Tag: Structured Notes

Expats and Brexit – Safeguard your pension

BREXIT is the question on everybody’s lips at the moment. BREXIT: will we? won´t we? deal? no deal? So many unanswered questions and so much scaremongering. We would like to offer some helpful words and hopefully protect you from making rash decisions. This could help you to safeguard your pension. Many scammers are trying to cash in on Brexit – make sure sure you’re not their next victim.

Remember I am not a financial adviser. I am a blogger, and I write about financial crime. I provide information about past scams and on how to avoid falling victim to new scams – especially pension scams. The words I write are aimed to help you safeguard your pension from the many offshore scammers.

So, Expats, what does Brexit mean for your pension rights? The short answer is that we really do not know! There are currently lots of “coulds” and “mights” being thrown around, but no certainties. And herein lies the risk that you and your pension could fall victim to a scam with all this scaremongering.

We are seeing a lot of adverts for expats to transfer into a QROPS before the dreaded 11pm on March 29, 2019. One company I have noticed that seems to be using Brexit to attract customers is Spectrum IFA. Back on 1st July 2018, we wrote a qualified and registered blog about Spectrum IFA. They didn´t do too well.

Firstly, despite Spectrum IFA advertising themselves as “international financial advisers”, with some digging we were able to find out that they DO NOT in fact have an investment licence. This means they are not legally allowed to advise on pensions or investments. Secondly, they scored rather poorly on the qualified and registered percentage too. Out of the 16 advisers we checked up on, only four were registered with the appropriate institutes. The rest came up red – meaning the institute had no record of them.

Worrying isn´t it? Offshore companies can try to claim they are international financial advisers, but actually be unregulated and unqualified to carry out the very service they offer! The “advisory” firms have flash websites, and some have several offices around Europe and beyond. Their PR is great at scaremongering expats about their pension investments in the lead up to Brexit.

In Spectrum’s ´Deal or no deal´ article number 14, they suggest you marry a Spaniard in order to prepare for Brexit. I´m not sure about you, but I feel that getting hitched to a native to be able to stay in Spain is a pretty drastic measure and definitely more than a little illegal.

Spectrum IFA is just one example of a firm that probably ought to be given a wide berth when transferring your precious pension fund offshore. Safeguard your pension by avoiding unregulated and unqualified firms like this one.

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It may seem daunting when you read that your UK pension could be subjected to extra taxes if we leave the EU on a no-deal basis. You may be thinking that you should transfer into a QROPS quickly, to save on these taxes. But what you really need to know is that a QROPS is not without punitive costs of its own. They can be expensive and unless you have a good lump sum to transfer you could see a huge chunk of your pension pot taken in transfer and set-up fees anyway! Potentially making you worse off.

Unfortunately, until we make a deal or actually go through with Brexit, nothing is very clear for expats. Which leaves us in an uncertain time and situation. This, I understand, may be daunting for many people, but I urge you to take a deep breath before considering any speedy offshore pension transfers. Thousands of people – especially those who have already fallen victim to scammers such as Continental Wealth Management – would give you exactly the same urgent advice.

If you do want to transfer your pension, please heed this advice to safeguard your pension:

Make sure you choose a reputable firm – one that is regulated, insured and employs fully qualified (and registered) advisers.

We did a series of blogs last year on offshore companies and their advisers. The results were extremely worrying. Aside from their blatant disregard for the necessity of these qualifications – due to being offshore – the number of unqualified advisers offshore was cause for serious concern. Many of the firms had not one single qualified and registered adviser on their team.

Qualified & registered? We do not need to be – we are offshore!

Know all the correct questions to ask an adviser before you sign on the dotted line.

A reputable firm will have a fact-find procedure, and adhere to a client’s risk profile.

A reputable firm will have compliance procedure.

A reputable firm will have clear and consistent explanations and justifications for the use of insurance bonds.

Where will your funds be invested, and how will you know if this is in line with your risk profile?

A pension fund should be placed into a low-medium risk investment.

Scammers tend to go for high-risk, professional-investor-only investments as they offer them the best commissions. But a pension fund should have more protection than this. Avoid investments that involve structured notes (like CWM´s Blue Chip notes), UCIS funds (like Blackmore Global), in-house funds, non-standard assets and any ongoing commission-paying investments.

Insurance bonds – often used by scammers – are usually an unnecessary double wrapper on your fund, that costs you more in fees and charges than a straightforward platform, lining the pockets of the scammers – but making your fund smaller.

How much will the fees and charges be? Remember NO pension transfer is free.

Legitimate firms will normally have a small transfer charge and a small annual fee.

Scammers will often be vague about fees and charges, and avoid giving you a straight answer so they can cover up the true figures. These hidden figures can see your pension fund decrease by 25% or even more in some cases.

A reputable firm should offer you regular updates on the progress of your fund.

You should receive an annual review and a quarterly update showing the fees, charges and growth of your fund.

If your new firm and adviser fail to do this, alarm bells should ring loudly.

Finally, a reputable company will publish evidence to show records of complaints made, rejected or upheld and redress paid.

If the adviser cannot show you all this information, do not trust them.

If it all sounds to good to be true, it probably is – RUN!

Safeguard your pension from the scammers

January 7, 2019
High Court finally winds up the truffle saga pension scam

This could possibly be described as wonderful news for the victims of Viceroy Jones New Tech Ltd, Viceroy Jones Overseas PCC Limited, Westcountrytruffles Limited, Truffle Sales Ltd and Credit Free Limited. Or maybe not. The whereabouts of the funds is unknown. This pension liberation and investment scam saw 100 investors conned out of £9m of their pension savings.

The full story can be read here:

https://www.ftadviser.com/pensions/2018/12/13/companies-behind-9m-pension-truffle-scam-shut-down/?utm_campaign=FTAdviser+news&utm_source=emailCampaign&utm_medium=email&utm_content=

In short, Viceroy Jones used unregulated financial advisory firms to persuade victims to invest in ‘high-value truffles for commercial sales’. With the promise of high returns on this fixed-term investment (lasting 15 years), investors believed they would reap the benefits once the truffles were harvested.

No truffles were ever harvested.

In reality, the investment saw most of the £9m of funds invested being paid into offshore bank accounts. These funds were then paid out in high commissions to the unregulated advisers who mis-sold the scheme. No supporting documents have been found regarding these investments, so the whereabouts of any remaining funds is unknown.

As I said above, it is only possibly wonderful news for the victims. Whilst the company has been wound up, the victims have been promised no compensation and do not know where their money is. This is a not an uncommon situation in scams like these. The victims of Peter Moat’s company – Fast Pensions, also do not know where their funds have gone.

Cheryl Lambert, Chief Investigator for the Insolvency Service, said:

“We take the matter of unregulated pension liberation investment schemes very seriously and will take action to stop any such schemes who have acted unscrupulously.”

However, I feel I have to disagree.

What message does the Insolvency Service send?!?

Are the perpetrators behind bars? NO!

Are the perpetrators having all their assets frozen and liquidated to pay the victim’s back? NO!

Are the perpetrators facing life without a pension? I DOUBT IT!

Are the perpetrators sorry for what they did? I DOUBT IT!

There is a long list of other pensions scammers who have scammed millions out of the public and still walk freely, creating new scam after new scam.

But to name a few of the scammers:

XXXX XXXX

Stephen Ward

Peter and Sara Moat

Phillip Nunn

David Vilka

Some of the scams they have sold:

Ark pension liberation scam

Capita Oak

Continental Wealth Management

Blackmore Global Fund

Fast Pensions

See our blog on the Top 10 Deadliest Pension Scammers.

Winding up these companies is often of little help to the scam victims. What is left of their funds (if any) is passed on to another trustee (often Dalriada) to deal with the ‘clean up’. This action, however, is not without cost and often the funds just sit there doing nothing.

Take the Ark victims whose schemes were transferred to Dalriada – they have not had any compensation in the seven and a half years Dalriada has acted as their trustees. Dalriada, however, has continued – without fail – to charge their yearly fees and costs, further decimating the victims’ funds. AND without any suggestion of what will happen next!

Furthermore, victims that fell prey to these scams, face more stress as they are also contending with HMRC. The Taxman is sending out demands for huge tax bills, as they claim the money the victims liberated (“borrowed”) from the Ark schemes was not tax free. 55% tax is applied to money that was liberated from pension funds – this is deemed an “unauthorised payment charge” by HMRC.

The High Court needs to do a lot more than this, to send a clear message to these scammers. Prosecutions, jail sentences and large fines would be a good start.

All enquiries concerning the affairs of the companies should be made to: The Official Receiver, Public Interest Unit, 4 Abbey Orchard Street, London, SW1P 2HT. Telephone: 0207 637 1110, Email: piu.or@insolvency.gsi.gov.uk.

Cartoon blog – Don’t be the next pension scam victim

December 18, 2018
Nitwit or Dragonfly? Gambling or Investing?

Nitwit or Dragonfly? Gambling or Investing? Are investment losses as a result of a bad adviser or a bad investment? Or both? The real question is: how does the consumer tell the difference? A favourite episode of Fawlty Towers involved Basil’s ill-fated bet on a racehorse called Dragonfly. Confusion sets in – fuelled by the easily-confused Manuel – and “Dragonfly” gets muddled up with “Nitwit”. And that is how clients get confused just as easily: by advisers who spout the usual rubbish: capital protected; guaranteed returns; blue-chip investments; solid providers etc. They just leave out the three most important things: the fat commissions paid to the adviser; the high-risk nature of the “investment” and the fact that structured notes are FOR PROFESSIONAL INVESTORS ONLY (and not for retail investors).

Equally befuddled – but much less funny – this past few days, has been a bunch of nitwits posing as financial experts on Linkedin. Almost as barmy as Basil and Manuel, these comedians don’t know the difference between investing and gambling. Graham Bentley of a firm called gbi2 has been suggesting that structured notes should be revisited as viable “investments” for valued clients.

Bentley has suggested that structured products are an option that advisers could consider including in their portfolio of investment solutions. If he is talking about outright scammers, then – of course – he is right. Structured products pay juicy commissions of up to 8%, so naturally they are a favoured product for these criminals to sell. Plus, if the clients themselves have so much money they are desperate to get rid of as much of it as possible, as quickly as possible, then structured products are ideal.

But Bentley is missing the point entirely. Structured products have, for years, been sold enthusiastically and aggressively by the usual suspects: Leonteq, Nomura, Commerzbank, Royal Bank of Canada and BNP Paribas; bought by scammers such as Continental Wealth Management for the juicy commissions; harboured by crooked life offices such as Old Mutual International. And the result has been huge losses for hundreds of victims. In some cases, total destruction of a victim’s life savings.

Most advisers who sell these toxic products are too thick to understand how they work – and indeed anything beyond the amount of commission they earn out of flogging them is way too tricky to get their simple minds around. And why should they even bother? They just sell them, collect their 8% and then move on to the next victim. What’s to understand? They know that life offices love them – and indeed Old Mutual International bought £94 million worth of the fraudulent Leonteq ones alone. It is a delightful circle for all concerned: the scammers get rich, the bent life offices get fat and the structured product providers do very nicely thank you. And not a single one of them gives a second thought for the victims.

One cheerful idiot on the Linkedin thread has enthusiastically supported Bentley’s idiotic view:

Mark Coomber, Chartered MCSI Independent Financial Planner at Plutus Wealth Management

“Continue to use structured products (as part of portfolios) both personally and for clients with great success. Most of the negative comments I read about them are born out of ignorance and sheer laziness of some advisers who cannot be bothered to either learn the topic matter or undertake the relevant due diligence.”

And this guy is chartered! As a member of the CISI he should know better than to spout such rubbish – and I feel deeply sorry for any clients of Plutus Wealth Management as they are clearly in danger of being sold these toxic products. In fact, I would go further and suggest the public should be warned about the dangers of using this firm, as Coomber clearly has every intention of flogging his victims these high-risk products. If he is stupid enough to use them for his own gambling fun, good luck to him. But he has no right to inflict them on retail clients.

One of the fraudulent structured notes sold by Leonteq (for 8% commissions to the scammers) was:

Capital Protection on WTI Crude Oil with a Reference Bond (PDVSA)
100.00% Contingent Capital Protection | Credit Risk of Reference Bond Issuer | 5.00% p.a. Guaranteed
Coupon | 6.00% p.a. Conditional Coupon
ISIN CH0234862669 | Swiss Security Number 23486266
Final Fixing Date 20/03/2019

The term sheet did, to be fair, give a clear warning:

“Given the complexity of the terms and conditions of this Product an investment is suitable only for experienced Investors who understand and are in a position to evaluate the risks associated with it.”

Sadly, we have to wait until March 2019 to find out how many victims have lost their shirts on this particular lame horse.

And this is the problem: most advisers don’t understand structured products themselves – all they understand (and care about) is the fat commission. They certainly don’t care that the products are fraudulent. But, more importantly, none of these rogue advisers’ clients are experienced investors. If they were, they wouldn’t be paying a greedy and irresponsible financial adviser to risk their hard-earned life savings for them.

STRUCTURED NOTES ARE GAMBLING – NOT INVESTING!

So my message to Coomber and Bentley is this: read Leonteq’s term sheet:

“Products involve a high degree of risk, including the potential risk of expiring worthless. Potential Investors should be prepared in certain circumstances to sustain a total loss of the capital invested to purchase this Product.” And then try to decide which horse is going to win: Dragonfly or Nitwit.

October 3, 2018
CWM CONference

All victims of the Continental Wealth Management pension scam will agree – this kind of disaster must never be allowed to happen again. Here´s Pension Life´s take on what happened in the CWM CONference given by Darren Kirby.

The CWM advisers. . . Dean Stogsdill * Alan Gorringe * Richard Peasley * Neil Hathaway, but to name a few. . . lied about charges; lied about investment “guarantees” and growth; lied about structured note losses (“don’t worry – they are only paper losses”); lied about the firm’s regulation.

Through a series of cold calls and personal house visits, they were able to persuade the victims into trusting them with their hard-earned pension pots. Aided and abetted by Stephen Ward of Premier Pension Solutions – who provided the initial transfer advice – CWM brought financial ruin to hundreds of victims.

The rogue “advisers” of CWM, forged clients’ signatures on dealing instructions and conned hundreds of victims in Spain, France, Portugal and beyond into transferring their safe, UK-based pensions into this dreadful scam, which was bound to lose some, most of or all of the money in each victim’s pension fund.

Trustees and insurance companies must never give these kinds of firms terms of business again. Old Mutual International (OMI), facilitated the fraud, paid commissions/fees to CWM who not only held no investment licence – but also held no license of any kind. Furthermore, OMI continue to apply crippling fees to these ever decreasing and totally unsuitable investments they made. SEB also acted as facilitators to this heinous crime.

These so-called advisers must never be allowed to work in financial services again. However, the sorry truth is that they all are still working AND they are still scamming!! Raising awareness on how scammers work and how to avoid being scammed, seems to be the only defense we currently have.

Pension Life will continue to speak out against these companies – the public must be warned – loudly and publicly. Scams like the Continental Wealth Management (CWM CONference) disaster must be stopped!

SCAMMERS ARE CRIMINALS!!!

September 6, 2018
YET ANOTHER STRUCTURED NOTE SCAM BY OLD MUTUAL INTERNATIONAL

ROLL UP! ROLL UP! ME HEARTY SCAMMERS! OMI’S LATEST STRUCTURED NOTE SCAM IS ONLY AVAILABLE UNTIL SEPTEMBER 28TH SO GET A JIGGLE ON WHILE STOCKS OF THIS TOXIC CRAP LAST! WE ARE PROUD TO OFFER OUR VALUED SCAMMERS YET ANOTHER INVESTMENT SCAM

BY OLD MUTUAL INTERNATIONAL.

This wonderful investment scamming opportunity with OMI, is open to all scammers – you need no qualifications and don’t have to be regulated. If you want a bit of training in how to sell this rubbish inappropriate structured product to as many victims as possible, we can give you a quick five-minute whisper behind the bike shed. But, trust me, it is easypeasylemonsqueezy – just lie. Tell the victims about the “guaranteed 10% return” bit, but don’t tell them about the “capital at risk” bit.

So, what are you waiting for? You’ll earn 8% by selling your victims a useless OMI “PORTFOLIO” bond (don’t mention this is illegal in Spain) and then a further 8% from selling this toxic, high-risk BNP Paribas structured note (rubbish inappropriate structured product) which will tie your victims in for six years.

This will give you plenty of time to explain away the losses as “only secondary market values” or “only paper losses”. And by the time your victims realise what you’ve done to them, you’ll be long gone. And most of them will commit suicide anyway, so they won’t be coming after you any time soon.

BNP Paribas has a good reputation as being an ethical, solid company so that will certainly help you with sell these inappropriate structured products. Just remember, tell the victims as little as possible about this product and hide the commissions you will earn – they will never find out and by the time their life savings have all gone up in smoke you will be sunning yourself on a Caribbean island, far away from the misery of those whose retirement income you will have destroyed.

If the victims are ever organised enough to band together and form a group action, I’ll just promise to pay redress for their losses, organise a meeting and then cancel it at the last minute. That ought to buy you enough time to make your getaway.

Happy scamming – smiley face. Love from Pete

p.s. BTW, don’t worry about the email below the Mad Woman of Spain has sent out – most of the new victims will never have heard of her and by the time they do, it will be too late. You’ve only got until 28th September to scam as many suckers as possible, so don’t just stand there – SCAM AWAY ME HEARTIES!

p.p.s. Don’t worry about my quote about inappropriate structured products – I was just lying (something I’m pretty good at). With the announcement of new regulations in Malta for QROPS, International Adviser has quoted managing director of OMI (soon to be Quilter) Peter Kenny: “Old Mutual International is encouraging all market participants to help rid the industry of inappropriate structured products”

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ATTENTION PAUL EVANS – Head of Region – Middle East & Africa
Old Mutual International (International Structured Scam Specialists)

intmarketing@engage.omwealth.com

1st September 2018

Paul, are you completely mad? OMI has been offering and buying inappropriate structured products for years and facilitating financial crime by scammers such as Continental Wealth Management. OMI bought £94 million worth of fraudulent notes by Leonteq – which paid the scammers an extra 2% in commission. So you must have been accepting business and investment instructions from other scammers besides CWM for at least six years between 2012 and 2016 – as well as for years prior to and subsequent to this period.

And now you are offering more structured notes so scammers can line their pockets and ruin more victims? Read your own marketing material Mate:

“An autocall product with a six-year term paying at least 10% a year in USD or at least 7% a year in GBP. This is a capital at risk product.”

You are a pathetic and revolting human being. Which bit of CAPITAL AT RISK don’t you understand?? OMI has already disgraced itself by offering, buying and selling these totally inappropriate structured products – scam products -, and caused millions of pounds’ worth of destruction to innocent victims’ life savings.

You, Peter Kenny, Steve Braudo and Paul Feeney are all as bad as each other – and none of you should be working in financial services. Your conduct is utterly sickening: you are now proposing to ruin more lives and you still haven’t paid compensation for the lives you have destroyed already.

How much commission are you paying the scammers on these toxic products? 6%? 8%? 10%?

Instead of behaving with decency and dignity and honouring Old Mutual International’s promise to pay redress for OMI’s past failures, you are now preparing to launch a whole new tranche of financial crime and inappropriate structured products.

You are all disgusting and this needs to be exposed and all of you outed for the evil scum you are.

Angie

From: Paul Evans – Old Mutual International <intmarketing@engage.omwealth.com>
Subject: Competitive, transparent, simple – new tranche of structured products

September 1, 2018
Structured notes – knowing the risks

In many pension scams, we see the use of totally unsuitable, high-risk, for-professional-investor-only structured notes. These notes often offer the introducer high commissions. However, they are risky, fixed-term investments that often end in the loss of some – or even all – of the fund invested. Therefore, these types of investments are totally unsuitable for a pension fund. Firstly, let me explain what a structured note is, and then we can go through structured notes – knowing the risks.

So what the hell are structured notes? And why should retail investors say NO to them?

A structured note is an IOU from an investment bank that uses derivatives to create exposure to one or more investments. For example, you can have a structured note betting on the S&P 500 Price Index, the Emerging Market Price Index, or both. The combinations are almost limitless.

A pension fund is referred to as a retail investment, so it should be placed in a low to medium risk investment. Generally, structured notes are labeled high-risk, for professional investors only and, therefore, no pension fund should ever be invested into them.

Structured notes are frequently peddled by less-scrupulous financial advisers – as well as outright scammers – as a “high-yield, low-risk”, supposedly backdoor way to own stocks. However, regulators have warned that investors can get burned – which they frequently do. If the investment banks can flog it, they will make just about any toxic cocktail you can dream up. In reality, a structured note is an unsecured debt issued by a bank or brokerage firm – and the amount of money the investor might (or might not) get back is pegged to the performance of stocks or broad market indexes.

Say NO to structured notes for pensions!

With structured notes, there is no capital protection; no flexibility; no portfolio enhancement; no increased returns and no limit to the risk of loss of capital.

In the case of CWM, 1,000 people with 100 million pounds, were invested in structured notes and many of them lost large chunks of their funds. The CWM scam, headed by Darren Kirby, used structured notes with Commerzbank, Nomura, RBC and Leonteq, and many of the notes crashed.

John Rodgers fell victim to the CWM scam after being cold called by a salesman called Dean Stogsdill . His £202,000 pension pot was invested into high-risk, professional-investor-only structured notes referred to as “Blue Chip Notes”. Today John’s pension fund is worth just £60,000 (if he is lucky).

OMI help facilitate the unqualified, unlicensed and unregulated CWM scammers – victims of this scam were also tied into a useless, pointless insurance bond for ten years – courtesy of OMI. Whilst the value of these pension funds steadily plummeted, OMI stood idly by and watched it happen.

In the case of the Continental Wealth Management scam, the life offices – Old Mutual International, SEB and Generali, invested up to 1,000 victims’ life savings in structured notes. The majority of these toxic notes were from Commerzbank, Royal Bank of Canada, Nomura and Leonteq – some of which were, allegedly, fraudulent. Victims are facing huge losses – and a few have had their retirement savings wiped out entirely and a couple are now in negative territory due to the parasitic life offices continuing to take their quarterly fees (based on the original investment) as the investors are trapped into these spurious “bonds” for up to ten years.

We are now fighting to get the investors’ money back. But meanwhile, we must stress: do not use an advisory firm that uses structured notes. These toxic instruments are only for professional investors and should not EVER be used for ordinary, retail investors.

August 14, 2018
WANTED: MAGIC FAIRY TO CURE WHAT’S WRONG WITH FINANCIAL SERVICES OFFSHORE

Humour me – you may consider me to be naive – but I believe that the ills of financial services (especially offshore) can be put right. All it takes is for the ethical stakeholders to outlaw the unethical ones. Yes, it will be a bit like something out of the Old Testament – but I firmly believe it can be done. And, more importantly, it MUST be done.

So many thousands of victims have lost part or all of their life savings already – and these people must be compensated. But, above all, future victims must be prevented.

Here’s my TOP TEN wishes that I want the Magic Financial Services Fairy to grant (as a matter of urgency):

Governments in the UK and all expat jurisdictions must wake up to scams – both offshore and at home. They must empower/galvanise law-enforcement agencies and give them the resources to tackle financial crime.

Regulators must put together effective regulations – and then ENFORCE them. Regulations on their own are worthless and pointless – the industry must be policed and failure to comply with regulations must be severely sanctioned.

Ceding pension providers must stop handing over thousands of pension transfers to scammers. The Scorpion campaign has had a negligible effect and all leading providers are still at it.

Advisory firms must be regulated – and not just for insurance. If all a firm does is sell insurance, that is fine. But if pension and investment advice is given, the firm must be properly regulated.

Advisers must be appropriately qualified. If they don’t have the right qualifications, they must demonstrate that they are studying and aiming to qualify within a reasonable, pre-determined time frame.

Investors with DB scheme transfers must get proper advice – avoiding flimflam which takes no responsibility for the end result of the transfer. QROPS providers must ensure they only accept business from regulated firms.

QROPS providers must also ensure they have understood and verified the members’ risk profiles – and then ensure that any investments made on behalf of those members are in line with their risk profile.

Life offices must stop accepting business from known scammers and unregulated firms – and cease investing victims’ life savings in unsuitable assets – such as structured notes and UCIS funds.

Life offices must pay redress to their victims for investment losses caused by negligence and fraud.

There must be a quality assurance system to which all offshore advisers, life offices, trustees and fund managers subscribe and adhere.

July 29, 2018
OLD MUTUAL INTERNATIONAL V LEONTEQ CASE MOVED TO LONDON

Old Mutual International filed a High Court application on 16^th March 2018.

On 20.3.18, Old Mutual obtained a judgment in the High Court of Justice of the Isle of Man (Case Reference 18/0012). His Honour The Deemster Doyle, First Deemster and Clerk of the Rolls delivered his determination to OMI’s lawyer, Elizabeth Simpson of Simcocks.

But now Leonteq has been successful in having the proceedings transferred from the IoM to London. This will considerably help Leonteq and hinder OMI.

OMI’s case is that they are the victims of a fraud. Between 2012 and 2016, OMI invested approximately £200,000,000 in structured notes sold by Leonteq. The purchase of these notes was “conducted” on the truthfulness of representations made by Leonteq as to the amount of fees and costs to be deducted from the investments. OMI’s case is that what Leonteq claimed was false and fraudulent. The investments performed poorly as a result of the excessive level of fees. The losses are currently estimated to be well over £20,000,000 (although it is expected that this will increase – especially with the current devasting share price falls due to Covid 19).

OMI’s case against Leonteq is on the basis of fraudulent misrepresentation, conspiracy, constructive trust, breach of fiduciary duty, knowing receipt, dishonest assistance and unjust enrichment.

Let us look in some detail at the above aspects of the case.

Leonteq Securities has gone from strength to strength since this fraud began – despite the disgrace of this criminal matter. Their net profit in the first half of 2018 was declared as £30.73 million, and turnover £104.31 million – up 36% on the previous year. My first question is: are they still selling ultra high-risk structured notes? My second question is: what was the difference between the “ordinary” notes which paid 6% commission to the scammers, and the fraudulent notes which paid 8% to the scammers. Were the latter 33% more risky? Looking at the victims’ statements, it is impossible to tell the difference between the 6% notes and the 8% ones. There is no obvious higher failure rate – they just all look equally dire.

Right in the middle of the OMI/Leonteq matter, it was announced in 2014 that two salesmen were going to be added to the London branch: Walter Treur and Anders Stromberg joined on 25/27 June 2014. Treur was ex Commerzbank – another provider of toxic structured notes which also failed dismally and caused catastrophic losses to the Continental Wealth Management’s victims – and Stromberg was ex JP Morgan and Credit Suisse (although he had been unemployed for some time).

Another Leonteq employee, Michael Hartweg, left his job as deputy chief executive to spend all his time flogging the new business of toxic structured notes.

So, it is clear that Leonteq was making a lot of money out of these products. But, the question remains: was Leonteq complicit in fraud – or were they blissfully ignorant and just grateful for the huge profits they were pulling in?

In my humble view, structured notes are like a lot of other products which – if properly sold and used – can, in some cases, be beneficial/useful/enjoyable/harmless, but – if irresponsibly or inappropriately sold – can be deadly. Examples are: tobacco; alcohol; pornography; rat poison; fireworks; painkillers; kitchen knives; peanuts; plastic bags; cannabis.

Structured notes are “FOR PROFESSIONAL INVESTORS ONLY AND NOT FOR RETAIL DISTRIBUTION AND WARN OF DANGER OF LOSING PART OR ALL OF AN INVESTOR’S CAPITAL”.

I wonder which bit of that OMI failed to understand. They bought £200 million quid’s worth of the fraudulent 8% notes – how much of the 6% ones did they buy? We know that a large chunk of these went to the Continental Wealth victims and caused devastating losses. But that was just Leonteq – there was also Commerzbank, Royal Bank of Canada, Nomura and BNP Paribas. And there wasn’t just OMI – there was SEB and Generali doing the same thing.

Let’s be honest, the whole thing was a fraud. In the Continental Wealth Management case, CWM was a fraud; the structured notes were a fraud; the insurance bonds were a fraud; the hidden commissions on everything were a fraud. No party comes out of this with any honour. But, we must also bear in mind that OMI bought £200,000,000 of this toxic, fraudulent crap and allowed it to be used as investments for retail, low-risk pension savers. Additionally, OMI accepted dealing instructions from an unregulated firm which was selling the insurance bonds illegally. But let us not forget that Generali and SEB were just as bad.

Maybe Leonteq and OMI will volunteer to settle without a bloody legal battle – from which only the blood-sucking lawyers will win. The millions that both Leonteq and OMI will be paying over the coming months and years would be better spent on paying redress to the real victims in this disgraceful debacle – the Continental Wealth Management clients who entrusted their life savings to the scammers, the life offices and the structured note providers such as Leonteq – but let’s not forget Commerzbank, Royal Bank of Canada and Nomura.

July 21, 2018
Woodbrook Group – qualified and registered?

If you have been following Pension Life´s blogs, you will know that we have been conducting a series of investigations into qualified and registered financial advisers in various firms. Today is Woodbrook Group – qualified and registered? See question 5 on our blog about the ten essential questions to ask any advisory firm you are considering using:

10 essential questions to ask an IFA

IFAs and their clients are invited to add to it, correct it, improve it. Here’s a link to the three registers if you want to double check:

http://www.cii.co.uk/web/app/membersearch/MemberSearch.aspx

https://www.cisi.org/cisiweb2/cisi-website/join-us/cisi-member-directory

https://www.libf.ac.uk/members-and-alumni/sps-and-cpd-register – Claim to a DipFA

Here’s what Woodbrook Group say about themselves:

“Woodbrook Group is an international firm of financial advisors. We are proud to be independent as we are not owned by any financial institution or life insurance company. This makes us different from the majority of financial advisory companies which means we offer you unbiased and impartial advice.

Every individual has unique dynamics, goals and attitude to risk. Our team of highly experienced financial consultants can help you to identify your personal needs and devise professional solutions and services that are customized to your unique situation, objectives and goals.

Woodbrook Group is licensed to provide the investment services of investment advice.”

Woodbrook Group advisers – qualified and registered?

Despite stating the company operates in 30 different countries, I was unable to find any list detailing the members of their advisory team. They do, however, state that Woodbrook Group is authorised and regulated by the Cyprus Securities and Exchange Commission (No: 297/16) and subject to the requirements of the EU’s Markets in Financial Instruments Directive (MiFID).

I found three names connected to this company via their website media page: Michael Doherty, who states he is the CEO; Andrew Heath, who is listed as office manager in Spain; Mark Slevin, listed for Cyprus office.

Michael Doherty – CEO – no financial qualifications listed – two people called Michael Doherty appear on the CII register with DipPFS so there´s a possibility he could be one of them – although I doubt it as one is based in Manchester and the other in Chester:

http://www.cii.co.uk/web/app/membersearch/MemberSearch.aspx?endstem=1&q=n&n=michael+doherty&c=&ch=0&p=0

Andrew Heath – Country Manager Spain – spent the last 15 years providing Financial Offshore solutions however there is no mention of ANY financial qualifications

Mark Slevin – Regional Manager – Cyprus office – not listed on any of the three registers

However, through Linkedin, I have found further employees who are listed as purportedly working for Woodbrook Group.

I will, therefore, use this list for Woodbrook Group “advisers” – qualified and registered. However, the biggest concern about Woodbrook is that it is promoting structured products. Victims of the Continental Wealth Management scam will undoubtedly join in the warning about any adviser that uses structured notes as these are for professional investors only and are very risky. Of course, structured note providers do pay handsome introduction commissions of up to 8% (for the fraudulent Leonteq ones) – and that is one compelling reason to avoid any advisory firms which use these products.

https://www.linkedin.com/search/results/people/?facetCurrentCompany=%5B%226237866%22%5D

Woodbrook Group advisers – qualified and registered? Employee list:

Hamaza Ali Kahn – Business Development Manager – Masters degree in Marketing Management no financial qualifications

Michael Allen MBA – Senior Business Development Manager – claims he advises in UK Pensions Transfer (QROPS) – No mention of any financial qualifications only business qualifications

Bálint Andrea – Partner Hungary and Slovakia – qualifications claimed – The Open University Postgraduate Finance, General

Robert Bennett – Senior Wealth Manager – claims CII but only to level 3 (need level 4 plus for Pension advice)

Graeme Blyth – Senior Consultant – Marbella – previous position include Wealth Manager – No mention of any financial qualifications

Sławomir Boguta – Financial ial Consultant Warsaw – qualifications claimed MBA, Marketing Management – No financial qualifications claimed

Andrew Broadband – Financial coordinator – Education states ‘some college’ no mention of any financial qualifications

Christina Doherty – Director – No financial qualifications claimed

Florin Dragan – Financial Consultant – qualifications claimed BBA, work history in sales -No financial qualifications claimed

Mark Dudgeon – Wealth Manager Cyprus – claims CISI – DOES NOT APPEAR ON THE REGISTER

Constantinos Fieros – Independent Financial Adviser – claims an MBA but no financial qualifications

Steven A Green – Financial Consultant palm area – qualifications claimed: Chartered Institute of House – No mention of any financial qualifications

Bert Grobler CISI – Financial Consultant – claims a qualification in CISI – Does appear on the register as Gysbert Grobler ACSI – WELL DONE Bert!

Terry Heath – Business Development Manager – claims qualifications in science and geography, no mention of financial qualifications

Adel Jones – Financial Consultant Hungry – specialities life savings, pensions… – No financial qualifications claimed

Tomas Koolhaas CISI – Business Development Lead CEE – claims a Masters Degree,
University of Amsterdam Finance and Financial Management Services and CISI – DOES NOT APPEAR ON THE CISI REGISTER

Josh Melcher – Senior Financial Consultant Hungary – Strong finance professional graduated from Algonquin College, no mention of official financial qualifications

Senan Mc Gonigle FCA – Country Director Cyprus – claims FCA – was unable to check claim through the website: https://www.charteredaccountants.ie

Maria Milaj – Group Compliance Officer, Cyprus – previous positions include Pensions Expert – qualifications claimed Budapest Business School – Finance and Accounting.

James Peoples – Business Development – MSC in Social sciences NO financial qualifications

Jason Truesdale – Country Manager Hungary, Slovakia and Croatia – No financial qualifications claimed

Jacob Walters -Senior Partner (Europe) & Head of UK pension transfer Division – claims a host of financial qualifications including CISI – DOES NOT APPEAR ON CISI REGISTER

Omer Zahid – Business Development Manager – No mention of any financial qualifications

Woodbrook Group advisers – qualified and registerered. Just 1/26

July 11, 2018
UAE REGULATOR DOES A BIT OF REGULATING

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

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

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

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

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

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

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

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

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

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

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

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

June 28, 2018
International Adviser – Giraffe Awards

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

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

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

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

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

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

“Readers choice – Europe – SEB International”

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

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

THE GIRAFFE AWARDS

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

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

Advisory Firms: Continental Wealth Management, Holborn Assets

Pension Trustees: Concept, STM Fidecs, Fast Pensions

Life Offices: SEB, Generali, Hansard

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

Structured Product Providers: Leonteq, Nomura, RBC, Commerzbank

Regulators: Isle of Man, New Zealand, United Kingdom

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

May 28, 2018
Old Mutual International (OMI) facilitating financial crime

From 2010 up to the present day, Old Mutual International has been facilitating financial crime by allowing scammers to misuse and abuse OMI “life bonds” to scam victims out of their life savings.

The victims of the CWM scam are still wondering how the hell they lost an average of 60% of their life savings. Old Mutual International (Quilter) was the provider for the bulk of the life bonds used in the CWM debacle, taking huge amounts of business from unregulated scammers Continental Wealth Management. OMI also paid CWM huge amounts of commission – in the full knowledge that CWM was unregulated and a known, serial scammer.

Pension Life members of the CWM victim group have supplied their figures to us. The losses are huge and we believe that these figures need to be shared with the public so Old Mutual International (OMI) understand and take responsibility for the devastation they have facilitated to the lives of the victims.

Let us hope that Old Mutual International will step up to the plate. The people who work at OMI are human beings, with loved ones. Hopefully, they can imagine how they would feel if this tragedy had happened to one of their loved ones – while the people at OMI stood by and did nothing to stop the devastation. For more than eight years, OMI employees sat on their hands while the so-called investments inside their “insurance bonds” plummeted in value. And OMI did absolutely nothing. Just kept taking their quarterly fees.

OMI will, of course, try to say it was not their fault. That it was down to the advisers appointed by the victims. Or the trustees. Or both. Or the Boogeyman. OMI will claim that they had every right to sit there and watch millions of pounds worth of life savings being wiped off investors’ funds, while continuing to take out their huge quarterly fees.

I wonder how OMI/Quilter directors would feel if this happened to one of their loved ones. Or if someone they cared about had been drowning, and a crowd of people had stood by and watched them die. Because, make no mistake, there will be deaths as a result of this. And the people at OMI will have this on their conscience for the rest of their lives.

OMI’s victims have died. And more are dying. This industry is about people. Let us see if OMI cares about their fellow human beings. Because, so far, there is zero evidence that they give a toss.

May 23, 2018