Legend Lane is offering various unregulated investments which include:
- Legend Lane FX Trading Platform – investment in forex paying fixed interest of 24% for a one year investment
- Legend Lane Gold Product – investment in gold paying fixed interest of 24% for a one year investment
- Legend Lane 1314 – investment in property paying fixed interest of 9% per year
- Silver Sun Living – investment into Senior Housing paying 6-8% returns
- Investment into a “Film Production Fund” paying 10% per year for 2 years (described on the website as “release summer 2018”)
- Investment into Loco Energy Drinks paying 9% per year for 2 years
- Investment into “Black Cat”, an “anonymous, daring, adventurous, prestigious, defining, liberating, dynamic, mystical” investment into something undisclosed paying 30% over one year
Who are Legend Lane?
Legend Lane has two UK registered companies: Legend Lane Limited and Legend Lane Group Limited (previously known as Legend Lane (Glasgow) Limited and still referred to by its old name on the website).
Legend Lane is jointly owned by its directors, Gregory (Greg) Paul Heywood and Christopher (Chris) Glendinning Miller.
At the time of its last filings, both Legend Lane Group Limited and Legend Lane Limited were shell companies holding only £100 and £80 share capital respectively.
Both Greg Heywood and Chris Miller were previously directors of The Step Properties Holdings plc, which ceased operating in 2008 and was dissolved in 2010. A related company owned by Heywood, Heywood Property Investments, collapsed as a consequence owing £3.6 million to HSBC Bank. Only £1.27 million was recovered from the company.
Another former The Step director, Leigh Heywood, is currently CEO (though non-shareholder) of Aston Darby, an unregulated investment into airport car parks.
How safe is the investment?
Legend Lane’s investments are all unregulated capital-at-risk investments and if Legend Lane defaults you risk losing up to 100% of your money.
Most of Legend Lane’s investments (forex, gold, property) consist of fixed interest investments. If Legend Lane fails to make sufficient returns from its underlying activities, there is a risk that it may run out of money to pay investors’ interest and capital.
Legend Lane also offers investment in senior care suites with promises of a fixed return and an “assured buyback” after 15 years. For more details of how these investments work in theory, and the risks involved, see my general guide to investing on hotel rooms (this involves senior living suites rather than hotel rooms, but the investment structure is the same).
For the sake of brevity, I will not analyse every single one of Legend Lane’s offered investments in detail. There are however a number of red flags which immediately jump out.
1) Lack of FCA authorisation
A number of Legend Lane’s activities require authorisation from the Financial Conduct Authority, such as its claim to run an FX platform and a film production fund.
Legend Lane’s website also constitutes a clear financial promotion which induces investors to invest in its products.
A search for “Legend Lane” on the FCA register produced no results.
Carrying out regulated activities and issuing financial promotions in the UK without FCA authorisation is a criminal offence.
2) Misleading claims
Legend Lane refers on its website to making £500,000 in charitable contributions “since we began in 2012″. There is no evidence that Legend Lane existed prior to 2016, when its Companies House registration began.
Legend Lane literature refers to the company “formerly trading via two consultancy companies that have amalgamated into Legend Lane Limited”. No details of these companies are provided and Legend Lane Limited’s last accounts (May 2018) show it to be a shell company holding £80 in assets.
Legend Lane did not exist prior to 2016 and there is no evidence that any older trading company has been merged into it whose history Legend Lane can lay claim to.
Legend Lane also displays an Investors In People logo on its website. Investors In People has confirmed that Legend Lane is not accredited by them.
3) Nonsensical investments
Legend Lane’s forex bond (paying 24% in one year) claims that only 10% of investors’ money will be put at risk. If Legend Lane loses 10%, it will give investors the option to withdraw with their remaining 90%.
6. How is my capital protected?
The Legend lane FX Platform offers capital protection ensuring only 10% of the invested amount is ever at risk. Only 5% – 10% of client’s monies are traded at any one time. The remaining balance of 90% remains secured with the liquidity provider. All trading will cease in the event that the client account loses 10%. In this scenario the client will be given the option to exit the investment and receive 90% of their capital back within 14 days.
Why exactly investors would want to give Legend Lane 90% of their money so they can just sit on it I have no idea. If I want to put only 10% of my capital at risk, then I am quite capable of investing 10% and keeping 90% in my own bank account, where I will get more interest, more tax-efficiently than Legend Lane can achieve as a business.
Moreover, in order to generate returns of 24% per annum on the total investment while only trading 10% of investors’ money, Legend Lane effectively has to generate annualised returns of 240% per annum from forex trading, plus costs, on the amount put at risk. (At current cash interest rates, the 90% not at risk can be safely assumed to earn almost nothing.)
If Legend Lane is capable of consistently generating 240% annualised returns, why bother soliciting investment over the Internet when they could keep their method to themselves and be billionaires within a few years?
While it is possible to generate very high returns from forex trading in the short term, in the long term forex trading is a zero sum game, and Legend Lane’s claim to be able to generate 240% per year returns from forex in order to generate 24% per year for investors while only putting 10% of their money at risk is a screaming red flag.
As this is an unregulated investment, investors will have virtually no protection if Legend Lane fails to keep 90% in cash as promised and defaults on its promise to return at least 90% to investors if its forex trading fails.
Its gold bond paying 24% per year makes little more sense. Gold is a highly volatile commodity. Similar to forex, while it is possible to make short-term profits in the gold market, nowhere in Legend Lane’s investment literature does it adequately explain how they expect to make a predictable 24% return in one year from buying and selling gold.
And we will finish with my favourite investment of all, the Black Cat investment paying 30% in one year.
How does Legend Lane intend to generate this 30%? No idea. According to the literature, “no information is all the information you need”. The Black Cat investment literature contains a load of specious waffle, irrelevant quotes, and a series of FAQs which are all answered “No information”.
Essentially, Legend Lane’s Black Cat is a modern updating of a famous investment from the South Sea bubble of the 18th century, which advertised “a company for carrying out an undertaking of great advantage, but nobody to know what it is“.
Next morning, at nine o’clock, this great man opened an office in Cornhill. Crowds of people beset his door, and when he shut up at three o’clock, he found that no less than one thousand shares had been subscribed for, and the deposits paid. He was thus, in five hours, the winner of 2,000 pounds. He was philosopher enough to be contented with his venture, and set off the same evening for the Continent. He was never heard of again.
– Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds, 1841
Between Legend Lane’s illegal financial promotions and regulated activity, implausible returns and nonsensical investments, and its false claim to have Investors in People accreditation, it is clear that investors should not hand over their money unless they are content with the risk that its directors will do exactly the same.
Should I invest with Legend Lane?
This blog does not give financial advice. The following are statements of publicly available facts or widely accepted investment principles, not a personalised recommendation. Investors should consult a regulated independent financial adviser if they are in any doubt.
Notwithstanding the regulatory issues raised above, there is nothing illegal in running an unregulated investment by itself. Even if Legend Lane defaults on its various bonds and investors lose all their money, that, by itself, will not mean it has done anything wrong.
Any investment in a single company is high risk. Any investment offering returns of 24-30% per annum has an extremely high chance of loss.
Do not proceed unless you are prepared for total losses.