Fraudulent investments?

SeaPrince1

Hi Malthusian, Thanks for your reply.

I had arranged a meeting with my IFA this morning but suprisingly he didn't turn up. He also wont answer his phone and won't reply to any of my messages!! He claimed to have a contact at Munio and he got this guy to ring us in July. At the time he said that they were working to resolve matters and had scaled down the company to 'keep things live' while the insurance claim was being settled. He told me they had been very vigilant and exercised 'due diligence' regarding the insurance policy and said that if the insurance claim was unsuccessful they would be going down the fraud route with the insurance company. However I am now unable to contact him and the security trustees Jade State Wealth are reluctant to talk about Munio. In fact they said they no longer have dealings with them, this was last week when I rang them. I have known and dealt with this IFA for approx 12 years but now I am beginning to question things he has said regarding Munio; he claimed Munio had no connection with Privelege Wealth when my wife questioned him about the shooting that took place in Panama and he certainly didn't tell me that my money was being invested in Privelege Wealth. I look forward to hearing some of your thoughts.

Malthusian

I'm guessing "surprisingly" is a typo and missing an "un". So he's wasted your time for at least 4 months stringing you along with a load of total claptrap. Don't let him waste any more. Start the recovery process and make the formal complaint today. Remember that the complaint is that the investments were unsuitable and too high risk from the beginning, not that they've gone bust.

Which IFA is it? There are almost certainly other people in the same position who will be wondering what to do next.

Does he or his firm appear on the FCA register? We have assumed he does because you used the term "IFA", but it is not uncommon for people to claim they are IFAs when they are not.

What other investments has he recommended to you around the same time he was recommending Munio?

Malthusian

I am very reluctant to waste your time any further on the nonsense about insurance, but just for completeness:

The investment literature stated "When a client makes a bond purchase the capital is insured so if there is any kind of loss to the investor through the investment being mismanaged or any company fault the client will receive 95% of the capital invested back."

There is at present no evidence that the investment was mismanaged or that there was any company fault. Therefore the insurance is irrelevant.

The fact that the investment has gone bust does not mean it was mismanaged. Munio said they were going to raise funds to lend to a US peer-to-peer lender, that's what they did, the peer-to-peer lender went bust. Munio did what it said on the tin.

Professional indemnity insurance of this kind, assuming that Munio even had such a policy, covers a very narrow set of circumstances. Elsewhere in the Munio literature these risks are defined as "fraud, forgery, I.T. failure, counterfeit documentation, electronic, digital and facsimile false communication and a host of other banking, fund management and allied industry risks." None of these risks are relevant, the risk that occurred in this case was that the peer-to-peer lender went bust, which was not insured against, and never was going to be insured against. No insurer insures unregulated investment schemes or obscure US peer-to-peer lending firms against the event that they run out of money.

The fact that Munio Capital's director (Gary Williamson) has applied to have the company dissolved suggests that he believes there is no chance of this insurance policy paying out. Otherwise he wouldn't be applying to dissolve the company that would be in line for that payout.

dunstonh

I had arranged a meeting with my IFA this morning but suprisingly he didn't turn up.

Is it an IFA or someone that has just told you they were an IFA and you believed them?

A lot of these fraudulent unregulated investments are put in place by people pretending to be something they are not. Some are put in place by stupid advisers. Some are put in place by downright dodgy ones. Have you actually checked the FCA register to check the status of yours? I know of several cases where mortgage advisers were transacting investment business using unregulated investments. The end consumer thought they were seeing an IFA but in reality, they were seeing someone with no investment qualifications or permissions.

Stringing out is very common with dodgy schemes. It allows the firms that are at risk (which would include an adviser firm if it is a real adviser) to get as much out of their business as they can before it goes into administration. They can even get more people signed up to other dodgy schemes in that period.

capital0ne

dunstonh wrote: »

Is it an IFA or someone that has just told you they were an IFA and you believed them?

Be very wary of anyone who tells you they are an IFA.
Demand proof and documents and references before entering into any agreement.
Good luck folks

SeaPrince1

Hi, thanks for the replies. I have been a client of this guy since approx 2006. At that time he was FCA registered. He is now listed as "inactive" since 2012 on the FCA register. This was not disclosed to me at the time of the investment, which was in Nov. 2016. Any suggestions on what I should do now?

Malthusian

Did he advise you via a limited company or as a sole trader? This should be clear from the suitability letter and any other paperwork he sent you.

If he advised you as a sole trader while being unauthorised to give advice then I am afraid you have lost your money.

If the advice was given via a limited company then it is the company you should be looking for on the register.

dunstonh

I have been a client of this guy since approx 2006. At that time he was FCA registered. He is now listed as "inactive" since 2012 on the FCA register.

2012 sounds interesting as a lot dropped permissions at that point as higher qualification standards came in and a new definition of IFA was created (making it harder for many firms to continue operating as IFAs).

He has lied to about being an IFA when he wasn't. He wasnt even an FA. He had no regulatory permissions to give investment advice. You pretty much have to assume that everything he tells you is lies.

This was not disclosed to me at the time of the investment, which was in Nov. 2016.

If he deauthorised in 2012, then he ceased to hold investment permissions after that date. So, anything done after that date would mean you do not have FSCS protection. There are caveats to this. Such as if he continued as a mortgage adviser and his company had FCA permissions. Mortgage advisers are not personally authorised. Only the company is. So, you need to also look at the FCA register at his company as well as him individually. When did the company become deauthorised?

SeaPrince1

Hi, thanks for your reply. He has a limited company with a home and a city centre office. I didn't receive any suitability letter from him that I can recall. The only thing I have are the Munio Bond Certificates and a draft copy of a Munio letter that was to be issued to investors on 31/8/2018. This stated that Munio was persuing an insurance claim and was lodging a record of funds invested with the administrators. Also they said that quarterly updates would be issued via the agents who introduced clients to the investment. This letter was given to me by our IFA?? who received it from his contact in Munio (the guy who phoned me in July). Obviously the letter never went to investors.
The last meeting I had with him, which was a few weeks ago, was in my home and at that time he asked for a contribution to his expenses. Stupidly enough I sent it to him as I thought he was genuine and was going to help with Munio.

dunstonh

I didn't receive any suitability letter from him that I can recall.

As he was not regulated by the FCA at the point of sale and selling dodgy unregulated investments, it is pretty much a given that he wouldnt be complying with regulated requirements of a real adviser.

This letter was given to me by our IFA??

Is this a real adviser (someone else) or the one that lied to you who sold you the investment and wasnt an IFA?

The last meeting I had with him, which was a few weeks ago, was in my home and at that time he asked for a contribution to his expenses. Stupidly enough I sent it to him as I thought he was genuine and was going to help with Munio.

Once you get known as a mug, you often end up getting hit multiple times. Have you reported this online to action fraud? It probably wont help but it's a system that generally works if more people report the same person or the amounts involved are high.