Category: failbonds

We review SBL Market Guide Program – HSL / RVS scam reboots as predicted

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When the RVS Closing Price System scam, a reboot of the HSL Smart Market System scam, disappeared with investors' money around October 2018, I facetiously wondered how long it would take before another company with a three-letter acronym name sprung up offering infeasible returns.

Turns out the answer was about three months.

Investors have reported being cold-called by people promoting the SBL Market Guide program that can turn an investment of £4,750 (supposedly a 50% discount) into £30k in two years, after which the other 50% becomes payable.

This is virtually identical to the RVS Closing Price System which charged £4,925 for the prospect of turning this into £30,000 within two years, with a further £4,925 payable if RVS achieved the promised returns.

Needless to say RVS and its anonymous perpetrators disappeared well before the two year period was up, and RVS investors, like HSL investors before them, lost every penny of the £4,925 they put in. Along with any further money they gave to RVS to trade shares or buy access to data.

Continue reading for a review of the SBL Market Guide System.

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London Capital & Finance: Is Smith & Williamson’s softly-softly approach in the interests of investors?

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~ Brev ~ 3 Comments

In Sunday's interview between Smith & Williamson's Finbarr O'Connell and Paul Lewis of BBC's Money Box show, O'Connell made clear that the administrators would be treating London Capital & Finance's underlying borrowers with kid gloves to ensure they didn't damage the ability of the borrowers to repay.

PL: So again it depends on those 12 companies [the handful of companies which borrowed from LCF] succeeding in what they're doing and not failing. FO'C: Absolutely, and nobody amongst administrators or listening to this has any interest in those companies becoming distressed, so we want to work with them on a very co-operative basis to ensure we get back the bondholders' money.
On the face of it, Smith & Williamson being "very co-operative" with LCF's underlying borrowers makes sense. For starters, the administrators may not have the right to demand the money back anyway, as a term for repayment will have been agreed at outset. Even if it can call in LCF's loans, it makes no sense to do so if the borrowers aren't currently in a position to pay it back in full, as long as they will be later.

The other option on the table is to sell the loans to a third party, on which the administrators would certainly have to take a loss, which again makes little sense if the borrowers can be relied on to repay the capital and interest in time.

There is one glaring problem with this logic. For some of LCF's borrowers, if they repay any capital or interest, it will be the first time they have ever done so. Research by Drew J of Damn Lies and Statistics showed that in at least one case, LCF loaned money to a dormant company, CV Resorts Limited, whose published financial results subsequently did not change for four years. This is only possible if the company was not trading, and paying no interest on its loan. Otherwise you would see movement in the balance sheet.

Smith & Williamson can be "very co-operative" with CV Resorts Limited by continuing to allow them to hold LCF investors' money without paying anything back, and in doing so they can say that the loan is still performing. (If I've borrowed money on the basis that I don't have to pay anything back for however long, and I don't pay anything back in that time, then I've met my obligations and the loan is performing.) But it doesn't recover anything for investors.

Continue reading...

London Capital & Finance goes into administration

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~ Brev ~ 1 Comment

London Capital & Finance has gone into administration, with four practitioners from top-10 accountancy firm Smith & Williamson appointed as administrators.

According to a FAQ on the LCF website, LCF applied for the administration itself. After the FCA froze the company's assets and censured LCF for persistently misselling its high-risk unregulated bonds to retail investors,

3. As a result of the above, LCF has been unable to raise further monies from investors. 4. Professional advice was sought and the Company was advised that LCF was insolvent and that it should be placed into administration to provide the best outcome for Bondholders and other creditors. The Company was also advised that in order for some independent party to be able to deal with the Company’s assets for the benefit of the Bondholders and the other creditors that the directors should place the Company into Administration such that the Administrators could perform those essential functions. As LCF is an FCA regulated firm, the consent of the FCA is required for the directors of LCF to resolve to place the Company into administration. Accordingly, the consent of the FCA was duly sought and obtained.
The news broke on the Smith & Williamson company website yesterday. The news seems to have crashed Smith & Williamson's servers, as the smithandwilliamson.com website is unresponsive at time of writing. Continue reading...

Secured Energy Bonds administrator seeks £5.6 million from the ashes of Independent Portfolio Managers

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The administrators of Secured Energy Bonds have posted their latest six monthly update, which can be read in full on Companies House.

So far the administration has realised £288,579 in assets, of which £272,905 has been paid out in administration costs, predominantly the administrators' own fees and the fees of their legal advisors (and VAT). According to a schedule in Appendix B, a further £169,842 has been incurred in legal fees to date but not yet paid out. Bondholders' claims stand at £7.5 million.

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Independent Portfolio Managers goes into liquidation

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Independent Portfolio Managers, the minibond promoter which was hit by a slew of Ombudsman complaints for its role in the collapse of Secured Energy Bonds and Providence Bonds, has gone into liquidation.

When I last reported on the company in late October I overlooked that a creditor had already petitioned to wind up the company. This petition was heard two weeks ago, and the winding up commenced on 14 November.

Interestingly, the creditor who brought the petition against Independent Portfolio Managers was the administrator of Secured Energy Bonds.

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Essex and London Properties shut down by the High Court for operating a Ponzi scheme

~ Brev ~ 1 Comment

Essex and London Properties Limited, which apparently offered 8% per year for three year bonds and 12% for one year bonds (I have been unable to verify whether this was correct or whether the Financial Times has swapped the two coupons around, which would make more sense), has been liquidated by the High Court.

The Insolvency Service has characterised the company as a Ponzi scheme, on the basis that when the records of its escrow payment providers were analysed, they indicated that new investors' money was being used to pay existing investors' interest payments, instead of interest payments coming from property returns.

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Providence Bonds’ Chris Byrne sings like canary, gets stay of sentencing

~ Brev ~ 1 Comment

Back in September Chris Byrne, an adviser for Jersey-based Lumiere Wealth, who advised unsophisticated investors to invest in the unregulated Providence Bonds opportunity, failing to disclose that Lumiere Wealth was in fact owned by Providence, was convicted of fraud.

Byrne was convicted not just for his misselling of Providence Bonds, but for other frauds including conning a near-blind woman into making a £1 million personal loan to him.

News from Jersey then went silent for a month and a half. Until last week, when the Jersey Post revealed that Byrne's sentencing had been delayed at the last minute, on the grounds that Byrne had been helping the police of neighbouring Guernsey with their inquiries into a related investigation.

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