnings” about pension scams. It recognises that the industry is rife with scammers and warns about cold calling, cashing in pensions, pension reviews and the promise of high returns. But it ignores the fact that Finance Spain is itself heavily promoting insurance bonds – which have been the biggest single cause of pension scams in Spain in the past decade. With no clear information about licensing, compliance, insurance or commission policy – and no idea who the firm is or by whom it is managed – I think it is safe to say this is one to avoid.
Spectrum IFA – Oh dear, where to begin! There are so many alarm bells here, it’s like being inside a busy fire station. No investment license, but openly giving investment advice, and flogging insurance bonds: “efficient investing (using Insurance wrappers”. And that’s just the home page. The website openly boasts: “Our internationally qualified, professional advisers make certain you receive the best possible advice for the following areas: Investment Advice in Spain – Pension planning in Spain. That’s a bold claim to make for a firm with no investment license.
The website goes on to boast: “All our advisers live in Spain, are experienced and qualified.” But who are they? What are their qualifications? One “financial adviser” is Dennis Radford who claims to be qualified with the CISI – but does not appear on the register. Aside from lying about his qualifications, he is one of the former Continental Wealth Management scammers responsible for defrauding many victims out of their pensions and life savings. I have brought this to Spectrum’s attention before, but they obviously don’t care – as Radford brings in a lot of business and commission (on illegally-sold insurance bonds and high-risk, inappropriate investments).
There is one adviser who is qualified with the CII – John Hayward. I believe he is a decent bloke – so what on earth he is doing with Spectrum is beyond me. Spain may be full of inadequately licensed firms which do nothing but flog insurance bonds to victims who don’t need them and can’t afford them, but there are some (admittedly not many) decent firms he could join.
Abbey Wealth – This firm has been around a long time – flogging insurance bonds to unsuspecting victims. The firm was an agent of well-known scammers Inter Alliance – the “network” of which Continental Wealth Management was also a member. Abbey Wealth is now licensed by the Central Bank of Ireland. If you’ve ever wondered why so many firms like Ireland, it’s because regulation there is as flaccid as a marshmallow. Another reason why Quilter International is so active there with its insurance bonds – so beloved of so many pension scammers. Abbey boasts a flock of “advisers” who claim to be passionate about financial services – including Ben Noifield who states he is CII qualified (the CII register says otherwise). The rest of the sorry team are an assortment of unqualified salesmen masquerading as advisers.
No mention of professional indemnity insurance, and no reference to their murky past as part of the Inter Alliance shambles.
Alexander Peter – No information about if or how the firm is licensed; who the advisers are and whether they are qualified; who is in charge, what professional indemnity insurance they hold.
Harrison Brook – This firm claims to be a member of the Nexus Global network. But there is no access to the agency agreement and no link to any professional indemnity insurance details or information about who is in charge and who the “advisers” are (and whether any of them are qualified). The question also has to be asked: why don’t firms get their own license rather than joining a network? Ding dong!
Seagate Wealth – No information about how (or if) this firm is licensed. It states on the website: “We work in conjunction with fully regulated and authorised companies”. So presumably that’s an admittance that they are not regulated or authorised. There’s no information about who controls and is responsible for the firm, and nothing to state how any of the team members are qualified. Perhaps one of the biggest alarm bells about this lot is that they are mostly ex AES International and stole the Spanish client book back in 2015.
The recent awards given to Quilter Cheviot and Quilter International by International Adviser (sponsored by Quilter) must have sickened and disgusted many Quilter (OMI/Skandia) victims. Editor Kirsten Hastings’ saccharine and gushing words of praise will have been seen as offensive in the extreme by the thousands of victims who have lost their pensions and life savings in Quilter International death bonds.
While there were, indeed, some very decent firms given well-deserved awards for excellent service and innovation, the prizes handed out to the sponsors of the event were just plain wrong. International Adviser Editor Kirsten Hastings should hang her head in profound shame. She knows full well how many people have been ruined by Quilter. She knows Quilter’s victims are dying – and some have died. She is fully aware that many more are contemplating suicide and that most are facing a bleak Christmas and poverty for the rest of their lives. And yet she can still publicly praise a company which she is fully aware has facilitated investment fraud on a massive scale; congratulate them warmly, and smile broadly while cocking a coquettish nod at the distraught victims as she played canned applause.
I’m going to add an award which was conspicuous by its absence; an award for a brave and determined woman who stood up in the flaccid jurisdiction of Guernsey to a negligent pension trustee: FNB International. Home to many scams and scammers, Guernsey had for many years hosted pension scams – until eventually de-listed by HMRC. A well-known tax haven, Guernsey does have an ombudsman for financial services (albeit a weak and ineffective one) – but he refuses to hear any complaints about matters relating to the height of Guernsey’s disgraceful past.
The heroine so who richly deserves a medal is Manita Khuller – victim of Quilter International, FNB International Trustees and Professional Portfolio International. Between them, these three negligent and culpable parties conspired to cause the destruction of her two final salary pensions worth £330,000 ($430,921/€386,574). The Guernsey Court denied Ms Khuller’s original claim for restitution – and, at first, all seemed lost and it looked like the scammers were going to get away with it. But, unprepared to go down without a fight, Khuller sought an appeal based on the gross negligence of the unregulated adviser – Professional Portfolio International, which FNB had used while she was living in Thailand.
Roger Berry of Concept Trustees in Guernsey, commented on this: “The trustee sought to show that they could rely on the delegation to the adviser/manager to remove or qualify its duties as trustee and in any event, to be liable, the trustees had to be shown to have acted with gross negligence.”
Mr. Berry spoke from significant first-hand experience – as he himself had been accepting investment instructions from AES International’s Stephen Ward (of Premier Pension Solutions in Spain) in the high-risk and toxic EEA Life Settlements fund as far back as 2010. So, he knows all about the catastrophic consequences of accepting business from known serial scammers into obviously unsuitable investments. Berry is also familiar with the art of gross and grotesque negligence.
How she lost two guaranteed DB pensions with strong employer covenants
Why PPI continues to operate throughout Asia under MD Eric Jordan
Why Old Mutual and Skandia (now Quilter International) have yet again been found wrapping dodgy investments
How a South African and now UK bank is owning a Guernsey Trust in the first place
What Geoff Gavey, Alan Glen and co were doing at FNB international to claim “trusteeship”.
Perhaps, in years to come, people in the financial industry will discuss in hushed tones the epic and cautionary tale of Manita vs. Quilter.
But What has Quilter got to do with a Guernsey-based pension trustee who accepted unregulated investment advice into toxic, high-risk, unregulated funds – LM and Mansion Student Accommodation?”
The answer is, of course, EVERYTHING. A Quilter insurance bond should never have been used in a QROPS at all in the first place – and was only there in order to provide scammers posing as independent financial advisers with hefty, undisclosed commissions.
This case was about FNB International, the guilty QROPS trustee who facilitated this scam. But, of course, this firm did not act alone. As in all the thousands of similar cases, the main protagonists started with the rogue advisory firm and ended with the rogue life (or, rather, death) office – in this case Quilter International. But similar cases involving this type of pension investment fraud involve SEB, Generali, FPI and RL360.
Manita Khuller was advised to transfer her defined-benefit pensions by Professional Portfolio International, an unlicensed advisory firm based in Bangkok – where she was living at the time – into the Plaiderie QROPS. Of course, the reality was that her pensions should never have been transferred at all and would have been much better left where they were – safe in the hands of professionals and far away from the grubby paws of unlicensed scammers posing as financial advisers.
Then, going down the well-trodden path of traditional pension and investment scams, PPI put their victim’s fund into a death bond for their undisclosed 7% or 8% commission, and then invested it entirely in high-risk, toxic, unregulated funds for further huge, undisclosed commissions. None of these three phases of the scam should ever happened: not the transfer out of her final salary pension scheme; not the purchase of the unnecessary, inflexible and expensive death bond; not the risky, inappropriate investments. But Quilter International facilitated it all – rewarding the scammers at PPI handsomely (as they do with so many unregulated scammers across the globe).
Professional Portfolio International – run by Eric Jordan and Colin Bloodworth – claim, on their website, to: “strive to help each client grow, protect and enjoy their wealth”. But this, of course, is completely untrue. If they had their clients’ interests at heart, they wouldn’t have put Manita Khuller into a Quilter International bond in the first place; and they wouldn’t have invested her precious pension in high risk toxic crap in the second place. Their only motivation was, of course, their own fat commissions.
Jordan and Bloodworth claim to have a “very knowledgeable and suitably qualified team of experienced advisers”. But this is clearly untrue – as any qualified adviser would know that an insurance bond serves no purpose inside a pension wrapper and wouldn’t be seen dead advising a valued client to invest in worthless rubbish such as LM and Mansion.
Jordan and Bloodworth’s website goes on to boast that “PPI is able to deliver the highest level of progressive financial planning and wealth management services”. And yet, it is clear this is not only a black lie, but that “planning and service” are the furthest things from their minds. The only things they care about, obviously, are fat commissions and conning victims like Manita Khuller out of their pensions and life savings.
So, Manita Khuller was failed and scammed by three parties:
Rogue advisory firm Professional Portfolio International in Bangkok – run by Eric Jordan in Thailand and Colin Bloodworth in Indonesia
Rogue QROPS trustee FNB International in Guernsey
Rogue death office Quilter International (previously Old Mutual International/Royal Skandia)
Manita Khuller – like thousands of other victims of Quilter International, QROPS trustees and unlicensed advisers – was a low-risk, retail investor – as is anyone investing a pension fund. But more than half of her pension – around £170,000 – was put into LM Managed Performance Fund, run by Australian-based LM Investment Management. This company is now in administration. Another big chunk was put into the Mansion Student Accommodation Fund which is now in liquidation.
Almost a third of her money had been invested in the Mansion Student Accommodation fund, and due to the fund’s liquidation her money had been frozen without her being able to access it at all. Speaking to This is Money, Manita commented:
And that, in a nutshell, is the crux of the situation. Quilter are far too willing to give terms of business to unlicensed scammers – with no relevant qualifications or regulations in place to ensure their professional obligations are not compromised by greed, lies and disloyalty. Quilter have been doing this for years now – and have made a fortune out of the sales of their expensive, unnecessary death bonds. They have perpetuated the myth for years that firms with only an insurance license (or even no license at all) can “advise” on investments as long as they flog their victims a death bond and then “pick” from the toxic investments on the death bond provider’s platform – obviously always choosing the investments that pay them the highest commissions (like LM and Mansion).
So here is the award that Kirsten Hastings of International Adviser should have given:
INTERNATIONAL CHALLENGER OF PENSION SCAMS
(especially those facilitated by Quilter International)
Recent data obtained by Quilter (formerly Old Mutual International and Royal Skandia) under a freedom of information request has further highlighted the issue of financial education, or rather the lack of it, with many casualties of fraud ‘unaware they may have fallen victim‘ to such a scheme.
The time has come to call out the thieves in their midst!
Scams, and the lack of an active regulator in place to ensure their non-proliferation, undermine the reputation of the industry itself – and of any decent advisers out there.
The supposed altruism behind the actions of Quilter, who have seen the story of their plucky attempt at standing up for the little guy circulated by almost every major financial publication available in the UK, and by a fair few online and overseas English-language webpages/articles besides, is questionable at the very best – and a downright attempt at pulling the famous ‘Kansas City Shuffle‘ (when everybody looks right, you go left) at worst. I would like to use this opportunity to call “bull-“, as I believe I have heard my American friends say when faced with a claim that is clearly one of the more than 50 shades of bovine excrement currently available from all major stockers of the substance.
Quilter has, in the past ten years, facilitated hundreds of millions of pounds’ worth of pension scams with their “fertilizer”-based products.
It seems that almost every shady offshore firm has been taking advantage of Quilter and other life offices just like them being asleep at the wheel, with hordes of unlicensed investment firms popping up with increasing frequency and success in virtually every expat jurisdiction (especially Spain: e.g. Darren Kirby and Jody Smart at Continental Wealth Management).
Quilter are (at least partially) to blame. The well-known asset management company’s lack of responsibility when it comes to selling inappropriate products to any suitor who comes a-calling is – at this point – bordering on criminal negligence. (And that’s if you remove the border…)
Quilter are fully aware that the statistics they’ve obtained (£30,857,329lost to UK pension scams since 2017) are downright misleading. They fall woefully short of demonstrating even the losses incurred by their own (Quilter’s) facilitation of financial crime in recent years generally – and the last three years particularly.
Yet when it comes to financial fraud and investment scams (particularly those that involve unsuspecting clients’ pension pots), there is almost no pre-emptive warning given to the public, except for massively underestimated figures produced by the very people who have been clearing the way for the scammers from day one. And by that, I do – of course – mean the life offices (like Quilter/OMI) themselves.
“Pension scams and other investment frauds are extremely complex, they can span multiple jurisdictions, and can often go uncovered for years before the victim realises their money is gone. This all makes investigating the scams incredibly time-consuming and expensive, which is why the police have to prioritise those few cases where they have a chance of success.
“The government has a perfect opportunity to bring the regulation into the 21st century by including financial harms within scope of the forthcoming Online Harms Bill. This will mean that, for the first time, search engines and social media platforms will be bound by a statutory duty of care to tackle harm caused as a result of content or activity on their services.”
As you can see Mr. Greer, and by association Quilter, talk a good fight and hit on almost every relevant point a consumer would want to hear from a company of their standing and stature within the financial industry; projecting themselves as a shining light – pouring their beacon out over the surrounding landscape and frightening any existing/would-be scammers out from their hiding places, while at the same time calling on the government for harsher penalties and swifter action to be taken (measures which Quilter themselves, and companies just like them, have blocked on numerous occasions).
And all this “bright light-shining” has served its purpose: leaving regulators, government and public alike too dazzled to notice the wrongdoing going on behind the source of the so-called light and within Quilter‘s very own doorstep!”
The grim reality is substantially different from the one that Quilter aim to project for themselves. That being said, it makes my reply to J. Greer’s well put comments even easier:
“Actions speak louder than words, and all we’re hearing is a deafening silence. If you truly believe the message your company has spent tens, if not hundreds, of thousands of pounds to tell us – by buying article space from any major financial publication that would have you, and getting them to run the story you wanted to put out there.
Covid 19 is having a terrible effect on millions of people across the globe. All walks of life are being affected. One important aspect of life in general is that of investments – life savings and pensions in particular.
Fraudsters are now using the Covid 19 pandemic as a weapon to encourage investors to fall for investment scams. The tactics used are similar to those deployed as scare tactics over Brexit:
“get your pensions out of the UK so you have more investment choice and control”
(What the scammers meant by this, of course, was that they would have choice and control – and fat commissions. The victims would just have less money).
There are many lessons to be learned from the pandemic – including the way different countries have dealt with lockdown procedures. But the lesson I want to examine, in parallel, is how governments deal with pension and investment fraud.
We’ve now seen that laws can be changed swiftly when there is an international crisis threatening millions of lives. Yet, for more than a decade, pension and investment scams have threatened even more lives, while laws and regulations have barely budged. Police can jump into action when a couple of people take a stroll in the park without observing social distancing laws, yet armies of scammers steal of millions of pounds from thousands of victims, and nobody in a police uniform lifts a finger.
The Covid 19 crisis will inevitably contribute to the effects of inappropriate investments – which teeter on the narrow verge between mis-selling and fraud. Where commission is king and investments have been chosen purely for the hidden (from the consumer) introduction revenue, the effects of this will now be felt acutely by many victims.
It has long been deeply frustrating that so many scammers can offend repeatedly – often for years on end – without any sanction. Victims of pension scams such as Ark, Capita Oak, Henley, Westminster, Evergreen, London Quantum, Fast Pensions and Continental Wealth Management have lost their pensions to the same scammers over a seven-year period.
Regulators, police and government ministers have taken not a bit of notice other than sometimes handing the pension schemes over to Dalriada Trustees – who also fail to report the blindingly-obvious frauds to the police authorities.
Mind you, I have some (limited) sympathy with Dalriada. They obviously know it is a complete waste of their precious (and very expensive) time reporting the scammers. Dalriada clearly knows full well that the Police, Insolvency Service and Serious Fraud Office are worse than useless.
Behind this failed law-enforcement network lies an even bigger scam: Action Fraud. This is a cynical effort to fool scam victims into believing that some action will be taken when fraud takes place. However, the reality is that Action Fraud is just a call centre which deliberately ignores the desperate pleas for help by fraud victims. In fact, the Action Fraud call centres are no different in nature than the boiler-room cold calling centres used by the scammers – the purpose is the same: to deceive victims.
We have now seen the hard evidence that whole continents can jump into radical action when necessary. So there is no longer any excuse for allowing the pension and investment scam pandemic to continue unchallenged.
Every country – especially ones where lots of British expats live – needs to recognise that pension and investment scams are – and always have been – a global pandemic. The apathy and laziness of regulators, law enforcement agencies and governments need to cease. And Britain’s shameful, embarrassing track record of ignoring – and even facilitating – scams needs to be reformed.
The early signs of a wind of change in the pension and investment scamming world are there. Spain and New Zealand are now actively progressing criminal proceedings against scammers. There are early signs that other jurisdictions are starting to wake up as well.
The scammers at Premier Pension Solutions and Continental Wealth Management are facing fraud and falsification charges in Spain.
The SFO in New Zealand is investigating the scammers in the $100m Penrich Macro Global investment fraud which was also linked to the Evergreen QROPS scam (run by Stephen Ward and promoted by Continental Wealth Management).
STM Fidecs in Gibraltar has issued a claim against thirteen defendants for the return of “misappropriated” money in the Trafalgar Multi Asset Fund case (also under investigation by the British SFO).
Police in the Cayman Islands are investigating a fraudulent investment company – and has warned potential investors into any companies in Cayman to carry out proper research and due diligence
The Isle of Man courts are preparing for a raft of civil proceedings against leading life offices which have facilitated financial crime on a massive scale internationally.
The Hong Kong fraud squad is taking a keen interest in the GFS Blackmore Global pension/investment scam.
Back home in the UK, there are serious complaints being filed against HMRC and the Pensions Regulator for facilitating pension scams and failing to warn the public. And a growing body of victims and professionals is looking at bringing the FCA to justice for their multiple failures.
Even if the tide is beginning to turn, it is – of course – way too late for thousands of victims whose lives have already been ruined by the scammers. Just as Covid 19 has killed hundreds of thousands of victims in just a few months, pension and investment scams have ruined hundreds of thousands of hard-working victims’ lives in the past decade.
While more than 200 countries are fighting against the spread of Coronavirus and trying to save the 300,000+ people who are sick, we now need key financial services jurisdictions to take the pension and investment scam pandemic seriously.
Renowned English Author James Hadley Chase once famously wrote:
“It’s better to be sick of life than not have a life”.
Pension and scam victims are not just sick of life, but they are also sick of the lack of action by authorities internationally – but above all in Britain. Let’s hope that current actions in place in Spain, Gibraltar, Cayman Islands, Isle of Man, Hong Kong and New Zealand will be replicated as swiftly and effectively as the Covid 19 protection measures.
On July 18th 2017, Slater and Gordon Lawyers wrote me the below email. Lawyer Steve Kuncewicz clearly stated that Slater and Gordon acted for their client: Blackmore Global PCC Limited; Phillip Nunn and Patrick McCreesh. The full transcript is below – complete with my comments in bold. This is a 25-page document, so I don’t expect most people (except the most tenacious and determined) to read all of it. So I have put the basic highlights below.
It is clear that Slater and Gordon was a poacher back in July 2017 when the firm represented clients Blackmore, Nunn and McCreesh. And now in 2020, Slater and Gordon, is an even bigger poacher as it attempts to profit from the losses suffered by Blackmore Bond victims.
As Bond Review reported yesterday that the FCA knew all about the doomed Blackmore Bond three years ago, it is clear that Blackmore’s own lawyers – Slater and Gordon – also knew what Nunn and McCreesh were up to at the same time, but did not report their clients to the authorities as they should have done (not that it would have done any good). But both the FCA and Slater and Gordon could have prevented the Blackmore Bond tragedy and saved hundreds of victims from losing their life savings.
Meanwhile, Slater and Gordon is now advertising all over social media:
We’re investigating how to protect bondholders interests following the administration of Blackmore Bonds Plc.
Slater and Gordon is also denying that Blackmore, Nunn and McCreesh were ever their clients. Slater and Gordon is now trying to attract clients by promising:
“We’re keen to assist investors and help them understand their position. We’re investigating if any steps can be taken to protect their interest in the funds within Blackmore’s mini-bond schemes, following the administration of Blackmore Bonds Plc. These schemes promised a high rate of return to investors but continually failed to pay-out. If you invested in mini-bonds or an ISA through Blackmore, we’re keen to speak with you. “
Although the communication with Slater and Gordon is more about the Blackmore Global Fund scam than the mini-bond, it does cover a number of crucial issues including:
Slater and Gordon confirmed that they acted for their clients: Blackmore, Nunn and McCreesh in both a ” business and personal capacity “
Slater and Gordon was trying to shut me up so that their clients could keep scamming hundreds of victims out of their pensions and life savings
Slater and Gordon was falsely portraying their client as: “a prestigious, multi-asset investment house with over £60 million in assets under management, offering institutional and high net-worth clients access to a wide variety of investment products in order to maximise their returns”. This was completely false as Blackmore only targeted retail investors with small pension pots or personal savings – with their entirely unsuitable, illiquid, high-risk investments
Slater and Gordon claimed: “The Blackmore Group was founded on the core belief of putting the needs of its clients first, developing diverse portfolios backed by real assets containing a blend of capital growth and fixed income”. This is nonsense: Blackmore worked closely with known, serial scammers to promote their products and target naive, vulnerable victims. They locked pension savers into their fund scam for ten years without their knowledge and they spent the bondholders’ money on huge amounts of promotion fees (e.g. Surge Group) and commissions for the scammers who helped distribute their toxic wares.
But most serious of all is this next point:
5. Your only intention can be to divert business from them and to cause serious financial harm as a result.
I replied: “I have no interest in causing your clients financial harm – why would I? But I do think that vulnerable pension savers have a right to know the background of the people behind a fund which is being promoted to retail, UK-resident investors.”
A lot of the Blackmore Bond victims invested AFTER this letter. Slater and Gordon did NOTHING to warn the public about their client. All they did was to try to shut me up and prevent me from warning the public.
And now they want to make money out of the Blackmore Bond victims? Seriously?
Slater
Gordon
Lawyers
18 July 2017
URGENT
— IF YOU DO NOT RESPOND TO THIS CORRESPONDENCE, COURT
PROCEEDINGS MAY BE ISSUED AGAINST YOU WITHOUT FURTHER NOTICE
Ms Brooks t/a
Pension-Life.com
24 Calle Cuatro
Esquinas
Lanjaron
18420,
Granada
SPAIN
58 Mosley Street
Manchester
M2 3HZ
DX 14340
Manchester 1
Tel: 0161 383
3500 Fax: 0161 383 3636
wwwslatergordon.co.uk
Your Contact:
Steve Kuncewicz Assistant: Rebecca Young
Direct Tel:
01613833708
Email:
Steve.Kuncewicz@slatergordon.co.uk
Your Ref:
Our
Ref: RZY03/UM1389098
Our Clients: Blackmore Global PCC Limited, Philip Nunn and Patrick McCreesh Proposed Claim for Defamation and Malicious Falsehood
We act for the aforementioned clients in their business and personal capacity and have been instructed to contact you in relation to various untrue, defamatory and wholly unjustifiable allegations published on your website at httq://pension-life.com (the Website) relating to our clients, their products and services which are designed to (and in fact already have, as set out below) damage their respective reputations and financial interests.
Our client, Blackmore Global PCC Limited, is part of the Blackmore Group which is a prestigious, multi-asset investment house with over £60 million in assets under management, offering institutional and high net-worth clients access to a wide variety of investment products in order to maximise their returns.
If it is indeed true that Blackmore Group is a prestigious organisation, then I have no doubt the directors will be keen to ensure that the damage done to victims’ pensions is put right and that Blackmore’s purported “good name” is protected. However, when you Google Blackmore Group PCC nothing comes up about it being “prestigious” – but what does come up is a link to one of Offshore Alert’s warnings regarding Brian Weal – – and as you know at least one of the underlying assets was run by Weal.
Further, there are cautionary warnings on the Money Saving Expert forum which mentions that investors were given a “pension review” by Aspinal Chase (run by your clients) and promised 10% returns p.a.There is absolutely nothing available on Google which describes Blackmore Global as “prestigious”.
Further, the clients are not high
net-worth, under the FCA definition. Are you aware of the FCA
definition of “High net-worth”? Your clients, with 25 years’
experience, will know this. Just to remind you, a high net-worth
client, according to the FCA has-
an
annual income to
the value of £100,000
or more.
Annual income for these purposes does not include money withdrawn
from pension savings (except where the withdrawals are used directly
for income in retirement).
net assets to
the value of £250,000
or more.
The definition specifically excludes
pension savings. Yet, your clients are involved in the marketing,
processing and investing of retail pensions of those that are not
high net-worth clients. I would be interested to see if ANY
sophisticated or institutional investors are in the Blackmore Global
Funds. Surely, such experienced investors would demand audited
accounts.
“The Blackmore Group was founded on the core belief of putting the needs of its clients first, developing diverse portfolios backed by real assets containing a blend of capital growth and fixed income.” (Steve Kuncewicz of Slater and Gordon – 18.7.2017)
If the assets
are “real” – tell us what they are. Do you even know what they
are? Have you seen an independent audit or are you relying solely on
what your client is telling you?
Blackmore Global
PCC Limited offers a medium to long-term investment vehicle for its
clients with a diversified investment portfolio under one structure
which allocates investment between four distinct protected cells
which diversify assets between property, sustainable energy, private
equity and lifestyle. In order to take advantage of as wide a range
of investments as possible, it invests in a number of vehicles
including funds, companies, joint venture projects and equities.
I know all about
the cells as they are described in the factsheet and brochure.
However, based on the fact that we know some of the information
contained therein is untrue, I am not sure the cell information can
necessarily be relied on. What we really need to know is exactly
what the assets are. Steve, I mean no disrespect but your letter
contains 21,290 words – and not one word about what the assets
really are. You seem to be trying to claim your clients have done
nothing wrong – but you are providing no evidence.
Further, among
those many words, you refer to loss suffered by your clients multiple
times, but you never once refer to the considerable loss and distress
suffered by the Blackmore Global investors (or indeed the Capita Oak
and Henley ones).
Patrick McCreesh
and Philip Nunn founded the Blackmore Group (of which Blackmore
Global PCC forms part) in 2013,
That would be
just after the Capita Oak and Henley scams, which Nunn and McCreesh
were promoting, collapsed.
and jointly have
more than 25 years’ experience in the financial services sector,
growing their business to the extent of it having over £17m of
assets under management across multiple asset classes.
With
respect, if they have jointly more than 25 years’ experience in the
financial services sector, they should know that their fund is not
suitable for pension schemes – just as they should have known that
empty boxes (store pods) were not suitable investments for the Capita
Oak and Henley victims. And
I sincerely hope that (apart from the victims of which I am aware)
none of the remaining £17m represents pension investments.
By contrast, the
Website describes your activities as follows:
“Depending
on the type of pension or investment scam a victim has been involved
in, there are various things we can do to help. We charge annual
membership fees so that members know exactly what they will have to
pay and there will be no legal or accountancy fees on top.
Deal with
trustees, advisers and fund managers
Complain to
regulators and ombudsmen
Appeal tax
liabilities with HMRC and the Tax Tribunals
Analyse and
quantify investments, losses and fees/commissions
Instruct
solicitors to
make
a claim against negligent parties to obtain redress for losses and
liabilities (paid for by litigation funding)”
Am not sure what
the point is that you are trying to make here. You have used the
phrase “by contrast” which to me suggests you are trying to
ascertain that, unlike your clients, I have never been involved in
running or promoting a pension or investment scam. Which, of course,
I haven’t. Indeed, I vigorously oppose such crimes and am working
with the regulators, police and ombudsmen to help stamp out such
activities and bring those responsible to justice.
Notably, you refer
to yourself as “one
of the leading experts on pension liberation scams”.
Indeed, I am
widely acknowledged as such. Further, in your above statements, you
have now correctly identified the following problems associated with
Blackmore Global:
Problem no. 1: the victims were
neither “institutional” nor “high net-worth”. They should
never have had their pensions invested in the Blackmore Global fund
at all.
Problem no.2: you have said Blackmore
develops “diverse portfolios backed by real assets”. So what
are these “real” assets? Do you even know? Has Blackmore ever
told you or shown you proof? Because they won’t tell the victims
what the assets are. Nor will they tell the pension trustees.
Problem no. 3: Blackmore Global
offers a “medium to long-term investment vehicle”. So, not
suitable for pensions then. Members of a pension scheme have a
statutory right to a transfer as well as to be able to reach the age
of 55, or retire or die, so there must be liquidity. Also, at least
one victim was close to retirement age when he entered the scheme so
he should never have been put into long-term investments.
Problem no. 4: Blackmore Global has
£17m worth of assets – if these are all members of pension
schemes such as the victims who are members of the Pension Life
Group Action, then there is a very serious problem indeed for your
clients.
You
refer to my activities and expertise on pension liberation scams –
if you need any clarification or corroboration of this I am sure your
colleague Craig will be happy to fill you in.
The Website
contains a number of posts which refer, either directly or
indirectly, to our clients, specifically:
“Action Fraud
are nobody and have no authority”: John Ferguson, Square Mile
Financial Services: November 30, 2016;
Government
Consultation on Pension and Investment Scams (The Square Mile):
December 5, 2016;
“Scammers Are
Criminals” : April 11, 2017;
“Gambling
With Your Pension”: May 14, 2017;
“Serious
Fraud Office Requests Pension And Investment Scam Reports” :
May 24, 2017; and
“Blackmore
Global Fund — Asset Or Black Hole?”: July 7, 2017
Copies of these
posts are attached to this letter marked Annex 1.
The content of
these various posts (and the content of various other social media
posts and other direct communications with third-party professional
intermediaries who refer work and clients to our clients, which will
be adduced in evidence in due course), led our clients to write to
you on January 17 this year to put you on notice of their objection
to your various claims.
Forgive me, but
I am not sure what point
you are making. Ferguson did indeed write to a victim and state that
“Action Fraud are nobody and have no authority”. He even copied
in his lawyer to this. There was indeed a government consultation on
pension and investment scams. Scammers are indeed criminals (as
confirmed by
the Pensions Regulator). Gambling with your pension is not
advisable. The Serious Fraud Office has indeed requested reports on
a number of pension scams – some of which your clients were
involved with. Finally, we don’t know whether Blackmore Global is
an asset or a black hole because there is no independent audit.
Until and unless the long-awaited audit is forthcoming, the jury will
have to remain out on that.
As our clients
summarised, borne out by the contents of the Website, you purport to
act in a professional capacity for individuals who are beneficiaries
of trusts or pension schemes, who have been advised by independent
financial advisers (including, without limitation, Square Mile, who
are also referred to at various points in the posts referred to
above) to transfer some or all of their existing pension funds to the
Optimus Pension Scheme using an Investor Trust Wrapper.
As I am sure you
will realise, Slater and Gordon already did comprehensive due
diligence on me and the Group Actions several years ago, so there is
no need to “purport” – just ask Craig McAdam.
As our clients
stated, they understand that some of these individuals may have
invested certain of their pension fund assets into underlying
investments which may
include investments managed by our client. As you will be well aware
our client as an investment house has never, nor would they, ever
deal directly with any of your “clients”
as
beneficiaries.
I have never
said Blackmore Global (of which Messrs Nunn and McCreesh are
directors) did deal direct with the investors. However, they do run
a cold calling/lead generation business called Aspinal Chase which
dealt direct with the clients. See below the details of the Aspinal
Chase website:
I am not sure you understand how this
unpleasant, calculated and deliberate targeting of unsophisticated
retail pensions operated. Let me spell it out for you.
Your clients (again I refer to the
individuals – as I they cannot hide behind the corporate entity)
had websites offering pension reviews and cold-called members of the
public. Those that agreed to a review were introduced to what they
believed was an IFA (and IFA has a duty to look at the whole market
and act in the clients’ best interests). The “IFA” then
assessed the client’s needs and objectives and recommended
Blackmore Global. Then, your clients dealt with the processing of the
transfer from the ceding trustees into a pension and their own funds.
At no time was the client ever informed of the conflict of interest.
There was never an intention to provide the client with a pension
review, it was just a calculated ruse by your clients to get their
hands on the pension funds of gullible members of the public.
So effectively,
your clients were generating leads and introducing people to their
own fund via Aspinal Chase.
It is further evidenced that Messrs
Nunn and McCreesh’s firm Pension & Life were acting as pension
transfer administrators for the victims who were subsequently
invested in the Blackmore Global fund:
“Subject – Transfer from: Unisys
Pension Scheme Member name: Mr A B C Driver: Our reference: Transfer
Out – 9999999 Your reference: B00047 We have been advised by Pension
& Life UK Ltd to proceed with the transfer of this member’s
benefits from Unisys Pension Scheme to Optimus Retirement Benefit
Scheme No 1. We can confirm that the member has received appropriate
independent advice in respect of the transfer to the receiving
arrangement. The total transfer value amounts to £4xx,xxx.xx and has
been paid direct to your bank account.”
Please note, that your clients – in
their role as transfer administrators Pension & Life –
confirmed to the ceding provider that Mr. Driver had “received
appropriate independent advice”. However, with their 25 years’
experience Messrs Nunn and McCreesh should have known full well that
the advice had come from a firm which was not regulated for pension
and investment advice.
We now direct our
and your attention (to the extent that you were not fully aware of
their content, which we doubt), to the specific posts on your
Website, and how the same are both untrue and seriously defamatory of
our clients.
I am not sure
what you mean by this statement – how could I not be aware of the
content of the blogs on my website? I wrote them all personally.
Not a single one is untrue.
Below, in
accordance with the Pre-Action Protocol, we set out what we consider
to be the defamatory comments (Defamatory Comments)
“Action Fraud
are nobody and have no authority”: John Ferguson, Square Mile
Financial Services
And what is your
point? John Ferguson wrote this statement. I didn’t write it –
I only quoted it. There is nothing defamatory about repeating this –
it is a clearly evidenced fact.
The above post
contains the following statements:
“Mr.
Ferguson has invested a number of victims’ pensions in the Blackmore
Global and Symphony funds and was asked to provide a copy of the
audit for Blackmore Global which his firm has been promoting and
which appears to have some questionable assets — described as
“esoteric” and “alternative”. He was also asked
to provide evidence of his firm’s regulation to provide pension and
investment advice.”
Again, I am not
sure what your problem is with this – it is perfectly true and
clearly evidenced that Ferguson (and other unregulated advisers) have
indeed invested victims’ pensions in Blackmore Global. The assets
of the fund are indeed questionable – and will remain so until the
audit is produced. The fund is invested in esoteric and alternative
assets. Ferguson has been asked to provide evidence of his firm’s
regulation to provide pension and investment advice on several
occasions but he has never done so.
“One victim
had threatened to report the matter to Action Fraud when he
discovered multiple irregularities with his pension scheme”
Again, this is
perfectly true – and evidenced.
“The
factsheet for the Blackmore Global fund had falsely claimed a firm in
Barcelona was the Investment Manager for the fund — robustly denied
by the furious firm in question.”
And? Both the
factsheet and the brochure stated this – falsely.
Meaning
On any
consideration of the above two paragraphs, this post is intended to
cause damage to Blackmore Global PCC Ltd’s reputation and its
business by suggesting that our client’s underlying assets into which
funds are invested are “questionable”.
The questions
are “where is the audit” and “what are the assets”? There
was no intention to cause damage to anyone’s reputation and
business – but every intention to discover what the assets are.
There is compelling evidence that the assets are linked to very
suspicious investments and people with a track record of dealing in
investment scams. In fact, if you were genuinely interested in
protecting your clients’ reputation and good name, you would simply
send me a statement confirming what the assets are. The very fact
that you haven’t suggests you don’t know and your clients haven’t
told you. So how can you refute that the assets are questionable?
The natural and
ordinary meaning attached to the suggestion that an investment is
“questionable”
is
that it is disreputable, uncertain as to its credibility or validity,
and generally morally suspect. You seek to further compound the
damage to our client’s reputation by describing the assets as
“alternative”
and
“esoteric”.
For a pension
saver, the investment is indeed questionable. And the evidence is
that the assets are alternative and esoteric – and there is nothing
to prove otherwise. If you can prove that the fund is not
disreputable, I will happily apologise. But even if it turns out
that the underlying assets are low-risk, prudent, diverse and
suitable for pensions, the fact that there is a ten-year lock-in
precludes the fund from being suitable for pensions.
Even more
seriously, however, this post makes the most serious of defamatory
allegations in that it alleges that our client is involved in
investments which should be (reported?)
to the police, via Action Fraud, and that our client is therefore
engaged in unlawful, criminal activity.
Your client was
indeed engaged in unlawful, criminal activity in the Capita Oak and
Henley schemes as well as various SIPPS invested in Store First. I
cannot comment further on this because the matter is now in the hands
of the Serious Fraud Office.
Please
be clear that my motive and intention was not to cause damage to
Blackmore Global’s reputation, but to get the victims disinvested
as quickly as possible and further to warn the public that they too
might be in danger of being similarly invested in this fund by
unregulated “Chiringuitos”. The distress caused to the victims
who are invested in Blackmore Global has already been appalling and
as a solicitor you too have a duty to help protect the public.
You
have claimed I intended to cause damage by stating that the fund’s
underlying assets are “questionable”. So what are they? Prove
they are not questionable – of course you can’t, because there is
no audit. The audit was promised last summer, then xmas, then
Easter. Either Grant Thornton can’t find the assets or somebody
doesn’t want the audit made public because of what it will reveal.
You go on to state
that our client has produced Factsheets containing “false
information”. This
is strongly rejected by our client. Our client’s investments, and
their underlying asset classes, are wholly reputable and completely
transparent to investors.
I am sorry but
this is absolute nonsense. The factsheet did contain false
information. The investments and underlying assets are not at all
transparent – there has been no audit and your clients won’t tell
anybody what they are. And to be fair, you keep going on about the
assets, but you won’t say what they are – so you are being just
as opaque as your clients. We know what the asset classes are –
and the explanation of the sub classes are horrendous as they contain
all the usual asset types so beloved by investment scammers (gaming,
spread betting, wine, waste to energy etc.). One victim has written:
“All
I can offer, is to reiterate, that I have no recollection of any
correspondence with an IFA prior to signing up with Harbour Pensions
and Blackmore Global. It was always, Aspinal Chase and in particular
Marc Rees. He told me what a great move it all was, how it made sense
to have all my individual pension funds in one place, that having a
fund of over £250k, I’d get a personal manager that would work
specifically on my fund and keep me regularly updated. Needless to
say this never happened. In addition, Marc told me that investing in
Malta, with Harbour, would give me better returns and be tax
efficient. I took this all as “advice”. Only after a
few years, when I wasn’t getting updates and I had to ask for them,
and I asked him some questions about surrendering, did he say that
was bordering on advice which he wasn’t qualified to answer, and my
IFA, David Vilka, would contact me. He never did. I badgered Harbour
Pensions and got fobbed off. Then Vilka emailed me to say he
understood I was in discussion with Harbour Pension and he couldn’t
do anything more than what I was doing myself.”
Marc Rees- a name familiar to your
clients as he worked for them.
Go
to individuals and click on Previous Involvement…
It is correct to
describe the underlying asset classes as “alternative”
in
that they are not what would otherwise be classified as “mainstream”
investments
such as gilts or shares in publicly listed companies. Investments
into property or renewable energy sources are considered
“alternative”.
However,
the manner in which you seek to adopt this term is to the detriment
of our client by implying that the asset classes themselves are
irregular. An investment is “alternative”
where
it departs from the norm. Therefore, the threshold by which an
investment could be determined as “alternative”
is
low.
You are mixing
apples and oranges: asset classes
are one thing; actual assets are another thing. But again, I come
back to the simple resolution to this debate: provide me with a list
of the underlying assets and then we can put this issue to bed once
and for all. In fact, it is interesting to note that you have never
once stated what the assets are and I have to assume you simply don’t
know as your clients have not disclosed them to you.
I think we should get comment from
professional qualified advisers and actuaries to see if they think
the funds are irregular for retail pensions. I will happily be guided
by them on this matter. Remind me, what qualifications do your
clients hold that would prove they are competent to run such a fund?
We already know one of their colleagues, Brian Weal, was found to be
incompetent.
It is further
correct to describe the investments as being “esoteric,”
that
is, out of the ordinary and traditional model of investments. It is
common for investment portfolios to have an element of “esoteric”
asset
classes, as part of a wider diversification of assets and potentially
offering the higher returns that investors require to achieve their
objectives, based upon the input of independent financial advisers.
However, you seek to adopt this term, which you will be well placed
to understand as being regularly used within the media in a negative
sense, whilst referring to alleged “victims”
of
our client’s allegedly unlawful behaviour, as referred to above. It
is used frequently in a negative sense by the media and other
professionals within the context of financial services, hence why you
have chosen to do so.
I am afraid I
would have to correct you on the assertion that it is common for an
element of esoteric asset classes to be used as part of an investment
portfolio for
pensions.
Perhaps for sophisticated investors or HNW individuals who like a
bit of risk – but not pensions. The term “esoteric” is indeed
frequently used by the media in a negative sense – and there is a
good reason for that: many of the failed funds which have destroyed
victims’ life savings have been invested in esoteric assets.
You cannot possibly believe or claim
that alternative and esoteric assets are suitable for pensions. Why
not provide me with a definitive list of the assets and then we can
debate this properly. You must surely know that funds for pensions
must, by definition, be low-risk, liquid, prudent and diverse –
which Blackmore Global clearly is not.
To clarify the
position in regards to our client’s Factsheet, our client’s
investment manager in relation to the background to which this post
refers was one Gerald Rodriguez, who formerly operated the firm IIG
Financial Services before moving under the banner of Meriden Capital.
Mr. Rodriguez is no longer responsible for the management of this
fund.
I
did indeed state that your client has produced Factsheets containing
“false information”. This is true and clearly evidenced by both
the Blackmore Global factsheet and brochure. Both documents claim
that the Investment Manager for the fund is Meriden Capital Partners
in Barcelona. But the directors of Meriden state they have never
heard of Nunn, McCreesh, Ferguson or Vilka – or indeed Blackmore
Global. However, when I jogged their memory that they had actually
completed an application form to become the Investment Manager, their
English suddenly got worse. But they still insisted they had never
been the Investment Manager to the fund as they were not regulated to
carry out such a task.
Your
explanation about Gerald Rodriguez of IIG Financial Services being
the Investment Manager is, I am afraid, mistaken. I called Mr.
Rodriguez (19th
July) who now works for the Gibraltar International Bank. He
confirmed that he did once work for IIG but that it was many years
ago. He also confirmed that he had never been the investment manager
for Blackmore Global – indeed he had never even heard of it – and
that he had never worked for Meriden Capital Partners. Perhaps you
should ask your clients to conjure up another answer to that one.
2. Government
Consultation on Pension and Investment Scams (The Square Mile)
We direct your
attention to the entire blog posting at Annex 1, and below we set out
the extracts which are most concerning, and defamatory, to our
client.
“Blackmore
Global was full of toxic, illiquid, high-risk assets, had no audit
and as a UCIS (unregulated collective investment scheme) was illegal
to promote to a retail UK investor. The brochure made a fraudulent
claim as to who the investment manager was.”
“The
trouble is, while Mr Driver has fought hard to get some of his money
back, there are around 1,100 other victims stuck in this fund who may
yet have no idea their pensions are invested in —how shall I say
this- worthless crap”
Meaning
This post purports
to discuss alleged pension and/or investment “scams”.
By
including a
reference to our
client within this blog, the clear inference is that our client is
such a
“scammer”, that
is, behaving dishonestly and not in accordance with clear ethical and
regulatory guidelines, and in breach of its obligations (both express
and implied) to its stakeholders. Again, this is a most serious
allegation to make, and is repeated across the post, through repeated
and unjustified allegations that our client is involved in criminal
activity.
Our client,
Blackmore Global PCC Ltd, is an investment company based in the Isle
of Man. It was set up as an unregulated investment company under the
Companies Act 2006, to operate in that jurisdiction.
I am not at all sure what you mean by “unjustified allegations”. It is evidenced on the FCA website that it is illegal to promote UCIS funds to UK retail investors.
You
have kindly confirmed that your client is an unregulated investment
company – and there is no argument about the fact that it has been
promoted by, among others, associates of Nunn and McCreesh: Ferguson
and Vilka, (not regulated to provide investment or pension advice) to
retail, low-risk pension savers. And further, Nunn and McCreesh were
involved in the promotion of a number of pension scams which are now
under investigation by the Serious Fraud Office. What do you have a
problem with?
Your reference to
our client’s investment company being “toxic,
illiquid, (and containing) high risk assets” has
a natural and ordinary meaning that the product is harmful to an
individual’s pension, worthless and of little value as there is no
market within which it can be re-sold. You cannot have underestimated
the significance of calling the product in question “toxic”
to
our client and its reputation. You go on to describe it as being
“worthless
crap”, the
meaning of which we trust we need not set out in correspondence save
to confirm that the use of vulgar abuse does not offset or place into
favourable context your other allegations, as referred to above.
I see no merit
in further debating this point: you are aware of my position on the
assets of the fund but you repeatedly fail to provide any evidence to
prove me wrong. You cannot object to my references, descriptions and
allegations unless you disprove them. Tell me what the assets are,
provide independent
and credible valuations, and disprove what I have written. Your
repeated failure to disclose what the assets are merely serves to
reinforce the point that the fund is opaque and your clients are
failing to be transparent with the victims or the trustees – or,
indeed, you.
We understand that the value of Blackmore
Global PCC Ltd has increased some 11% since its inception.
Exactly how do you “understand”
this? Have you seen an audit? Have you seen the accounts? Have you
got evidence of 11% growth since inception? If you are right, then
11% since 1.5.14 isn’t actually that much at all – a simple
tracker fund would have done just as well, been cheaper, much lower
risk and not had the ten-year lock in. And further, if the fund has
grown, why did Mr Driver get less back than the scammers invested in
the fund in the first place?
We again note that you fail to make any
mention of this fact, which ultimately would not further your evident
intention to damage our client’s reputation and blatant attempt to
self-promote your own “business”.
What fact? Provide the facts.
I genuinely do not understand why
you think my intention is to damage your client’s reputation. What
benefit would that produce for anyone? Nunn and McCreesh do indeed
have a chequered history because of their involvement with Capita
Oak, Henley and multiple SIPPS invested 100% in Store First, but I
wouldn’t have a motive to take the slightest interest in their
reputation. But I would most definitely want to prevent more victims
from having their pensions invested in Blackmore Global – and I am
sure the existing victims would attest to that intention because of
the profound distress they have gone through. But I am not sure how
or why you think commenting on the unsuitability of your clients’
fund does anything to “self-promote” my business.
It is correct that
the product referred to in this post as “illiquid”.
Our
client offers a ten-year close- ended product that is not designed to
be liquid. It is entirely normal for illiquid products to be offered
for investment, where the investment opportunity is designed to be
long-term. In itself, the term illiquid is correct, however the
manner and context in which it is adopted by you, alongside the terms
“toxic”
and
“scam”
is
clearly designed to be harmful to our client’s reputation.
I am beginning
to realise you know little or nothing about investments in general or
investments for pensions in particular. It is also clear you are
relying entirely on what you “understand” from your clients –
and it has been evidenced that some of this is not true. Investors
who specifically want an illiquid investment into which they are
locked for ten years, would have no problem with Blackmore Global.
Or at least, they would have no problem if they knew what the assets
were (which clearly you don’t). Provided the assets were not toxic
or associated with known investment scammers, then a sophisticated,
HNW investor could do his own due diligence and decide for himself.
But illiquid funds are not suitable for pensions.
I would contend
that no one would lock up their funds for 10 years. I have spoken to
a number of Chartered advisers who all have this opinion.
One raised an
extremely good point. Among the spurious reasons that were used to
entice people out of perfectly sound pensions was the promise of
access from the age of 55. Yet, all the people that I have spoken to,
invested in Blackmore, are over 45 years of age. The sales pitch of
55 is meaningless. Of even greater concern is that their whole
pension fund is locked up to 10 years in some cases and this is an
outrage!
What if an
investor were to die within 10 years, how would the family get the
much needed funds? If you have any conscience at all, think about
that.
It is incorrect to
describe the product as “solely
high risk”. As
with any balanced investment portfolio, there will and should be
asset classes within it which fall within the definition of “high
risk”. Overall,
however, the overall apportionment of such “high
risk” assets
is low and, the portfolio in question is balanced.
Without knowing
what the assets are, neither you nor anyone else could make that
statement with any confidence. How can you state that the overall
apportionment of high risk assets is low and the portfolio in
question is balanced if you don’t know what the assets are and have
never seen an audit?
If it is so good, I am sure you have
invested all your own pension savings into the Blackmore Fund. I look
forward to seeing your investment statement.
The sweeping statements you make
regarding suitability, or any purported lack thereof, of our
corporate client’s close ended investment are of serious concern,
especially when made without any objective attempt at justification.
There can be no justification for your assertion that the products in
issue are wholly unsuitable for any pension fund or that its nature
as a 10-year, closed-ended product renders it “worthless
crap”.
If
you are so sure that I am wrong about Blackmore Global, give me the
evidence – and also provide me with evidence that confirms you
yourself have seen and know what the assets are. You cannot argue
that the Blackmore Global fund is not harmful to individuals’
pensions, because one has suffered loss upon redemption already
(£1,663.17)
and others are being
denied their statutory right to transfer out of their schemes because
no reputable pension trustee would accept an in specie transfer in
something so illiquid and with no audit.
I
will be able to get a considerable number of high profile, well-known
and respected advisers to assert that the product is wholly
unsuitable for retail pensions. And, since they were sold in the UK,
why was the commission filched from the funds not disclosed?
You
state that you “understand that the value of Blackmore Global has
increased 11% since inception”. How did you come to that
conclusion? Did you see an audit – or are you taking your clients’
word for it? If your client’s word on the value of the fund is
anything like their word on who the Investment Manager was, I would
think you are making a somewhat shaky assumption.
Blackmore Global
PCC Ltd is not a UCIS.
Yes it is.
Again, the
suggestion that our client “promotes”
itself
to consumers/customers and that such activity is illegal is a most
serious of allegations to make.
Your client
promotes itself to consumers through Aspinal Chase.
The product in
issue is a closed-ended investment and not a UCIS.
It is a UCIS
Furthermore, our
client’s customers are not “retail’
clients.
Instead, they are investment managers, professional pension trustees
or the like rather than investors in their own right.
This is a common
ruse employed by scammers to deflect attention from their negligent
or fraudulent advice or investments – and I am disappointed to see
you using it. You know very well that we are talking about ordinary
people with pensions so please don’t be obscure and opaque.
The trustees I have spoken to have
made it clear that they are not the clients. The investor is the
client and the recommendations for the investment was made to the
individual client. All the money going into the fund is from retail
clients’ pension funds. Of course the customer is a retail client,
it is the retail clients’ money that is invested.
We addressed above the position in
regards to the identity of the investment manager in question,
Yes you did – falsely. Can you
please tell me the truth now?
and again we are
gravely concerned as to your use of the word “fraudulent”
within
your blog.
It was indeed
fraudulent to state that Meriden Capital Partners was the Investment
Manager when it clearly was not. Then, the subsequent “explanation”
about Mr. Rodriguez of IIG being the Investment Manager was also
wholly untrue.
Your
conclusion that this implies “criminal, deceitful and dishonest
conduct seeking to scam people” is perfectly natural. Indeed, if
you would like to call Mr. Gerald Rodriguez at the Gibraltar
International Bank – +350 200 13900 I am sure he will confirm to you
himself that your client is lying. https://www.gibintbank.gi/contact
The natural and
ordinary meaning which our client attributes to it is that it is
involved in criminal, deceitful and dishonest conduct, through which
it seeks to “scam” people of their pensions.
Your client is
indeed involved; has clearly exhibited deceitful and dishonest
conduct, and people have been scammed out of their pensions.
I have explained how the deceit was organized, all verifiable.
Such a description of our client can only
seek to lower its reputation in the eyes of the reasonable reader,
without any exercise in strained construction.
If your client
helps the victims to redeem their Blackmore Global investments
without further delay, there is no reason why their reputation should
not recover. Your clients need to acknowledge that the fund should
never have been used for pensions and put right any loss or damage
suffered by the victims.
Our client is not
involved in the provision of financial advice to consumers/customers.
Its ultimate clients are pension trustees, and it has no direct
communication with underlying beneficiaries. Our client is not in any
way involved in the provision of advice to consumers who go on to
invest. There is no obligation upon our client to have their company
“audited”.
Despite
such, our corporate client has voluntarily sought an audit of its
business by Grant Thornton,
The
fund was indeed promoted to numerous UK residents – illegally. I
have their details and documentary evidence. The clients are not the
investment managers or the trustees – but the investors themselves.
This is a ruse frequently used by scammers to justify investing
clients’ pensions in high-risk, toxic, illiquid – sometimes
professional-investor-only – funds and instruments. Please be
clear, the “advice” was given to the clients – not investment
managers or trustees. This is clearly evidenced and confirmed by the
trustees.
Your
client was involved from the targeting of prospects, through to the
advice process and investment into their own funds.
which remains
underway and to which you refer. The product is administered through
registered regulated custodians and agents, who control all relevant
bank accounts.
And who are
these custodians and agents? The factsheet and brochure state they
are Corporate Options Ltd and OrmCo Ltd. Corporate Options (IoM)
claims to provide the following: company management and
administration; offshore company formation and management; ship and
yacht registration; e-gaming; bookkeeping and accountancy;
intellectual property rights; IoM relocation; services for IoM
businesses and individuals.
Based on these
claims, I see no reason why Corporate Options should not simply
provide a print out of the investments – if indeed they do the
bookkeeping and accountancy for Blackmore Global. How difficult
would it have been for them to simply provide a transaction report to
the victims, trustees, you and me? Instead of making vague,
unsubstantiated claims about the quality of the assets, and refuting
my fears about the toxicity of the fund, you could have simply
provided the evidence instead of demonstrating you have no idea what
the assets are.
OrmCo PLC is
staffed by qualified chartered accountants. So, again, there is no
reason why the accounts for Blackmore Global could not have been
easily produced. In fact, it is becoming more and more ludicrous
(and suspicious) that neither Corporate Options nor OrmCo nor Grant
Thornton nor Blackmore Global has produced a transaction history of
the investments.
We understand from
our clients that your references to Mr Driver are also factually
incorrect. Optimus was the entity who recommended Blackmore Global
PCC Limited, and who contracted with our corporate client, rather
than Mr Driver. Blackmore Global is, once again, a 10-year investment
and contractually there is no right to redeem before the end of that
10-year period. Any early redemption fee that would have applied to
that investment was in fact waived in full by our clients as a
gesture of goodwill, which would usually amount to 7% of the funds
invested.
Optimus was the
trustee, not the adviser. The adviser was Square Mile – a firm in
the Czech Republic which was not regulated for pension or investment
advice. I hope your
clients have made you aware that Mr Driver has this confirmed in
writing by the FCA. Mr.
Driver was not aware that his pension had been invested in a fund
with a 10-year lock in. The early redemption fee was not waived but
eventually refunded retrospectively.
There was no
financial detriment to Mr Driver. Yes
there was. The loss was only relatively small, but there should not
have been any loss – since according to you the fund has grown 11%
since inception. So Mr. Driver not only suffered an actual loss but
also lack of growth for the period his pension was invested in
Blackmore Global.
Additionally, he was advised to
transfer out of a final salary pension with no proper analysis.
Something that would result in a UK FCA registered adviser being
closed down. No doubt the poorly qualified and unregulated adviser
from Square Mile will say that there was no obligation for a non-UK
firm to provide this analysis at the time. However, the movement from
a final salary scheme will have resulted in substantial and, as yet,
unquantifiable detriment. How many others suffered the same fate? On
that note, does your client ensure that the advisers are all properly
qualified to undertake pension transfer activities?
The structures into
which his funds were invested are registered in a variety of
commonly-used and well-regulated financial jurisdictions subject to
appropriate trust and segregation arrangements, and far from the
“scam”,
“toxic fund’ or
“swamp”
to
which you refer. The allegation that our clients’ products are
“toxic”
is
simply the worst description which can be applied to a product in the
investment market, and cannot be justified on any basis, objective or
otherwise.
Given the recent spate of fund
failures in the Isle of Man, I would question the well-regulated
jurisdiction comment.
I absolutely
stand by the terms I used to describe the fund. Indeed, this is
borne out by the description of the cells in the Blackmore Global
documentation:
“Lifestyle
Cell”:
gaming, spread betting, sports events, construction of facilities,
travel solutions, fine wines, art and antiques.
These
are all categories of investments which are typical of the classic
investment scams and are certainly not suitable for pensions.
“Private
Equity Cell”:
venture capital, growth capital and leveraged buyouts.
Very
high risk and entirely unsuitable for pension investments.
“Property
Cell”:
commercial and residential property developments.
Illiquid,
speculative and high risk. Entirely unsuitable for pension
investments.
“Sustainable
Cell”:
renewable energy including biomass, solar, wind, hydro and waste to
energy projects.
Again,
illiquid, speculative and high risk. Entirely unsuitable for pension
investments.
3. Scammers are
Criminals
As the title to
this post suggests, herein you discuss the alleged lack of regulation
and activity taken by regulators and the police to prevent “scams”
and
to sanction those involved in the same. By including our client
within this post, the clear inference is that our client is involved
in fraudulent, criminal and deceptive conduct. You go to list a
number of “failed”
investments
including Capita Oak and Ark, and the implication of such is that our
corporate client is or was involved in those investments or seeking
to promote a similar product.
You need to be
clear about which clients you are referring to. You have three
clients (according to your own letter): 1. Blackmore Global 2.
Phillip Nunn 3. Patrick McCreesh. Blackmore Global is a corporate
entity so cannot of itself “do” or “say” anything – except
those in control of the entity, i.e. Messrs Nunn and McCreesh, can.
Messrs Nunn and McCreesh were involved in the promotion of Capita Oak
and Henley and numerous SIPPS – all of which were 100% invested in
Store First store pods. Store First is subject to a winding up
petition and the entire schemes and all parties involved in the
promotion, distribution and administration of the schemes are subject
to a Serious Fraud Office investigation.
The deceitful conduct of your clients
is clear and detailed above.
“This
so-called Malta-based pension trustee is running the Optimus
Retirement Benefit Scam No. 1 QROPS. it is illegally promoting UCIS
funds to UK residents and these include toxic, illiquid funds such as
Blackmore Global and Richard Reinert’s Symphony.”
A QROPS on its
own is merely a wrapper and on its own is relatively harmless –
except for the fact that should HMRC decide at some point it does not
meet the requirements, it can be removed from the QROPS list without
notice to the members of the scheme. However, it should not have
been promoted to UK residents at all, should not have accepted
transfers from advisers (Square Mile) who were not licensed for
pension advice, should not have allowed investments in entirely
unsuitable UCIS funds such as Blackmore Global – a high risk,
opaque fund with no tradable assets.
QROPS are sold to UK residents, in
these cases, for one reason. To get the funds away from the regulated
jurisdiction of the FCA where UCIS and undisclosed fees are rife. A
real IFA would recommend regulated funds in a UK pension at a
fraction of the cost, with no commissions being taken.
“Optimus
permitted UK residents to be put into a QROPS and then be invested in
Blackmore Global and Symphony UCIS funds: toxic, high risk, illiquid
and volatile. Blackmore Global is run by Nunn McCreesh: one of the
cold calling scammers behind Capita Oak, Henley and other scams
invested 100% in Store First — the promoters are now under
investigation by the Serious Fraud Office and Store First is subject
to five winding-up petitions.”
Correct.
Meaning
Again, you describe
our corporate client’s products as being “toxic,
illiquid funds”. Correct.
We address above
that, whilst it is correct to describe the product as “illiquid”
the
manner and context in which that term is used is designed to be
harmful to our client. My
intention is to warn the public against having their pensions
invested in the fund as it is indeed entirely unsuitable for pension
investments.
The funds are not liquid, hence the
term illiquid.
The product offered
is not worthless or “toxic”
as
you repeatedly seek to describe it as. So
prove it. You keep claiming it is not worthless and toxic, but you
provide no evidence and you clearly don’t even know what the assets
are.
The value of the
product has in fact increased since its inception and, again, is
designed as a long-term investment of 10 years. As
above: prove it.
For the sake of
clarity, Nunn McCreesh was a financial advisory firm established in
around 2008 to 2009 by our clients, Phillip Nunn and Patrick
McCreesh. Nunn McCreesh has been dormant since 2013, and is now wound
up. Both our clients Messrs Nunn and McCreesh were directors of this
firm. It was never involved in “cold
calling”.
Nunn McCreesh
was involved in cold calling and I have several witnesses prepared to
testify to this, and
are looking forward to their chance to do so.
For the sake of
clarity, I will also refer you to the Insolvency Service’s witness
statement dated 27.5.2015:
Documents and information received
from four members of CAPITA OAK indicated they were initially
contacted by Craig Mason or Patrick McCreesh of Nunn McCreesh of Its
Your Pension Ltd and offered pension review services prior to them
being referred to JACKSON FRANCIS or Sycamore for the transfer of
their pension to CAPITA OAK.
On 3.3.15 I received an undated
letter in which it was stated that Its Your Pension had not traded
and was a dormant company and that Nunn McCreesh had traded as an
insurance brokerage between 2009 and 2012 when they entered into a
verbal arrangement with TRANSEURO where in return for providing
pension leads to JACKSON FRANCIS they received a commission from
TRANSEURO.
Nunn McCreesh provided JACKSON
FRANCIS with 100-200 leads per month which were provided by email
and/or telephone for which they received £899,829.86 from TRANSEURO
during the period 26.3.12 to 14.5.14.
As your clients
clearly received a substantial sum of money from the Transeuro scam,
perhaps you would like to suggest they return this money to the
victims to help them with their profound distress, loss of their life
savings and tax liabilities? I am sure this would be much
appreciated and would mitigate some of their inevitably poor
reputation.
Rather, it
generated business through the purchase of leads through reputable
providers such as moneysupermarket.com.
This is a well-known and established practice that many businesses
engage in, and this business was largely an insurance brokerage, also
dealing in wealth management.
This
is also an established practiced used widely by scammers. Nunn
McCreesh only had a license for selling insurance so if it was also
dealing in wealth management, then it was doing so illegally. Also,
Nunn McCreesh was an appointed representative of Sage Financial
Services which had gone into administration by July 2012 – just
before the Capita Oak et al scams were launched.
As
part of that business’ operations, it inevitably generated leads for
mortgages or investments in respect of which it would give
customers/consumers the option to refer to another firm that may be
able to assist them. As
clearly evidenced by the Insolvency Service’s witness statement,
Nunn McCreesh and Its Your Pension were supplying up to 200 leads per
month to Jackson Francis – one of the cold calling scammers
involved in these schemes.
Our clients had no
control over what financial investment advice may have subsequently
been given to customers/consumers, and whether those
customers/consumers then acted upon that advice. Nonsense.
Your clients had already entered into an agreement with Transeuro
regarding the 100% investment of all 1,000+ victims’ pensions into
Store First store pods and would have shared some of the 46%
commission (of £120 million) – 16% of which had been
stolen/defrauded from the victims.
I have already proved your clients
gave the advice (Remember Marc Rees for example?) and they dealt with
the UK trustees to move the funds into Blackmore. I would call that
control, what would you call it?
It is wholly false
to state that our clients are “behind”
Capita
Oak or Henley. Read
what the Insolvency Service wrote: it was clear the Messrs Nunn and
McCreesh were central to the promotion and distribution of Capita Oak
and Henley. Given their purported “25 years’ experience in
financial services”, had they possessed any ethics or conscience
they would have tried to stop this scam rather than becoming part of
it.
Furthermore, it is
utterly untrue and wholly insupportable to suggest that our client is
now under investigation by the Serious Fraud Office. Again,
I can only refer you to what the Insolvency Service has stated, and
also what the Serious Fraud Office has put in the public domain.
Numerous victims
have made their statements to the SFO personally and under oath –
as indeed have I.
The implication of
your reference to “promoters”
is
that you are referring to Messrs McCreesh and Nunn. By seeking to
associate our clients with funds such as Capita Oak and Henley, the
clear inference is that our clients are unskilled, dishonest and
deceptive so as to mislead their clients and stakeholders. That could
not be further from the truth. As
above: Again, I can only refer you to what the Insolvency Service has
stated, and also what the Serious Fraud Office has put in the public
domain. Numerous victims have made their statements – as indeed
have I.
“Gambling
with your Pension”
We direct you to
the above post on the Website, and are gravely concerned as to its
content.
“So, make
sure you only use an advisory firm which is licensed to provide
pension and investment advice….I have no idea who the jolly pair of
gamblers are in the photo on this blog, but I am sure no informed
person would entrust them with a pension and I reckon Kipling would
have had a thing or two to say about them. Away from the fun fun fun
of Vegas, these two amiable-looking scallywags could probably scrub
up and look like respectable independent financial advisers with a
business-like suit and a leather portfolio full of impressive
documentation about funds with imaginative names such as “Symphony”
and “Blackmore Global”. But if they did so without a
license, they would be criminals.”
Do you have permission to use the Las
Vegas picture? Investors Trust are very worried that people are
using this photograph as it is their property.
Meaning
Our client is not
an “advisory
firm”. Our
corporate client is in no way involved in the provision of advice to
consumers/customers, as we make clear above. Again,
you need to be clear which client you are talking about. Blackmore
Global the corporate entity or Messrs Nunn and McCreesh. Nunn and
McCreesh was indeed involved in introducing/promoting investment into
Blackmore Global.
If a
customer/consumer considers that they were inappropriately advised
upon the risks associated with an investment, or the fact that they
would be locked into an investment for a period of 10 years, their
first and only recourse is to seek redress from the relevant
financial advisor. Had
your clients not been actively promoting the Blackmore Global fund
themselves to unlicensed firms purporting to be financial advisers, I
might have agreed with you to a limited extent.
The clear inference
from your blog is that our corporate client is deceptive, deceitful
and dishonest in the promotion of its products, and in its
literature, that is distributed to customers/consumers by any
financial advisor. We
have already established that the inclusion of Meriden Capital
Partners as Investment Manager was deceitful and dishonest – as was
the subsequent claim made
by you
that Gerald Rodriguez of IIG was the Investment Manager.
The blog is clearly
intended to harm our client’s reputation by dissuading any investment
in its products. You
stated earlier in your letter that the fund was for High Net Worth
individuals – and I seriously doubt that my blog would dissuade
them from investing in Blackmore Global if they were enthusiastic
about investing blindly in high risk, illiquid funds with no audit.
The intention was to warn cautious, low-risk, pension savers against
the dangers of having their entire life savings invested in such a
fund.
Reference to
“imaginative
names” suggests
that the product themselves are imaginary and do not exist, or are
presented in a manner to infer respectability or credibility where
none exists or could exist. This again could not be further from the
truth. Blackmore Global is a well-established investment house, with
clear documentary evidence demonstrating its existence and into what
products monies are invested. We
have already established that the documentary evidence (factsheet and
brochure) contained false statements. Further, there is no audit so
there is no evidence as to where the monies are invested – and even
you don’t know.
“Serious
Fraud Office Requests Pension and Investment Scam Reports”
Again, this post
begins with reference to an “investigation”
by
the Serious Fraud Office into Capita Oak and other funds, where it is
well reported within the media that retirees have lost the entirety
or significant portions of pensions as a result of investments into
them. By deliberately linking our client to these entities, Your
clients are linked to these entities – as clearly evidenced by the
Insolvency Service’s witness statement
your only intention
can be to divert business from them and to cause serious financial
harm as a result. We quote below the salient paragraphs within the
post, which refer to our clients. I
have no interest in causing your clients financial harm – why would
I? But I do think that vulnerable pension savers have a right to
know the background of the people behind a fund which is being
promoted to retail, UK-resident investors.
“Of course
the blooming obvious happened — all the scammers went on to operate
further scams and ruin thousands more victims’ lives. The cold
calling firm, Nunn McCreesh, went on to operate the toxic UCIS fund,
Blackmore Global; many of the cold callers upgraded their operations
to “introducers” and the Ginger Scammer promoted himself to
fund investment manager in the Trafalgar Multi Asset Fund (£21
million now suspended).”
And all of that
paragraph is 100% true.
Meaning:
On any ordinary
consideration, a reference to “all
the scammers went on to operate further scams and ruin thousand more
victims’ lives” is
intended to create the impression that our clients are criminals, and
have engaged in fraudulent and deceitful practices, which they are
seeking to replicate through Blackmore Global PCC Ltd. You adopt
highly emotive language in describing those that invested in funds
that have “failed”,
but
what you neglect to accurately describe is our clients’ (limited)
involvement. Your
clients’ involvement was far from “limited” as you put it.
Nunn McCreesh earned £900k providing up to 200 leads a month to a
cold-calling scam outfit (Jackson Francis) over a two year period.
They had entered into an agreement with Transeuro, so they were in on
the plan from the start.
A reference to our
clients’ former business, Nunn McCreesh, as being a
“cold calling firm” is
clearly intended to discredit our clients. The reality is that at no
point was Nunn McCreesh a cold calling firm, as set out above. Nunn
McCreesh had indeed been cold calling directly, as well as working
closely with cold calling scammers – feeding them thousands of
leads.
Referring to our
client, Blackmore Global PCC Ltd, as a toxic, UCIS fund is an attempt
to describe its business as worthless. It is not, as you will be
aware, a fund. Rather, it is, as set out above, a closed-ended
investment company. The underlying asset classes are not “worthless”,
but
rather have increased in value since establishment. Again,
you are confusing the asset classes with the assets themselves. The
classes may not be worthless – because they are generic and loosely
refer to a type of asset. But the assets themselves may or may not
be worthless – we won’t know until the mysterious, long-promised
audit makes an appearance. My worry is that the sustainable cell
which states it invests in “waste to energy projects”, might
contain some Premier New Earth Recycling – which is indeed now
worthless.
6. Blackmore
Global Fund — Asset or Black Hole?
Of serious concern
to our clients is your most recent post entitled “Blackmore
Global Fund —Asset or Black Hole”. By
reference to the title alone, the clear inference is that our
corporate client’s product is worthless and that any monies invested
have been forever lost. So,
provide the accounts and the audit and prove what the fund is worth.
It is simply not credible that a firm like Grant Thornton could take
almost a year to produce an audit.
I think we can agree the lack of information about the fund could be
referred to as a black hole.
We set out below the salient paragraphs
of the post:
“A fund like Blackmore Global
really ought to be audited as soon as possible — to make sure it
isn’t simply a “black
hole” into which victims’ hard-earned pensions have sunk.
Numerous worried pension savers are stuck in the Blackmore Global
Fund and finding it difficult — if not impossible — to get out.
They are seemingly “locked in” for ten years.”
“Nunn and
McCreesh generated up to 200 leads a month to pension scammers in
relation to a series of pension/investment scams which are now under
investigation by the Serious Fraud Office. This entailed £120
million worth of pensions being invested in Store First store pods
which are now the subject of a winding up petition — and arguably
worthless.”
“The
Blackmore Global NAV Factsheet also states that there is a ten-year
lock-in to the fund. So why would anyone invest a pension in such a
fund? A pension saver has a statutory right to a transfer and might
want to take his PCLS — 25% tax free withdrawal at age 55 — or
retire, or even die. What on earth is the point in using Blackmore
Global for a pension at all? Ever.”
“Most of
the victims of the Blackmore Global fund were initially cold-called
by a firm called Aspinal Chase. And all the victims were advised by
unregulated investment advisers such as
Forth
Capital and Square Mile Financial Services (an insurance license does
not cover regulated investment advice). But more worryingly, all of
them were put into a QROPS in Malta or the Isle of Man. So why were
UK residents transferred to an offshore pension at all, and why were
most or all of their pension funds invested in a UCIS which is
illegal to be promoted to UK residents?”
“And here,
we get back to whether the unscrambling of these pension and
investment scams is more about who you know rather than what you
know. One victim had his pension invested 75% in Blackmore Global and
25% in Symphony. Symphony was a fund invested in derivatives and
highly leveraged.”
“Now we
have gone round in a complete circle. A catalogue of lies, deception,
fraud, mis-selling, negligence and incompetence.”
“I don’t
envy Grant Thornton (if indeed they are the auditors) because they
have got to unscramble this unholy mess. And I strongly suspect that,
behind the scenes, there are certain parties who are busting a gut to
ensure the audit is never published. Two of these may well be John
Ferguson and David Vilka of Square Mile in the Czech Republic who
seem to have a strong vested interest in promoting this black hole of
a fund.”
“Meanwhile,
the longer the victims are held back from transferring out of this
toxic swamp of a fund, the more serious the complaints against the
various parties involved will be. These will include the cold-calling
scammers; introducers; advisers; pension trustees and insurance
companies such as Investors Trust who allowed this investment and the
pensions transfers from unlicensed advisers.” And?
All of the above is true.
Meaning
You describe
investors in our client’s products as being “stuck”
and
“locked
in”, with
numerous “worried
pension savers”. The
natural and ordinary meaning of this statement is that investors
cannot exit the fund and that their investment potentially forever
lost in a
“black hole”. This
highly emotive paragraph can only be intended to create fear and
misstates the fact that the product in question is, as set out
elsewhere, intended to be fixed for a period of 10 years. The purpose
of fixing the product for a 10-year period is to ultimately increase
returns for investors and to enable the underlying asset classes to
embed, generating the highest return whilst allowing a period where
investors do not call upon the company to extract monies invested.
So
tell your clients to let the retail
investors out of the fund – and give them a copy of the audit. I am
sure there will be enough sophisticated and institutional investors
that wish to remain. Have you asked your clients what percentage of
the funds come from UK retail pensions and from sophisticated
investors/institutions? This will be a question raised in court.
The suggestion that our clients
Messrs Nunn and McCreesh, generated up to 200 leads to advisors now
under investigation by the Serious Fraud Office, as it led to
investment into assets that are now worthless, is obviously designed
to impact our clients’ credibility and reputation. It
doesn’t matter what the “design” was – it is true and clearly
evidenced.There
is quite enough smoke and mirrors already without trying to hide your
clients’ background.
The natural and
ordinary meaning of such a statement, to any ordinary reader, is that
our clients facilitated or engaged in conduct that is criminal, and
in fact the most serious of conduct that deceived retirees and led to
the loss of their pension funds. Capita
Oak and Henley were repeatedly determined by the Pensions Ombudsman
as being scams. And scammers are criminals (as confirmed by the
Pensions Regulator). Your clients, Messrs Nunn and McCreesh did
facilitate and were engaged in the promotion and distribution of
Capita Oak and Henley and had entered into an agreement with
Transeuro – so they would have known the pensions were going to be
invested in store pods. You claimed several thousands of words ago
that your clients had 25 years’ experience in the financial
services sector – therefore they should have known better than to
get involved in such an obvious scam which would inevitably ruin
thousands of people’s lives. They would have known that the object
of the exercise was to earn substantial amounts of investment
introduction commission from Store First at the expense of the
victims.
This statement is
wholly untrue. As
above, your clients had an agreement with Transeuro and knew what the
whole scheme was about.
In fact, the
correct position is that through Nunn McCreesh they purchased leads
through reputable companies, such as moneysupermarket.com.
Where that lead potentially also generated opportunities which were
not serviced by Nunn McCreesh, on the consent of the
customer/consumer how
did the consumer “consent”?,
this was referred to several other firms. Yes,
the cold-calling scammers who were also involved in the whole scheme.
Our clients had no
control whatsoever over the advice subsequently given, as set out
above, and whether that advice was acted upon. But
they knew that every lead which was successfully converted would end
up with the investor losing his or her entire pension as it was due
to be 100% invested in store pods.
Our clients were
not involved the process of giving that advice. They
were a part of the conduit which harvested the leads and passed them
over for conversion to the scammers. They
were the
process.
Our clients are, in
reality, no more responsible than the company from which they first
purchased the relevant lead. Your
clients were an integral part of the whole process and were fully
aware that every lead they passed on was in danger of facing
financial ruin.
However, you seek
to present our clients as dishonest and deceptive, and imply that
their conduct/involvement is also under investigation by the Serious
Fraud Office. This is an extremely serious allegation to make and one
without any factual basis or truth. How
would you describe a firm that passes on 200 leads a month for two
years knowing that if converted, each individual’s entire pension
would be invested in store pods, and that the value of the assets
would immediately drop by at least 46% due to the investment
introduction commissions (in which they shared to the tune of £900k)?
DEFAMATORY MEANING
Your comments
appear to be based on a number of fundamental misconceptions and
errors:
As we refer to
above, our corporate client’s product Blackmore Global is not a UCIS.
Yes
it is.
It is, again as set
out elsewhere and above, a 10-year closed-ended product and as
promoted by an unregulated investment company. Your statements that
Blackmore Global is a UCIS fund at all, and also that it is a UCIS
fund that is being illegally promoted to retail investors are simply
wrong. This
has already been dealt with several times above.
In any event, and
again as stated above, our corporate client does not and has never
contracted directly with retail investors (ie. individual personal
investors) in respect of the Blackmore Global product. Your
corporate client is a corporate entity which cannot of itself “do”
anything. But the directors can and do. Messrs Nunn and McCreesh
ran Aspinal Chase which was a cold calling, lead generating
introducer, which was contacting members of the public so that they
could have their pensions invested in Blackmore Global. Mr. Driver
mainly dealt with Aspinal Chase, and the pension transfer
administration was handled by Pensions & Life – another company
run by Messrs Nunn and McCreesh.
It only contracts
with professional and institutional investment entities. The
individual investors (who you are wrongly describing as “victims”)
are
in fact (and again, as set out above) direct clients of those
professional investment entities who make investment recommendations
to their personal clients. Already
dealt with above.
Once again, our
corporate client provides no advice or recommendation as to the
suitability (or otherwise) of the relevant product to the
professional
investment advisers. Any complaints about the unsuitability of an
investment choice for a particular individual are a matter for that
individual to take up with their own professional investment adviser.
Our client has no relationship with those individuals, and only with
professional and institutional investors who undertake their own
extensive due diligence on all of its investment products. Your
client has no relationship with anybody – there is no communication
with the trustees or the investors.
If this gets to court, I will be
demanding to see evidence of the extensive due diligence. Since
there are no accounts, no valuations, a banned fund manager involved
in other scams (Weal), evidence of collaboration with the Capita Oak
scam (subject to an SFO investigation) and no evidence of your
clients’ qualifications to run a fund- I would question the word
“extensive”.
Accordingly,
whether a fund is “wholly
unsuitable for a pension fund” is a
matter to be taken up with the relevant independent financial adviser
involved and assessed on each individual case. So
why were your clients Messrs Nunn and McCreesh, acting as Aspinal
Chase, contacting retail members of the public in the UK in order to
persuade them to move their pensions to a QROPS so that they could be
invested in their own fund, Blackmore Global? Why
was the adviser they introduced, after an assessment, recommending
their funds?
There can be no
justification for your assertion that our clients’ products are,
without exception, unsuitable for any
pension funds when in fact they will in many cases be wholly,
suitable. There
is, indeed, every justification – because until and unless the
mythical audit appears, we won’t know for certain what the
underlying assets are. There is very compelling evidence that the
assets have clear links to other investment scams, but let us wait
and see when the audit comes out.
Furthermore, your
various inferences of conflicts of interests are made without any
semblance of objective foundation or justification. It
is a clear conflict of interest for your clients to be promoting the
fund as well as running the fund to the general public – i.e.
ordinary, retail pension savers.
Blackmore Global is
not a toxic investment. Based
on the clear evidence we already have which is published on your
clients’ own documentation, it most certainly is a toxic
investment. This can be further reinforced or refuted once the audit
is available. But to be honest Steve, to keep on repeating
statements about the fund without having a clue what the investments
are is pointless.
Despite the length
and content of your various posts, without carrying out your own
detailed due diligence (no evidence of which is present in any of
them), you simply cannot be in a position to make the Defamatory
Statements, either as statements of opinion or fact. This being the
case, and based upon the serious financial harm already done to our
clients’ interests as a result of their content, your various claims
are seriously defamatory and allow our client to seek redress from
the Queen’s Bench Division of the High Court. This
begs the question whether you yourself have carried out any detailed
due diligence. You keep denying that Blackmore Global is toxic, but
you haven’t a clue what the assets are.
You also state that
our corporate client is directly
involved in “pension
scams”, that
their investments are “esoteric”
in
nature (and so less of a “mainstream”
and
viable option than others). Similarly, your reference to our client
being “unregulated’
against
a context of their not needing to be in the Isle of Man is clearly
intended to damage its reputation in the minds of readers of the
Website and the posts — our client has, for the avoidance of doubt,
the requisite “Regulated Custodian”, of which you should be
aware and have failed to clarify in an attempt to strike a more
justifiable and balanced tone in the relevant post. This
has all been dealt with above.
Again, any
individuals would have received professional advice in that regard
before the relevant investments were made and our client was under no
obligation (nor could be, nor could any of its market comparators) to
investigate the nature of the advice provided by independent
and
professional financial advisers which they can only expect to have
been supported by detailed suitability assessments on the type of
investments into which relevant funds were placed to achieve the
relevant client’s stated investment aims. This
has all been dealt with above.
Our clients run
their businesses to the highest professional standards So
where are the audit and the accounts?
in conjunction with
a carefully-selected external advisory team. Carefully
selected like Meriden Capital?
Their reputation is
unblemished and hard-won, and your attacks upon them should not, and
will not, be tolerated. If
your clients have a hard-won, unblemished reputation, why haven’t
they come forward to help the Capita Oak and Henley victims? They
now know that over 1,000 victims have lost their pensions due to them
being 100% invested in store pods and that many of them are facing
crippling tax charges. So, how many times have they come forward and
offered to help the victims which they helped put in this position in
the first place? Have they offered to put up the £900k they earned
out of ruining these people to help them?
After Capita Oak
and Henley imploded, did they devote their lives to help save and
rescue the victims? No, they set up a toxic, illiquid, speculative
fund and then promoted it to more retail pension savers.
DEFAMATION AND
MALICIOUS FALSEHOOD
The content of the
Defamatory Statements can lead, and in this case have in fact already
led, to our clients suffering serious financial loss, and as such
serious harm to their reputation as a business. All
they had to do was to offer to help the Capita Oak and Henley victims
and their reputation would have been fine. Another thing that would
have helped would have been to publish a clear disclaimer on the
Blackmore Global: “for professional, institutional, high-net-worth
investors only”.
Messrs Nunn and
McCreesh have also seen their personal and professional reputations
tarnished as a result of your allegations. Because of your posts, at
least one lender has refused to deal with our client, Was
that by any chance in respect of a loan application to secure funds
to help the Capita Oak and Henley victims?Your
clients are without question mistaken because lenders would not
refuse a loan on the basis of a blog – they would refuse a loan on
the basis of lack of security or bad credit history. No lenders have
come to me asking for confirmation or evidence of information
contained in my blogs.
various
intermediaries have refused to deal and introduce clients and
opportunities to them, Can
you blame them when your clients were involved in the promotion of
Capita Oak and Henley and far from stopping to help the victims they
are working on creating more victims?
and at least one
financial services provider with whom they have enjoyed a
longstanding association has indicated that they no longer intend to
deal with our client. Can
you blame them when your clients were involved in the promotion of
Capita Oak and Henley and far from stopping to help the victims they
are working on creating more victims?
Dependent upon your
response and the extent of the financial damage which you have sought
and have been able to do to date (which we will quantify in due
course), our client reserves the right to seek relief from the Court
by way of an award in damages for inducement to breach contract over
and above or in conjunction with the damages which it may seek to
recover from you in defamation (again, to which we refer below). I
don’t think the financial damage your clients have caused can be
finally quantified until we see the audit for Blackmore Global. I
was speaking to one of the trustees yesterday, and he said he still
can’t get a sensible answer as to where the audit is or what is
taking so long. He has tried speaking to both Grant Thornton and
Blackmore Global – but there is no conclusive news. I can tell you
quite accurately what the financial damage suffered by the Capita Oak
and Henley victims has been.
The statements set
out above have caused and are likely to cause our client serious
financial damage, thereby constituting “serious
harm” pursuant
to section 1 of the Defamation Act 2013. In particular, our clients
are extremely concerned that, were they to be further repeated to
recipients over and above the content of, our corporate client is
likely to incur further losses by way of other clients looking to
terminate their contracts with them. If
these clients are retail, UK-resident pension savers, then they
should all be released from Blackmore Global immediately. To refuse
to allow them to redeem would now be entirely irresponsible and
negligent now.
Regardless of the
serious harm already cause to our clients by the publication of the
Defamatory Statements, and given what we believe to be the wide level
of dissemination to an audience likely to (at least initially) place
some trust in their contents as a result of your intent to “rescue
and prevent pension and investment scam victims”, the
sheer gravity of your allegations, namely that our clients have
behaved dishonestly, looked to mislead clients and effectively
defraud them of very substantial sums of money largely makes any
discussion around the harm caused as a result of their publication
academic, and the Court would in our view have no difficulty in
inferring serious harm having been caused even where it is borne out
by the evidence already available to our clients. It
is beginning to become somewhat tedious reading the many repetitions
of “your clients having suffered serious harm”. What about the
1,000+ victims who have lost their pensions? What about those who
have had heart attacks, strokes, nervous breakdowns? What about
those who have died – some of whom committed suicide because of the
unbearable stress of their predicament: i.e. losing their entire life
savings and never being able to retire. You have already said that
the Blackmore Global fund is aimed at high net worth individuals,
institutional and professional investors. So let them get on with
promoting the fund to them. The reality is, of course, that those
types of investors would carry out their own due diligence and would
never touch a fund without an audit with a very long barge pole.
In the
circumstances and given their substance, there can be no real doubt
as to the meanings of the Defamatory Statements, as we set out above,
in the eyes of right-thinking members of society (including our
clients’ students and other stakeholders). Students?
I sincerely hope your clients are not teaching others the same
methods and approaches to pensions and investments.
The Defamatory
Statements are wholly unsupportable and indefensible on the basis of
being substantially true, statements of honest opinion or made in any
manner or circumstance which could conceivably be protected by
statutory or qualified privilege. 100%
of what I have written is clearly evidenced and absolutely true.
Given their
audience (insofar as we are aware of the extent of publication
without further disclosure from you) and the niche nature of our
clients’ products and services, our clients’ concerns are
well-founded and in the circumstances are further monitoring their
impact whilst being entirely justified in looking to issue
proceedings against you in defamation for an award in damages to
vindicate the damage done to its reputation, in addition to an
appropriate and prominent apology to be published to each and every
recipient of them. How
many apologies have your clients made to the Capita Oak and Henley
victims? And how many apologies have they made to Mr Driver?
In the alternative
and in the very unlikely event that the Court were not to agree that
our clients are entitled to recover damages from you in defamation,
given that the statements above were made despite the fact that you
knew them to be entirely untrue, I
did not know them to be entirely untrue. I never say anything unless
I know it to be true and have clear evidence.
with the malicious
intent of causing damage to our clients’ business and financial
interests and have already cause our clients actual financial loss,
our clients would in any event be well-advised to issue proceedings
against you for an award of damages in malicious falsehood. I
have no interest in causing damage to your clients’ business and
financial interests. But I do want to stop the Blackmore Global fund
from being promoting (by your clients) to retail investors.
Your acts of
defamation and/or malicious falsehood I
have neither defamed nor written falsehoods – malicious or
otherwise.
are wholly
unacceptable to our clients and, in the circumstances, it intends, if
this matter cannot be resolved on a more informal basis, to pursue a
claim in defamation and/or malicious falsehood against you, in
addition to a potential claim for inducement to breach contract. I
think many of the various victims of Capita Oak, Henley and Blackmore
Global would be absolutely delighted if this were to come to court.
They would all be queuing up to provide witness statements and
testimonies. Indeed, I also think it would be a good thing if this
were all put in the public domain – as long as it does nothing to
compromise the Serious Fraud Office investigations and prosecutions.
REMEDIES
In the
circumstances, we urgently seek the following remedies from you:
Publication of an
immediate suitable apology to any and all recipients of the
Defamatory Statements and any and all other similar messages; I
am afraid I cannot do that as I have made no defamatory statements
Your undertaking
not to repeat the allegations complained of above; I
have made no allegations – I have made factual statements which
are clearly evidenced
Compensation for
the damage to our clients’ reputation and for any financial loss it
has suffered; Your
clients can make up for their own poor reputation by offering to
compensate the Capita Oak and Henley victims and by allowing all the
Blackmore Global investors who are in pensions to redeem immediately
and pay them compensation for their losses (and obvious charge no
early redemption fees)
Reimbursement of
our clients’ legal costs. What
legal costs? Slater and Gordon is a no-win-no-fee firm and you
personally are a mate of Phillip Nunn so I would have thought you
are doing this as a favour (especially as you have no expertise in
defamation).
If proceedings
prove necessary and unavoidable (which may, dependent upon your
Response or failure to respond as requested), the remedies which will
be granted to our client by the Court include:
An injunction,
Damages;
Publication of a
suitable apology,
Your further
assurance that the statements referred to above (or any similar
statements) will not be made or repeated;
Legal costs and
interest.
What I will
propose:
Your clients
pay £900k into an escrow account for the benefit of the Capita Oak
and Henley victims
Your clients
agree to release all pension savers out of the Blackmore Global fund
and make a clear undertaking not to allow any further retail
investors/pension savers to become invested in it
Your clients to
pay compensation to all retail investors/pension savers in Blackmore
Global for financial loss and distress caused due to the refusal to
redeem out of the fund
You and your
client will immediately provide a complete transaction history of
all asset purchases from inception, quarterly NAVs and a definitive
date for publication of the audit
You and your
clients to confirm that the following are among the assets of the
Blackmore Global fund:
Please reply to
this letter as a matter of urgency, in the most complete manner
possible and in any case by 4:00 PM on 1 August 2017. Should you
delete the Defamatory Statements from your Website pending resolution
of this matter, our clients would (subject to the provision of
appropriate reassurances as to your current and further conduct)
consider taking no further action against you. I
cannot delete the “defamatory statements” you refer to, because
there are none.
Pending your
response, our clients reserve all rights against you, including in
relation to an application for urgent injunctive relief, in the event
that the undertakings requested above are not provided and the
remedial action requested above and therein not taken. We strongly
recommend that you seek legal advice in relation to the contents of
this letter from a solicitor specialising in the law of defamation.
You should not underestimate our clients’ determination to seek
redress as a result of your wholly unfounded, profoundly damaging and
completely unjustifiable allegations. And
you should not underestimate my determination to obtain redress for
your clients’ victims – and to prevent further victims.
Today, 7th April 2020, was supposed to have been the second part of the Continental Wealth Management criminal trial. Obviously, due to Coronavirus, the hearing has been postponed. For now. As soon as the pandemic is under control and life in the courts (and elsewhere) gets back to “normal”, the hearings will be rescheduled. This is obviously a disappointment to the victims who are waiting anxiously to see the outcome of the trial – but it is only a relatively minor setback in the grand scheme of things. We will get these defendants into court, and the judge will give directions as to how to deal with the crimes committed.
The crimes involved are:
Fraud
Disloyal administration
Falsification of commercial documentation
The second batch of defendants comprises:
Stephen Ward of Premier Pension Solutions and Premier Pension Transfers, IPTS (International Pension Transfer Specialists), AES International, Dorrixo Alliance and Marazion
Paul Clarke of Continental Wealth Management, AES International and Roebuck Wealth
Jody Smart (alias Jody Bell) of Continental Wealth Trust, Jody Bell Fashion, Grant A Wish charity and Mercurio Conpro
Darren Kirby (partner of Jody Bell) of Continental Wealth Management and Continental Wealth Trust
The first batch of defendants were cross examined in the week of 24th February 2020 and comprised:
Patrick Kirby (brother of Darren Kirby)
Anthony Downs
Dean Stogsdill
Neil Hathaway (all of Continental Wealth Management)
When we first set out this case, we weren’t entirely sure the court would accept the charge of fraud – because it is difficult to prove as a complainant needs to establish intent. However, the court had no hesitation in accepting this charge, as well as the additional charges of disloyal administration and falsification of commercial documentation.
The evidence in the case is very clear and incontrovertible: seventeen lead complainants (out of more than 600) who all exhibit the exact same “symptoms”:
Low to medium risk investors placed in inappropriate, high-risk investments
Insurance bonds sold illegally
Investments churned repeatedly
No license to provide insurance or investment advice
No qualifications to provide financial advice
No adjustment to financial strategy when serious losses began to appear
It is tempting to think that perhaps Continental Wealth Management (which later became Continental Wealth Trust but still kept the original name) was an isolated case. But, sadly, that is not so. I have seen many examples (in Spain and other jurisdictions) of clients being placed into inappropriate investments, by other so-called advisers, which paid large, hidden commissions over the past six years. Stephen Ward was routinely flogging the EEA Life Settlements fund – putting some investors’ entire portfolios into this risky fund which paid up to 19% in commission. He was also flogging other high-risk funds such as Traded Life Policies, Axiom, Blackrock Gold and Aria – as well as selling bonds such as Skandia (OMI) illegally. And, naturally, Ward’s clients suffered crippling losses.
The above method, show-cased by Stephen Ward, has – of course – been rife in offshore financial services for years. It has made the advisers rich and the investors poor. In short, this is disloyalty at its worst: the adviser putting his own interests above those of his clients.
And that, in Spain and other European countries, is a criminal offence.
But Ward wasn’t alone: Paul Clarke did the same even after he left Continental Wealth Management and became an agent of AES International – exploiting the financial advisory market on the Costa Blanca as he decimated clients’ savings with more illegally-sold insurance bonds, structured notes and expensive, high-commission funds. Clarke regularly featured in whole-page spreads in Euro Weekly – spouting “expertise” and masquerading as a qualified, experienced financial adviser.
There are few firms in Spain – or indeed the rest of Europe and beyond – which do not rely heavily on the notorious insurance bond. The offshore market is dominated by the usual suspects: OMI (previously Skandia and now Quilter); Generali, SEB, RL360 and Investors Trust. And all these insurance companies encourage unregulated, unqualified advisors to sell these bonds illegally. There are few, if any, benefits to the consumer – and no insurance bond should ever be used inside a QROPS (unless there’s no lock-in and no commission).
I just Googled: “wealth management and financial advice Spain”. The top results came up as: Blacktower; Blevins Franks; Abbey Wealth; Masttro (a firm I’d never heard of before); Finance Spain (another firm I’d never heard of); Spectrum IFA Group; and Alexander Peter. I am not saying whether any of these firms are either good or bad – but I think it is safe to assume they are all selling insurance bonds illegally.
Of course, there’s nothing inherently wrong with an insurance bond. It is, after all, just a wrapper – or container for funds and investments. There are, arguably, some tax advantages in some jurisdictions – although they should never be used inside a QROPS.
The problem with an insurance bond – whether from OMI, SEB, Generali or RL360 – is that an investor is going to get one whether he wants or needs one or can afford one or not. The investor will get locked in for up to ten years and he won’t be aware that the adviser will get paid an 8% commission for selling the bond. This commission will get clawed back by the life office over the term of the bond.
Many investors are conned into believing that the bond provides some sort of protection. It doesn’t. Many investors are also conned into to thinking that the investments offered by the bond providers are “safe”. They aren’t necessarily – there may be some decent investments but there are also an awful lot of rubbish, expensive ones. But the biggest con of all is that the investor isn’t told that the annual bond charges (taken quarterly) will stay the same even if the portfolio value decreases. So, if the investor needs to withdraw some money from the bond, the charges will start to do some serious damage to the remaining fund. And if the investments fail – as many structured notes invariably do – and the portfolio value starts to decrease alarmingly – the bond charges will then erode what’s left very rapidly.
Some victims of serious mis-selling actually end up having the entire fund destroyed by irresponsible, fraudulent or disloyal investment advice by rogue advisers – and can still be paying the bond charges even after the entire portfolio has been destroyed.
The other half of the disloyalty and fraud by Continental Wealth Management (as well as some of the other well-known names in “wealth management”) is the practice of “churning”. This means that the same chunk of money is invested repeatedly to generate as much commission as possible – in as short a space of time as possible. This is easy to spot when looking at the bond statements (whether OMI/Quilter or RL360 or whatever):
“Buy £100k worth of rubbish (earn 6% commission); sell £100k worth of rubbish; buy another £100k worth of rubbish (earn another 6% commission); sell £100k worth of rubbish; buy”….and so on. This exercise can be repeated over and over again in any period – say one year – to mince two or three lots of commission out of the same sum of money. The investor may not notice – as long as his fund value isn’t falling too much – and, because the commissions are concealed, he may not realise he is being defrauded and that his adviser is committing a criminal offence by being “disloyal”.
The Continental Wealth Management case – being heard in the criminal court in Denia, Alicante – may not cure the ills of the offshore financial services industry overnight. But it will certainly send out a clear message to all financial advice firms that Spain, at least, will not tolerate such conduct. While British regulators, courts and police authorities are happy to leave fraudsters and scammers free to keep on operating and promoting financial scams, Spain is in the process of sending out a very clear message:
Coronavirus is a terrifying epidemic – just as the scamming and taxing of pension savers is an epidemic of equally-devastating proportions. Governments across the globe are putting in place extraordinary measures to stop the spread of Covid 19. Yet the British government, regulators and law enforcers have achieved nothing in terms of rescuing existing and preventing future pension scam victims.
Boris Johnson’s government has proved that laws can be changed overnight when necessary. All it needs is the recognition of the reason for the law change. Yet nothing has been done in ten years to change laws relating to pension scams, unauthorised payment charges and accompanying devasting financial consequences for victims.
Britain has had a series of no-hoper pensions ministers. “Pensions minister” seems to be a position where peculiar people are stuck in – as square pegs in round holes – so they are out of the way and can’t do too much damage (as in challenging the government over its shameful failure to tackle pension scams).
As the Coronavirus crisis escalates, millions of people will face financial hardship. Businesses will fold; jobs will be lost; pensions and investments will collapse. But HMRC will keep scrambling to tax the victims they caused in the first place – heaping more financial misery on victims whose pensions have been stolen.
Causes of pension scams must be thoroughly understood in order to recognise what must be done:
HMRC registers occupational pension schemes – even though there is no sponsoring employer which either employs anybody – or which exists at all
The Pensions Regulator registers occupational schemes – knowing the registrant is a serial scammer
HMRC keeps QROPS on the list even they know they are running outright scams and operating liberation
HMRC and tPR fail to warn ceding providers and the public when they suspect (or have evidence of) fraud
Ceding providers hand over £ millions to obvious pension scams without carrying out any due diligence
Serial scammers are left free to keep on scamming as the police, the SFO and the Insolvency Service do nothing effective to put them behind bars
Pensions and Treasury ministers do nothing to halt the avalanche of scams and the taxing of the victims
Opportunistic scammers in the UK and offshore devise ever-more crafty ways of relieving victims of their pensions
HMRC’s negligent role in pension scams is clearly illustrated in both the Ark and Salmon Enterprises cases. In 2010 and 2011, HMRC knew full well what the scammers – Stephen Ward and James Lau were up to. They met with Ark’s Stephen Ward and his pensions lawyer associate Alan Fowler in February 2011. HMRC also opened an enquiry into the schemes – but didn’t suspend the registration to stop them from attracting still more victims. At the time of their February 2011 meeting with Ward and Fowler, there was £7 million in the Ark schemes. By the time Dalriada was appointed, there was a further £20 million.
Between April and September 2010, HMRC had the administrators of the Salmon Enterprises arrested on suspicion of fraud – yet still they did not suspend the scheme or warn the public or ceding providers. During this period – and right up until well into 2011 – Salmon Enterprises remained a “valid” pension scheme with a PSTR registration number and nothing was done to stop more victims (such as Mr. R below) from being scammed out of their pensions.
There’s been well-meaning talk of an “amnesty” for fraud victims. But the problem is that won’t work unless fraud can be proven. And the British authorities have proved themselves to be inept and disinterested when it comes to convicting known fraudsters. It has been left to the Spanish criminal courts to charge Stephen Ward and Paul Clarke with fraud as there’s been no movement in the UK.
In Britain, however, the scammers mostly just carry on unchallenged. Even a police officer can’t get the police to prosecute; Action Fraud takes no action; Project Bloom is meaningless and does nothing; the FCA is a bad joke and the government couldn’t care less.
Below is a summary by a Salmon Enterprises victim of his appalling case. He has asked his MP to refer this to the Parliamentary Ombudsman. Hopefully both the MP and the ombudsman will do their jobs properly and get this sickening epidemic resolved once and for all. All the perpetrators (not just the scammers themselves but also HMRC and tPR – as well as the series of pensions and treasury ministers who have all failed in their duty to address this issue) need to be sanctioned. Most important of all, measures need to be put in place to prevent the same thing from happening again – that is what Mr. R and all his fellow victims want.
SALMON ENTERPRISES/TUDOR CAPITAL MANAGEMENT PENSION SCAM AND TAX PENALTY – by Mr. R:
“I had a National Grid and a CSC final salary pension scheme, after 35 years of service, which together totalled £528,447.25.
I was scammed out
of these pensions into the bogus Salmon Enterprises occupational scheme, which was registered by HMRC and tPR,
by an FCA-regulated adviser (now under investigation by the Insolvency Service
for fraud) in June 2011. I took out less than the 25% legally allowed after my
55th birthday. I’ve been forced to pay £37,956.79 in unauthorised
payment tax by HMRC.
TIMELINE:
28/8/09 – Salmon Enterprises occupational pension scheme registered by HMRC and tPR with Tudor Capital Management – TCML – (run by directors Andrew Meeson and Peter Bradley) as administrators.
07/4/10 – FSA wrote to tPR announcing a criminal investigation into Meeson, Bradley and TCML. HMRC wrote to tPR stating arrest warrants issued for TCML directors
08/4/10 – CPS obtained worldwide asset restraint order against TCML director Peter Spencer Bradley.
08/4/10 – tPR met to decide to suspend TCML as trustees/administrators.
29/4/10 – Peter & Alison Bradley (TCML directors) arrested on suspicion of fraud, money laundering and cheating the public revenue – although not for cheating the public.
30/4/10 – HMRC wrote to tPR with evidence of criminal investigation
07/9/10 – Andrew Meeson (TCML director) arrested
28/2/11 – HMRC wrote to tPR with details of ongoing criminal investigation, arrests made, draft report of offences and evidence submitted to Crown Court.
February 2011 – no warnings placed in public domain and HMRC refused to comment when asked by ceding providers to comment on the arrest and criminal investigation of the scheme administrators
May 2011 – I was introduced to IFA James Lau of Wightman Fletcher McCabe – FCA Reg 185570 – by two existing Salmon Enterprises members who had been offered commissions by James Lau for the introduction of new members
May 2011 – James Lau confirmed the scheme was registered by HMRC but did not inform me the administrators were under investigation for fraud
June 2011 – Tudor Capital Management sent transfer documents to national Grid and CSC.
June 2011 – National Grid transferred £454,647.25 and CSC transferred £73,800 to TCML – asking no questions about the provenance of the scheme, or directors/administrators or whether liberation was involved/intended
June 2011 – neither ceding provider checked the receiving scheme was bona fide before transferring £528,447.25
June 2011 – while HMRC and tPR were investigating Tudor Capital Management for fraud, neither did anything to warn ceding providers or the public
June 2011 – HMRC received a query from one suspicious ceding provider relating to Salmon Enterprises. HMRC’s Leigh Hands responded by quoting the registration number of the scheme – and gave no further details or warnings
June 2011 – HMRC received a second query from the same suspicious ceding provider seeking further clarification: “My concern is based on the fact that an article appeared in the pensions press on 21 October 2010 stating: Four people connected with TCML have been arrested on suspicion of fraud, cheating the public revenue and money laundering”.
HMRC responded: “I am unable to disclose any information regarding TCML due to our strict rules on confidentiality”. The transfer went ahead. And this was prior to my transfers going ahead on 15th July 2011 and 12th August 2011.
31/01/2012 and 1/03/2012 – £49,072 was released from my pension fund – approximately 9.3% of the fund value – after my 55th birthday (16/12/2011)
February 2013 – Received annual statement from the Salmon Enterprises scheme.
April 2015 – Received a tax assessment from HMRC claiming my £49,072 did not constitute a “valid” PCLS (Pension Commencement Lump Sum).
April 2015 – HMRC assessed me on a further £30,000 which I never received
March 2016 – Engaged Ms A. Brooks of Pension Life as my agent to appeal the tax assessment. The appeal went to the Tax Tribunals and did not succeed.
February 2020 – Paid in full the £37,956.79 tax assessment.
The remainder of my pension built up after a lifetime’s work – £479,375 – has been stolen by James Lau. I am not aware of any effort being made by any British authority to recover it.”
This personal account of the fraud committed against Mr. R raises a number of serious questions:
Why did neither HMRC nor tPR suspend the registration of the Salmon Enterprises scheme in April 2010 when the criminal investigation into the trustees was first launched – to prevent victims such as Mr. R from being scammed?
Why did the investigation into suspected fraud against the “Public Revenue” not extend to an urgent investigation into the “fraud against the public“?
After the State was reasonably prompt with the investigation, prosecution and jailing of Andrew Meeson and Peter Bradley, why was James Lau – the FCA-registered adviser who promoted and operated the Salmon Enterprises scheme – not simultaneously investigated, prosecuted and jailed?
Why didn’t the Pensions Regulator place the Salmon Enterprises scheme into the hands of a competent independent trustee immediately the fraud was suspected? Since 2011, there is no evidence that any effort has been made by any party to recover the £ millions stolen by James Lau, Andrew Meeson and Peter Bradley
Why has no pensions minister since 2010 raised any questions on the issues relating to the multiple failures of HMRC and tPR in the case of Tudor Capital Management and Salmon Enterprises? (Or, indeed, in the case of dozens of other pension scams). This shameful and negligent failure falls squarely on the shoulders of them all: Steve Webb; Iain Duncan-Smith; Ros Altman; Stephen Crabb; Damian Green; David Gauke; Esther McVey; Amber Rudd, Therese Coffey and Guy Opperman.
The shame of the above lazy, incompetent bunch of ministerial failures in charge of Britain’s pensions must also extend to three prime ministers: David Cameron, Theresa May, Boris Johnson. None of them have done anything about pension fraud – or even shown the slightest interest in intending to tackle it – beyond empty promises.
All the same questions raised about Tudor Capital Management and Salmon Enterprises must also be asked about the Ark scam. HMRC knew that Craig Tweedley and Stephen Ward and Co were operating and promoting what was probably pension liberation in the summer of 2010. Yet nothing was done until nearly 500 people had fallen victim to the scam and faced hefty losses and tax liabilities – as well as an agonising wait of at least ten years to find out their eventual fate and get a sniff of closure on this shameful episode.
In order to get a tax amnesty for fraud, there have to be investigations and convictions for fraud. The new trustees, Dalriada – appointed by tPR in May 2011 – didn’t feel it was “in their remit” to report the perps for fraud.
And so Craig Tweedley, Amanda Clarke, Andrew Hields, Andrew Isles, Geoff Mills, Jeremy Dening, Julian Hanson, Mark Ainsworth, Mark Tweedley, Michael Rotherforth, Stephen Ward, Richard Davies, Stephen Tennent, George Frost, Gary Collin, Anthony Salih, Paul Clarke and Alan Fowler remain at large. Not one of them has ever been brought to justice.
It may be that while some of the above players in the Ark scam were more guilty than others, it is a matter of record that Stephen Ward was the most prolific of all those flogging Ark and the “MPVA” reciprocal loan arrangement. Ward sold more than a third of the whole fund at £10,693,332 worth of transfers – followed by Julian Hanson at £5,330,525 and Jeremy Dening at £2,216,720. Dalriada’s failure to have any of these players investigated for fraud is shameful. It is also utterly astonishing that Andrew Isles – an accountant – was still flogging Ark even after he knew HMRC was sniffing around and that he was condemning his own clients to an unauthorised payment tax charge.
It is also a matter of record that Craig Tweedley, Stephen Ward, Alan Fowler and Andrew Isles continued operating and promoting Ark months after HMRC expressed their unease and suspicions – making no effort to stop the promotion and operation of the Ark schemes.
There are many questions to be asked about both the Salmon Enterprises and Ark scams. It would be good to think that complaints by the victims to their MPs will result in a bulk complaint to the Parliamentary Ombudsman. It would also be wonderful to think that an amnesty for fraud victims would be possible, but the question remains: who is going to have the fraudsters prosecuted? Dalriada Trustees says it is “watching with the interest” the prosecution of Stephen Ward and Paul Clarke for fraud (on an entirely different case involving an unconnected scam in Spain). But this purported “interest” has yet to become intense enough to provoke a simple phone call to ask how it is all going (or how they could do the same thing themselves).
I still wish that tPR had appointed an independent trustee to the Salmon Enterprises scheme. All the victims – such as Mr. R – would also like to know the answer to that burning question. But they are also painfully aware that tPR-appointed independent trusteeship isn’t without its own problems. In the Ark case, Dalriada has taken far more money out of the funds than the scammers ever did, and the members still to this day – after nine years – don’t have a sniff of ever getting their pension funds transferred into a proper pension scheme. But at least they know that what little is left is “relatively” safe and the only risk to it is the possibility of another nine years of Dalriada at the helm and another £7 million being spent on trustees’ and legal fees.
Mr. R is in contact with some other victims of the Salmon Enterprises scam. They are all planning on submitting summaries and complaints to their MPs and asking them to refer the matter to the Parliamentary Ombudsman. Ark victims have tried contacting their MPs and pensions ministers for many years, but not one single MP or minister has ever engaged with the process of an ombudsman complaint against HMRC and tPR. Perhaps that will now change – as all MPs and ministers are now working from home and will no longer have to spend so much time travelling to and from the House of Commons.
Coronavirus has taught us an important lesson: the law must be about safety and justice – and must be changed quickly when a crisis arises. Pension fraud has been an epidemic for ten years – and now the law must finally be changed QUICKLY so that the perpetrators of pension scams are brought to justice.
Scams, and the lack of an active regulator in place to ensure their non-proliferation, undermine the reputation of the industry itself – and of any decent advisers out there.
