Two years have passed since the infamous Australian-based fund went into administration, stripping thousands of investors of their savings and pensions, including at least a hundred expatriates here in Thailand. Five victims of this notorious scam talk about their introduction to the fund by Bangkok IFAs and how their lives have been blighted by the LM calamity
By Special Correspondent
By Special Correspondent
THE catastrophic collapse of the LM Investment Management (LMIM) Group run by Peter Drake, a New Zealander based in Australia, has caused massive financial hardship to dozens of expatriate investors based in Thailand.
Many of those affected by what turned out to be a huge scam are in their sixties and were already enjoying their retirement when news of LMIM’s demise was announced. Some have been left destitute, while others are now trying to find new ways of earning a living.
Many of those affected by what turned out to be a huge scam are in their sixties and were already enjoying their retirement when news of LMIM’s demise was announced. Some have been left destitute, while others are now trying to find new ways of earning a living.
The funds collapsed in March 2013 despite an audited valuation some months earlier of an estimated AUS$3 billion, plus allegedly AUS$400 million in cash.
Expat victims maintain they were persuaded to invest in LMIM by unregulated and therefore illegal International Financial Advisers (IFAs), who touted the funds as “safe as a bank” and coming under “stringent Australian Regulatory Rules”(ASIC), as well as a “low risk” investments for ordinary non-professional investors.
A group called the LM Investor Thai Group (LMITG) comprising some 60 expatriates is now lobbying the British and Australian governments with a view to class actions and recovery against those responsible for their losses. The LMITG Group alone lost in the region of £8.5 million.
The total loss to expat investors worldwide is estimated at £500 million.
Meanwhile, the Australian Securities Investment Commission (ASIC), which was heralded as part of the “stringent Australian financial regime,” recently took action against Peter Drake but has since decided not to press criminal charges.
PERSONAL EXPERIENCES CASE #1 (From Peter Kells)
I AM a 70+ British citizen based in Bangkok who officially retired in 2009. As a way of responsibly managing my family’s retirement savings, I was looking for a safe and secure way to invest our money with the goal to provide financial security throughout my retirement years in Thailand.
In 2011 and 2012 I invested in the LMIM group in Queensland via an international financial service insurance group located in the Isle of Man called Friends Provident Int. PLC (FPI), which were accepting LMIM on their platforms. As such I understood they had done 100% due diligence. I invested my savings in the total sum of £250,000 which is now totally lost as LMIM group went into receivership as of March 2013.
Having approached FPI they claim no responsibility and still have the audacity to charge me 1.25% per quarter on my original investment even though the value today is zero!
I visited Australia twice last year at my own cost to investigate what happened to this LM Fund. I met Senior Directors of the LMIM Company, the receivers and many Australian journalists, along with forensic investigators, all of whom claim LMIM was a typical Ponzi scheme.
I also believe that a few of the directors, with some of the large advisers were involved in insider dealings.
As most of the assets in the audited accounts of these LMIM Group of companies were highly over valued by the LMIM Directors this left the Receivers no option but to sell at no more than 25% of the reputed values in the company’s audited accounts. I personally visited some of the so-called property developments and found they were just vacant plots of land.
The principal Director and sole shareholder of these groups was a New Zealand national, ex-insurance salesman who even took a personal loan of $26 million, of which he now claims he can’t repay. The Australian Securities and Investments Commission (ASIC) are doing nothing! We are left to wonder, “Where did the money GO?”
Our group of 50-plus expats have lost most of their life savings via ‘financial advisors’ operating in Thailand. We have since discovered these advisors are not registered by the Thai SEC!
Personally I am now in the position in which I will need to sell our family home as my finances and been substantially affected by LMIM scheme and we are no longer financially secure and I need the money to take care of my family.
CASE #2
I AM a semi-retired British subject, 65, married to a very supportive Thai wife; we have a three-year old daughter.
I was advised by a local Independent Financial Adviser (IFA) to move my UK self-invested personal pension offshore and to invest it into LM Managed Performance Fund which was part of the portfolio of LM Investment Management (LMIM). I recently found out that my IFA is operating in Thailand without a licence, which is illegal.
When LMIM collapsed in 2013 my entire pension of £110,000 was lost, with zero hope of recovery.
I have no other income and am desperately trying to earn money through online sales and also by living on hand-outs from my family. I have recently had to sell my family car to realise income to be able to survive. My meagre old age pension starts on my 65th birthday.
CASE #3
ABOUT ten years ago I decided to sell my business in London and move to Bangkok. My plan was to invest in a business such as a hotel. I bought a condo and started my research. In the meantime I entrusted a large part of my life savings to an International Financial Advisor, who suggested putting £200,000 into LM Managed Performance fund. I was assured it was as safe as houses. Furthermore, as it was based in Australia, it was protected due to their stringent regulations.
It was also suggested I move my UK private pension to a QROPS. This was arranged via trustees based in Hong Kong with a policy with Royal London 360. A further £30,000 was put into LM Managed Performance fund.
I started getting cold feet about LM, worrying that I had too many eggs in one basket. My advisor kept reassuring me but I decided to take £100,000 out. It took much longer than expected to get my hands on ‘my’ money. I complained to my advisor and when I finally received it was wondering if I should take out the rest. He persuaded me to leave it and I even rolled over the annual interest a short time before the collapse. Again I was told it was perfectly safe.
I’ve since read that an advisor in Hong Kong had been warning his clients about LM. If he realised that the fund was toxic, why didn’t others? Incompetence or greed? Apparently LM paid advisors handsome commissions.
The £100,000 I removed was also not safe as my advisor put me heavily into gold which then plummeted. This was done without seeking my prior approval.
Another of my funds, Axiom, also went belly-up. Meanwhile I was/am paying high fees for the service. Royal London 360 apparently continues to take a fee based on the original sum invested in LM. It seems to me that any due diligence done by Royal London 360, my HK trustees, Generali (in the case of Axiom) or my financial advisor wasn’t diligent enough. All of them made a nice income from my investment whilst I have lost nearly half a million pounds. And the response of the Australian government has been very disappointing.
I’m shortly to celebrate my 60th birthday. Sometimes I feel like a prisoner in my condo with very little income to enjoy life. It’s certainly not what I expected for my twilight years.
Expat victims maintain they were persuaded to invest in LMIM by unregulated and therefore illegal International Financial Advisers (IFAs), who touted the funds as “safe as a bank” and coming under “stringent Australian Regulatory Rules”(ASIC), as well as a “low risk” investments for ordinary non-professional investors.
A group called the LM Investor Thai Group (LMITG) comprising some 60 expatriates is now lobbying the British and Australian governments with a view to class actions and recovery against those responsible for their losses. The LMITG Group alone lost in the region of £8.5 million.
The total loss to expat investors worldwide is estimated at £500 million.
Meanwhile, the Australian Securities Investment Commission (ASIC), which was heralded as part of the “stringent Australian financial regime,” recently took action against Peter Drake but has since decided not to press criminal charges.
PERSONAL EXPERIENCES CASE #1 (From Peter Kells)
I AM a 70+ British citizen based in Bangkok who officially retired in 2009. As a way of responsibly managing my family’s retirement savings, I was looking for a safe and secure way to invest our money with the goal to provide financial security throughout my retirement years in Thailand.
In 2011 and 2012 I invested in the LMIM group in Queensland via an international financial service insurance group located in the Isle of Man called Friends Provident Int. PLC (FPI), which were accepting LMIM on their platforms. As such I understood they had done 100% due diligence. I invested my savings in the total sum of £250,000 which is now totally lost as LMIM group went into receivership as of March 2013.
Having approached FPI they claim no responsibility and still have the audacity to charge me 1.25% per quarter on my original investment even though the value today is zero!
I visited Australia twice last year at my own cost to investigate what happened to this LM Fund. I met Senior Directors of the LMIM Company, the receivers and many Australian journalists, along with forensic investigators, all of whom claim LMIM was a typical Ponzi scheme.
I also believe that a few of the directors, with some of the large advisers were involved in insider dealings.
As most of the assets in the audited accounts of these LMIM Group of companies were highly over valued by the LMIM Directors this left the Receivers no option but to sell at no more than 25% of the reputed values in the company’s audited accounts. I personally visited some of the so-called property developments and found they were just vacant plots of land.
The principal Director and sole shareholder of these groups was a New Zealand national, ex-insurance salesman who even took a personal loan of $26 million, of which he now claims he can’t repay. The Australian Securities and Investments Commission (ASIC) are doing nothing! We are left to wonder, “Where did the money GO?”
Our group of 50-plus expats have lost most of their life savings via ‘financial advisors’ operating in Thailand. We have since discovered these advisors are not registered by the Thai SEC!
Personally I am now in the position in which I will need to sell our family home as my finances and been substantially affected by LMIM scheme and we are no longer financially secure and I need the money to take care of my family.
CASE #2
I AM a semi-retired British subject, 65, married to a very supportive Thai wife; we have a three-year old daughter.
I was advised by a local Independent Financial Adviser (IFA) to move my UK self-invested personal pension offshore and to invest it into LM Managed Performance Fund which was part of the portfolio of LM Investment Management (LMIM). I recently found out that my IFA is operating in Thailand without a licence, which is illegal.
When LMIM collapsed in 2013 my entire pension of £110,000 was lost, with zero hope of recovery.
I have no other income and am desperately trying to earn money through online sales and also by living on hand-outs from my family. I have recently had to sell my family car to realise income to be able to survive. My meagre old age pension starts on my 65th birthday.
CASE #3
ABOUT ten years ago I decided to sell my business in London and move to Bangkok. My plan was to invest in a business such as a hotel. I bought a condo and started my research. In the meantime I entrusted a large part of my life savings to an International Financial Advisor, who suggested putting £200,000 into LM Managed Performance fund. I was assured it was as safe as houses. Furthermore, as it was based in Australia, it was protected due to their stringent regulations.
It was also suggested I move my UK private pension to a QROPS. This was arranged via trustees based in Hong Kong with a policy with Royal London 360. A further £30,000 was put into LM Managed Performance fund.
I started getting cold feet about LM, worrying that I had too many eggs in one basket. My advisor kept reassuring me but I decided to take £100,000 out. It took much longer than expected to get my hands on ‘my’ money. I complained to my advisor and when I finally received it was wondering if I should take out the rest. He persuaded me to leave it and I even rolled over the annual interest a short time before the collapse. Again I was told it was perfectly safe.
I’ve since read that an advisor in Hong Kong had been warning his clients about LM. If he realised that the fund was toxic, why didn’t others? Incompetence or greed? Apparently LM paid advisors handsome commissions.
The £100,000 I removed was also not safe as my advisor put me heavily into gold which then plummeted. This was done without seeking my prior approval.
Another of my funds, Axiom, also went belly-up. Meanwhile I was/am paying high fees for the service. Royal London 360 apparently continues to take a fee based on the original sum invested in LM. It seems to me that any due diligence done by Royal London 360, my HK trustees, Generali (in the case of Axiom) or my financial advisor wasn’t diligent enough. All of them made a nice income from my investment whilst I have lost nearly half a million pounds. And the response of the Australian government has been very disappointing.
I’m shortly to celebrate my 60th birthday. Sometimes I feel like a prisoner in my condo with very little income to enjoy life. It’s certainly not what I expected for my twilight years.
CASE #4
I AM a 54 year old British expat based in Thailand for over 23 years. I have a Thai wife and two teenage sons, the elder now at university in the UK and the younger one still at international school in Bangkok.
I was first introduced to LM Investment Management by a British ‘Independent Financial Advisor” in Bangkok. He advised me that the LM Currency Protected Australian Income Fund (CPAIF) was an investment suitable for someone as risk averse as myself.
He told me that investing in LMIM was just like putting money in the bank – very safe, and backed by commercial mortgages. The funds were regulated twice under Australian rules, where financial regulation was very strict. In the belief this was all true and his advice was in my best interest I invested £200,000 or most of my life savings.
Since that time I have found the whole premise for my investment to be based on a tissue of lies and what amounts to a heavily veiled Ponzi scheme which targeted not only unsuspecting expat investors, but also vulnerable and aging retirees and pensioners. In fact, I have now observed the whole financial industry to be thoroughly dishonest, inherently corrupt and here in Thailand it is effectively unregulated.
The way local IFAs managed to get away with it is scandalous. While some commission is to be expected, we eventually found out the IFAs were getting about 3% per annum up front.
No wonder they were still conning investors into the LM MPF Fund even four years after the LMIF fund was in trouble and not making redemptions. They knew about it, but out of sheer greed kept chasing the excessive commissions at the expense of the investors’ savings and pensions.
Many of those IFAs are still here in Thailand and looking for new marks. As they schmooze around the expat networking events they create an illusion of respectability but are essentially parasites, living off the commissions and fees for putting investments into any old fund that’s paying good commissions. Many don’t know anything about finance or have any qualifications for it.
It’s astounding to see the number of victims who think their IFA is a mate, and haven’t worked out yet that the IFA is actually the bottom feeder in a chain of conmen who all will get a slice of the investors’ money.
CASE #5
I AM an Australian citizen resident in Thailand for a number of years. I was looking for a secure investment to provide for my daughter’s future education in Australia. I took the advice of a local Independent Financial Adviser to transfer funds I had invested in a secure investment into LM Managed Performance Fund (MPF).
He convinced me that the investment was secure because it was in the Australia real estate sector and the Australia Financial markets are well regulated. I closed the investment and transferred the US$150,000 to MPF in June 2012. The investment was for a three-year term.
In 2013 I learnt that MPF was collapsing and I contacted the IFA asking about the situation. He agreed there were some issues but the assets were strong. Subsequently I learned that I had lost the total amount I had been banking on for my daughter’s education.
The so-called assets backing the investment were grossly overvalued despite repeated audits from supposedly reputable companies. I also learnt that the IFA was most likely unlicensed and was receiving a large bonus for bringing my funds to MPF. As for the supposedly well regulated financial environment in Australia this is clearly a myth. A number of major banks have been exposed with corrupt financial advisers costing thousands of victims their pensions.
ASIC has also proved unable to bring any justice even to the failed audit companies that agree with vastly inflated asset value. The principle of MPF managed to give himself a $26 million pay day before the collapse and has kept this sum.
I AM a 54 year old British expat based in Thailand for over 23 years. I have a Thai wife and two teenage sons, the elder now at university in the UK and the younger one still at international school in Bangkok.
I was first introduced to LM Investment Management by a British ‘Independent Financial Advisor” in Bangkok. He advised me that the LM Currency Protected Australian Income Fund (CPAIF) was an investment suitable for someone as risk averse as myself.
He told me that investing in LMIM was just like putting money in the bank – very safe, and backed by commercial mortgages. The funds were regulated twice under Australian rules, where financial regulation was very strict. In the belief this was all true and his advice was in my best interest I invested £200,000 or most of my life savings.
Since that time I have found the whole premise for my investment to be based on a tissue of lies and what amounts to a heavily veiled Ponzi scheme which targeted not only unsuspecting expat investors, but also vulnerable and aging retirees and pensioners. In fact, I have now observed the whole financial industry to be thoroughly dishonest, inherently corrupt and here in Thailand it is effectively unregulated.
The way local IFAs managed to get away with it is scandalous. While some commission is to be expected, we eventually found out the IFAs were getting about 3% per annum up front.
No wonder they were still conning investors into the LM MPF Fund even four years after the LMIF fund was in trouble and not making redemptions. They knew about it, but out of sheer greed kept chasing the excessive commissions at the expense of the investors’ savings and pensions.
Many of those IFAs are still here in Thailand and looking for new marks. As they schmooze around the expat networking events they create an illusion of respectability but are essentially parasites, living off the commissions and fees for putting investments into any old fund that’s paying good commissions. Many don’t know anything about finance or have any qualifications for it.
It’s astounding to see the number of victims who think their IFA is a mate, and haven’t worked out yet that the IFA is actually the bottom feeder in a chain of conmen who all will get a slice of the investors’ money.
CASE #5
I AM an Australian citizen resident in Thailand for a number of years. I was looking for a secure investment to provide for my daughter’s future education in Australia. I took the advice of a local Independent Financial Adviser to transfer funds I had invested in a secure investment into LM Managed Performance Fund (MPF).
He convinced me that the investment was secure because it was in the Australia real estate sector and the Australia Financial markets are well regulated. I closed the investment and transferred the US$150,000 to MPF in June 2012. The investment was for a three-year term.
In 2013 I learnt that MPF was collapsing and I contacted the IFA asking about the situation. He agreed there were some issues but the assets were strong. Subsequently I learned that I had lost the total amount I had been banking on for my daughter’s education.
The so-called assets backing the investment were grossly overvalued despite repeated audits from supposedly reputable companies. I also learnt that the IFA was most likely unlicensed and was receiving a large bonus for bringing my funds to MPF. As for the supposedly well regulated financial environment in Australia this is clearly a myth. A number of major banks have been exposed with corrupt financial advisers costing thousands of victims their pensions.
ASIC has also proved unable to bring any justice even to the failed audit companies that agree with vastly inflated asset value. The principle of MPF managed to give himself a $26 million pay day before the collapse and has kept this sum.
