| An estimated 100-plus expats in Thailand lost heavily when the huge Australian property fund LMIM went into voluntary liquidation in March 2013. Many are still coming to terms with the collapse, especially as they had been led to believe their money was being managed by a rock solid company with a successful 14-year track record. But they’re not alone. Many others have suffered at the hands of rogue financial advisers selling worthless schemes. |  |
IN the two years since the collapse of the LM, the BigChilli has been in contact with hundreds of other foreigners who suffered heavy losses in the scam. We have also heard from victims of numerous other bogus
investment schemes.
They are all ordinary people based here in Thailand and overseas, each duped by so-called financial advisers (IFAs) into believing that their hard-earned money was not only safe and secure but would also grow in properly-managed investments.
How wrong they were.
We have received endless stories about bad and misleading information given by unqualified sales people working for unregulated financial advisers, motivated by high commissions to be earned from extremely dubious financial products, many of which turned out to be worthless Ponzi schemes.
In the majority of cases, victims of these scams have suffered life-changing losses, often plunging them into debt or forcing retirees in their 70s to seek employment, while those responsible have walked away with impunity.
Not surprisingly, the victims are angry and although embarrassed by their predicament want to warn others of their experiences.
Top of their list of complaints is the unsuitability of many of the investments schemes recommended to them by IFA companies. They say the schemes were also complex and often too difficult to understand.
Victims are also highly critical of the actions and attitude of some of the advisers.
Other complaints include:
• Outrageous claims about a financial product’s potential
• IFAs’ preference for funds paying the highest commissions
• Inadequate back-testing to show a fund’s real performance over a
reasonable time period
• Change of a company IFA without warning or adequate notice
• Lack of responsibility, or passing the buck, when problems arose
• Switching investors’ money into other schemes without prior
permission
• Lack of transparency, poor
communication and information with regard to normal fees and exit fees
• Delaying tactics
Victims have also spoken about the frequent omission of a written agreement on “risk” – how much an investor is prepared to lose before the funds are withdrawn. Without this, the investor’s funds do not have a safety net, it is claimed.
One investor also complained about the “abusive and arrogant behavior” of the IFA when confronted with his fund’s losses. Worse, he was also accused of emotional blackmail and extortion, along with threats of criminal and civil proceedings when he repeatedly asked for explanation and compensation.
Desperate for remedial action, some investors have tried to sue their IFAs, though so far with little success. Authorities here are apparently reluctant to get involved in a dispute between foreigners.
This reluctance may have been behind the thinking of local LM victims who have formed a group to lobby authorities in the UK and Australia for compensation.
Similar groups of expats who have similarly set up lobbies on behalf of victims of the notorious Centaur Litigation and Argentum Capital funds.
In fact, the Thai authorities are beginning to take action against unregistered financial advisers. The Securities & Exchange Commission recently filed a criminal complaint with the Economic Crime Division of the Royal Thai Police against a Bangkok-based IFA who, if found guilty of any offences, could face imprisonment of up to five years or a maximum fine of 500,000 baht, or both.
Such action could open the floodgates to further prosecutions.
This will clearly concern some IFAs who are suspected of setting up funds of their own, which is illegal even when those funds are established in low-tax territories overseas.
Reflecting on the damage done by rogue IFAs is a common theme on numerous websites dedicated to collapsed investments.
“The more I hear about people’s lives being destroyed by IFAs the angrier I get,” commented one victim.
“My IFA gained a generous commission for hooking me. The elusive fund managers are likely millionaires living in opulent luxury. The liquidators earn in an hour what I spend in a month,” said another.
One expat is surprisingly philosophical: “I blame myself for being greedy. I blame myself for listening to a financial adviser working on commission. I blame myself for not acting when suspicions were first aroused. I blame myself for putting all my eggs in one basket – a classic blunder. I blame myself for becoming an inadvertent victim.”
A Chiang Mai-based IFA is accused of selling toxic investments while “working hand in hand” with offshore product providers such as Friends Provident, Skandia and the like.” His accuser says the adviser was promoting LM right up until its collapse in spite of online warnings going back as far as 2009.
“The FA was earning at least 15 percent on commissions, and did a runner to the UK shortly after the collapse.”
Another commented: “Same as everyone else, I trusted my IFA who’d I also liked. He advised me to put £30,000 into Centaur. This was after he had previously advised me to put £160,000 into LM. Both funds have since collapsed. I am retired and am trying to live on a pittance of a pension.”
“My IFA told me nothing illegal happened,” wrote a foreigner. “He has a strange way of viewing legality. He’ll be busy grooming his next victims in Phuket no doubt. Can’t believe I listened to him – he turned me from rich to poor.”
Added another: “Our IFA mis-sold us a massive investment in LM and Skandia in 2007 and we have been pursuing them for years. The company is not affiliated to the company with the same name in the UK. They are not registered or licensed anywhere. They pretend they are in British Virgin Islands but they are not. They are on the SEC Thailand investor alert list.”
investment schemes.
They are all ordinary people based here in Thailand and overseas, each duped by so-called financial advisers (IFAs) into believing that their hard-earned money was not only safe and secure but would also grow in properly-managed investments.
How wrong they were.
We have received endless stories about bad and misleading information given by unqualified sales people working for unregulated financial advisers, motivated by high commissions to be earned from extremely dubious financial products, many of which turned out to be worthless Ponzi schemes.
In the majority of cases, victims of these scams have suffered life-changing losses, often plunging them into debt or forcing retirees in their 70s to seek employment, while those responsible have walked away with impunity.
Not surprisingly, the victims are angry and although embarrassed by their predicament want to warn others of their experiences.
Top of their list of complaints is the unsuitability of many of the investments schemes recommended to them by IFA companies. They say the schemes were also complex and often too difficult to understand.
Victims are also highly critical of the actions and attitude of some of the advisers.
Other complaints include:
• Outrageous claims about a financial product’s potential
• IFAs’ preference for funds paying the highest commissions
• Inadequate back-testing to show a fund’s real performance over a
reasonable time period
• Change of a company IFA without warning or adequate notice
• Lack of responsibility, or passing the buck, when problems arose
• Switching investors’ money into other schemes without prior
permission
• Lack of transparency, poor
communication and information with regard to normal fees and exit fees
• Delaying tactics
Victims have also spoken about the frequent omission of a written agreement on “risk” – how much an investor is prepared to lose before the funds are withdrawn. Without this, the investor’s funds do not have a safety net, it is claimed.
One investor also complained about the “abusive and arrogant behavior” of the IFA when confronted with his fund’s losses. Worse, he was also accused of emotional blackmail and extortion, along with threats of criminal and civil proceedings when he repeatedly asked for explanation and compensation.
Desperate for remedial action, some investors have tried to sue their IFAs, though so far with little success. Authorities here are apparently reluctant to get involved in a dispute between foreigners.
This reluctance may have been behind the thinking of local LM victims who have formed a group to lobby authorities in the UK and Australia for compensation.
Similar groups of expats who have similarly set up lobbies on behalf of victims of the notorious Centaur Litigation and Argentum Capital funds.
In fact, the Thai authorities are beginning to take action against unregistered financial advisers. The Securities & Exchange Commission recently filed a criminal complaint with the Economic Crime Division of the Royal Thai Police against a Bangkok-based IFA who, if found guilty of any offences, could face imprisonment of up to five years or a maximum fine of 500,000 baht, or both.
Such action could open the floodgates to further prosecutions.
This will clearly concern some IFAs who are suspected of setting up funds of their own, which is illegal even when those funds are established in low-tax territories overseas.
Reflecting on the damage done by rogue IFAs is a common theme on numerous websites dedicated to collapsed investments.
“The more I hear about people’s lives being destroyed by IFAs the angrier I get,” commented one victim.
“My IFA gained a generous commission for hooking me. The elusive fund managers are likely millionaires living in opulent luxury. The liquidators earn in an hour what I spend in a month,” said another.
One expat is surprisingly philosophical: “I blame myself for being greedy. I blame myself for listening to a financial adviser working on commission. I blame myself for not acting when suspicions were first aroused. I blame myself for putting all my eggs in one basket – a classic blunder. I blame myself for becoming an inadvertent victim.”
A Chiang Mai-based IFA is accused of selling toxic investments while “working hand in hand” with offshore product providers such as Friends Provident, Skandia and the like.” His accuser says the adviser was promoting LM right up until its collapse in spite of online warnings going back as far as 2009.
“The FA was earning at least 15 percent on commissions, and did a runner to the UK shortly after the collapse.”
Another commented: “Same as everyone else, I trusted my IFA who’d I also liked. He advised me to put £30,000 into Centaur. This was after he had previously advised me to put £160,000 into LM. Both funds have since collapsed. I am retired and am trying to live on a pittance of a pension.”
“My IFA told me nothing illegal happened,” wrote a foreigner. “He has a strange way of viewing legality. He’ll be busy grooming his next victims in Phuket no doubt. Can’t believe I listened to him – he turned me from rich to poor.”
Added another: “Our IFA mis-sold us a massive investment in LM and Skandia in 2007 and we have been pursuing them for years. The company is not affiliated to the company with the same name in the UK. They are not registered or licensed anywhere. They pretend they are in British Virgin Islands but they are not. They are on the SEC Thailand investor alert list.”
The Thai authorities are beginning to take action against unregistered financial advisers. The Securities & Exchange Commission recently filed a criminal complaint with the Economic Crime Division of the Royal Thai Police against a Bangkok-based IFA who, if found guilty of any offences, could face imprisonment of up to five years or a maximum fine of 500,000 baht, or both.
IFA Companies on the Thai SEC Alert List
• Coreharbour Ltd
• Credenda Associates
• EMM Consultancy & EMM Consulting Co., Ltd
• Global Investments (Far East) Ltd & Global Investments International Global House Ltd & Global Consultants Ltd
• Infinity Financial Solutions
• Montpelier Financial Consultants & Montpelier (Thailand) Ltd
• PFM International
• PFS International Consultants Limited
• Portsmouth Mann International Ltd.
• Professional Portfolio International Ltd IFA Company forwarded to the RTP ECD for further action
• Professional Portfolio International Ltd
• Coreharbour Ltd
• Credenda Associates
• EMM Consultancy & EMM Consulting Co., Ltd
• Global Investments (Far East) Ltd & Global Investments International Global House Ltd & Global Consultants Ltd
• Infinity Financial Solutions
• Montpelier Financial Consultants & Montpelier (Thailand) Ltd
• PFM International
• PFS International Consultants Limited
• Portsmouth Mann International Ltd.
• Professional Portfolio International Ltd IFA Company forwarded to the RTP ECD for further action
• Professional Portfolio International Ltd
