Did the FCA withdraw scam warning after legal threats?

November 6, 2019November 5, 2019 ~ Brev ~ 3 Comments

An article in Private Eye about the cryptocurrency Ponzi scheme OneCoin caught my eye last week.

OneCoin was one of the earliest and biggest cryptocurrency Ponzi schemes. You handed over money in exchange for OneCoin tokens, which OneCoin and its agents claimed would steadily increase in value, allowing you to cash in your tokens later for more money (or money's worth).

Large recruitment commissions were also paid in a multi-level marketing (aka pyramid) system.

OneCoin never made any serious attempt to claim that it had external revenue to fund its ability to pay investors more than they'd invested - plus recruitment commissions. Using new investors' money to allow existing investors to cash out more than they'd invested, while also paying multi-level commissions, made it a Ponzi scheme.

Bad year for celebrity-endorsed unregulated investment continues as Kevin McCloud’s HAB Land collapses

August 27, 2019August 27, 2019 ~ Brev ~ 5 Comments

HAB (Happiness, Architecture, Beauty), a company co-founded by Grand Designs presenter Kevin McCloud, has told its investors to expect up to 97% losses.

HAB raised a total of £4.3 million in equity shares and unregulated mini-bonds from the public in 2013 and January 2017. A further fundraising in September 2017 aimed to raise up to £50 million; how much this added is unclear.

Total losses in 2019 from UK collapsed unregulated investments hit almost £1 billion

August 1, 2019July 26, 2019 ~ Brev ~ 19 Comments

If 2016 was the Year of Dead Celebrities, 2019 is shaping up to be the year of the Collapsed Unregulated Investment Scheme.

Starting with the biggest of the lot, the collapse of the £230 million London Capital & Finance, we've seen the following schemes switch their lights off in 2019.

All have the following factors in common: they all issued investments not regulated by the Financial Conduct Authority, they all sourced investment predominantly from retail investors rather than institutions, and they all went into administration or another form of "official" shutdown in 2019.

Victims of collapsed investment schemes are not greedy, and they are not stupid

July 19, 2019July 19, 2019 ~ Brev ~ 3 Comments

This seems an appropriate time to debunk a couple of myths that are commonly believed about the victims of unregulated investment schemes which collapse and lose their investors' money. Not least by the investors about themselves.

Myth #1: The victims of collapsed investment schemes were greedy

How can LCF investors get compensation? A look at the options

July 5, 2019July 24, 2019 ~ Brev ~ 2 Comments

Last week we noted the FSCS' reheated announcement that it would consider compensation claims by investors in London Capital and Finance if it deems they received advice from LCF's marketing agent.

With the potential for some LCF investors to be compensated and not others, it seems a good time to have a review of the full range of options available to the Government to compensate LCF investors if it wants to, based on how it has done so in the case of other collapsed investment schemes.

What is a “mini-bond”? A mini history of a much-maligned label

June 17, 2019June 16, 2019 ~ Brev ~ 2 Comments

[An expanded version of a Twitter rant posted last Monday ago.]

According to IFA trade rag Money Marketing, investors in London Capital and Finance are very angry that the Financial Conduct Authority has repeatedly referred to the loan notes in which they invested, marketed by LCF as "secured bonds", as mini-bonds.

So what is a mini-bond and why are LCF investors annoyed about the label? The FCA says (in an article belatedly posted last month) "There is no legal definition of a ‘mini-bond’, but the term usually refers to illiquid debt securities marketed to retail investors."

FSCS tells potential victim of clone scam to ask the scammers if they’re FSCS-protected. facepalm

June 11, 2019June 10, 2019 ~ Brev ~ 1 Comment

Earlier today I reviewed the latest in a series of clone scams which have jumped on obscure EU companies with "passporting in" rights to offer regulated services in the UK.

Because the genuine company is obscure and has no web presence of its own (it may even have shut down but the FCA didn't notice), the investor is unable to see, when they Google the company's name, that there are two "Andreas Geigers" and they have been given the wrong one. They are unable to contact the real Andreas Geiger to ask if they really offer bonds paying 17% per year.

One investor however still had concerns. They contacted the Financial Services Compensation Scheme to ask whether they would be protected if they invested their money with Andreas Geiger.