Wednesday, February 13, 2013

Wednesday, February 13, 2013
10

HIS CAR WAS TORCHED. HE WAS GUNNED DOWN AND PARALYSED FOR LIFE.

THEN HE GOT FINANCIAL ADVICE IN BANGKOK! **


(Pic:Donald 'Biff' Whiting)

Former U.S. Marine Donald ‘Biff’ Whiting may possibly be resentful of settling down in Thailand with his wife Dolly a senior educationalist.

Readers of this site will already know how he was gunned down in Hua Hin in a housing dispute, and of his fight, so far futile, to get justice, and also the fact that he is now paralysed from the waist down.

It was all about LOCATION, LOCATION, LOCATION, and Biff had bought in the wrong location in Hua Hin.

He had a row with the man he bought a house from, British developer Darren Oxley. Subsequently his car was torched, and finally he was gunned down outside his home.

Oxley's wife and two other men were later charged with the attempted murder - but justice has been slow -  even though the then Prime Minister Abhisit Vejjajiva ordered this case and five others to be fast tracked.
.
Darren Oxley in the Sunday Mirror
Anyway, concerned about how they were going to handle their finances in terms of the ongoing medical bills now that Donald needed 24 hour care, they turned to Bangkok based Andrew Wood, of Platinum Financial Services, Hong Kong, after reading his weekly column in the ‘Bangkok Post’.

Along he came and put together a package for them for a US$1 million.

Now the thing about investments is there is always a risk to an investment, so you need to know your broker knows what he is doing.

But having taken more than his fair share of knocks in Thailand Biff and Dolly optioned for ‘low risk’ ventures with PFS.

Andrew Wood confirmed in writing with a pretty graph showing where all their investments were and gave them the impression that he knew the quoted funds like the back of his hand.


This was on the basis that they were willing to only accept ‘a small financial risk on return (volatility)

Axiom Fund Promo showing the High Court
in the Strand, London. What could be more
kosher than that!
Some 14% per of their investment PFS was put in a fund called ‘Axiom Legal Financing’.

Wood, current holder of the 'Flying Sporran's' IFA Award told them they not need by concerned as that investment was covered by insurance!

But that fund, run out of the Cayman Islands by Briton Tim Schools, has gone bust in yet another financial scandal and Dolly and Biff will never get their money back.

This is what Axiom was allegedly doing.

'Axiom LFF provides short-term, fixed-interest loans to British law firms to finance specific litigation cases and matters of a non-litigious type, such as divorce. To provide investors with a level of capital security, the funding facilities are insured by UK FSA-regulated insurance companies against the possible non-return of the funding by the law firms due to bankruptcy.'

What that means is that Axiom was funding legal cases in the United Kingdom which law firms believed they would win.

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Andrew Wood promo

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Andrew Wood
Axiom's fund was not covered. The legal firms were covered. That's because they all carry insurance against disasters in court!

Actually Axiom said it was also funding private cases against dodgy fund managers which the FSA (Financial Services Authority) was investigating.

And Axiom later announced it was also funding cases on behalf of council house tenants in Britain, whose purchases were mishandled.

Also on Axiom's ad. But this now seems to say - 'We've
got the cash - You have to wait till hell freezes over!'
Axiom was of course not directly regulated by the FSA but in the Cayman Islands where financial irregularities are perhaps not policed so well. The Trustees in the Cayman Islands should have spotted what was going on.

But what was it actually doing? Actually the fund performed okay for a year and even won an award.

But by late last year David Marchant at Offshore Alert was pointing out that Axiom was operating nothing more than a 'Ponzi' scheme, specifically that when they were paying out they were paying out from new investors' money.




Andrew Wood PFS: 'Clients are demanding a more sophisticated service'


The balloon went up last August and by October David Marchant and ‘Offshore Alert’ was soon indicating where the money was going.

The Fund principal, he alleged, was dipping into his own fund.

What's more Tim Schools faced 11 charges in the U.K. including failing to look after the interests of his clients.

Marchant, who said he had received taped evidence of the 'wheeze',  was a little more than concerned.





Biff and Dolly have lost in excess of US$100,000 and seem to have no recourse. It’s unlike they will get 25 cents on the dollar years ahead when the liquidators have finished.

They say they have been told by PFS that they will not even return their commissions of US$5000-US$6000 (on a no entry fee offering)  but instead have been told they will get an additional 5% return on investment on each extra US$100,000 they invest with them.  Hmm. That’s a difficult one.

"The worst case I have seen in 27 years as a journalist"

But this is what David Marchant, who now appears to have been proved right, said they could do?


(Here's the link to that blog) It may not be of much help to people who want to sue in Thailand. But as PFS is Hong Kong based there may be an option.

But can PFS, which evolved out of Barclay Spender International and which backed the now notorious 'Football Fund', be blamed? After all the Axiom Fund was listed by both Royal London and Zurich - those massive mutual life and pension fund guys.

And a lot of much bigger boys got screwed up too - or at least their clients did. These include, it is reported Aegon/Scottish Equitable, AVIVA, Canada Life,CMI Insurance, Friends Provident International,Generali. Irish Life.La Mondiale Europartner S.A and Legal & General International.


The point is there is little to stop Fund Managers doing what they want. Many brokers do not know what they are talking about and often they rubber stamp products on the lists of the above companies.






One of the bullets lodged in  Biff
You know if you play with fire in the markets you can get burned easily. And since the last financial crash there has been no such thing as a 0% risk investment.


Biff took four bullets. The fifth bullet he may just have to bite.

A meeting last night between Biff, Dolly and PFS to improve on the offer above came to nothing. If they withdraw their cash from existing funds, said Dolly, they would lose in the region of US$60,000 - that will be the commissions.


But Dolly and Biff insist they wanted to make low risk investments.

When they asked PFS if they had done due diligence on Axion PFS insisted they had…besides, claimed PFS, added, Axiom was approved by Royal London.

It’s only after he had made the investment that he had received this document, which was actually provided by Axiom to local brokers in connection with their fund warning of a 'substantial risk'.



Substantial risks? some mistake surely. It seems a little stronger than a normal disclaimer - and was followed by


Warning from the Axion Fund itself - not shown to one investor until it was too late. We know happened
in the short term.


A-HA!

But to be fair to PFS, the approval by Royal London and Zurich led other local brokers to also invest in the fund. But two contacted by this site said that in both cases they involved ‘high risk’ players – and even then, added one, 14 per cent of a total investment portfolio in Axiom  ‘seems rather on the high side’.


Yesterday the FSA, which sends me all their judgments, fined UBS nearly £10 million pounds for mishandling the AIG Fund which like Axion went into receivership.

Said the FSA:

'A sample review by the FSA of sales of the Fund to 33 customers found that 19 were mis-sold and a considerable risk that 12 of the remaining 14 may have been mis-sold.  The FSA also reviewed 11 complaints made by these customers and found that all 11 had been assessed unfairly (albeit that six had been upheld by UBS).  UBS has agreed to conduct a redress programme for those customers who remained invested in the Fund at the time of its suspension.  It is estimated that compensation payable to customers will be around £10 million.'

That sounds good until you learn investors put in £3.5 billion.


SO WHAT DID UBS DO WRONG? THIS IS WHAT THE FSA SAID THEY WERE GUILTY OF:  

failing to carry out adequate due diligence on the Fund before selling it to customers, so UBS had an inadequate understanding of the nature of the Fund’s assets and the consequent risks.  In addition, UBS failed to ensure its advisers were provided with appropriate training about the Fund so could not correctly determine its suitability for customers;
advisers recommending the Fund to some customers even though it did not provide the level of capital security that they apparently sought.  Customers were not sent suitability reports when UBS sold the Fund, so customers were not given a record of why the Fund was suitable for them;
indicating to customers that the Fund was a cash fund that invested in money market instruments.  Instead a significant proportion of the Fund was invested in other assets;
The problem of course about investing as an expatriate is what do you do when things go wrong?

Attempts have been made to contact both Mark Kirkham and Andrew Wood ay PFS, Bangkok. They have either been out of office or in meetings. However should they wish to reply they will be given space here.

Update Mark Kirkham rang today 14/2/13 to say: " I don't know you from Adam. I have no comment."


A Flying Sporran Enquiry
** At this point I should say the headline to this article might be considered a slur to those bona fide financial advisors in Bangkok and other parts of Thailand with deserved excellent reputations and who may even advertise here - but they will know what I mean. No such slur is intended.

Updates:

12 February 2013 Dear Shareholders  Re: Axiom Legal Financing Fund, Segregated Portfolio, a segregated portfolio of JP SPC 1 (the "Fund") 
We are writing this letter to update holders of participating shares designated to the Fund ("Shareholders") with respect to recent developments concerning the Fund. 
Today the Honourable Mr. Justice Foster QC granted an order appointing Michael Saville and Hugh Dickson of Grant Thornton Specialist Services (Cayman) Limited and James Earp of Grant Thornton UK LLP (the "Receivers") as receivers for the Fund in response to the directors' application to the Grand Court of the Cayman Islands.  Justice Foster also ordered that Tangerine Investment Management Limited is to pay 60% of the Fund's costs of the receivership application, with these costs to be taxed on the standard basis.  
Going forward, the Receivers will be responsible for the operation and management of the Fund and its assets and we will no longer be involved with the operations of the Fund.  
We expect that the Receivers will communicate directly with Shareholders in the next few days to provide an update to Shareholders and contact information for the Receivers.  In the meantime, the Fund's administrator will forward any e-mails received with respect to the Fund from the investors@jpfa.ky e-mail address or enquiries received from the Fund's website (www.axiomlff.com) to the Receivers. 


Yours faithfully

The directors of JP SPC 1, on behalf of the
Axiom Legal Financing Fund, Segregated Portfolio



10 comments:

  1. But 100,000$ US invested in a condo built by a recognised developer in either Central Pattaya, Pratumnak or Wongamat by the sea in Pattaya would yield him, nett, approx 30,000bt monthly income year round with no risk whatsoever. This beats any other realistic, risk averse, investment available i.e. deposit a/c or bond.
    The poor man is certainly a lightning rod for misfortune.

    ReplyDelete
    Replies
    1. I'm off to buy a condo in Pattaya...is that one of things lots of foreigners jump out of?

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  2. Why would a us citizen use a financial planer in Thailand that is based in Hong Kong ?
    "PFS that they will not even return their commissions of US$5000-US$6000" Why should they their in business to make money.
    There are so many low commission brokers in the USA , e trade scot trade , to name two.
    Tax reporting off shore accounts to the us tax authorities is required by law. Most US citizens in Thailand I talk to ignore this.
    Some US citizens have become convinced that our government now wants to take their money and invest in offshore in hidden accounts to avoid paying their fair share of tax.
    Keep your money at home where you know the law pay your fair share of tax and enjoy the safety and liquidity of the us markets . Investing is risky but to take your hard earned money and give it a offshore "financial planner" or a condo in Pattaya , what more is their to say .
    A simple investment in conservative etf's and blue chip stocks are up 15% in the last 12 months.
    One very successful investor said "never invest in anything you don't understand" Axiom Legal Financing regulated by the FSA but in the Cayman Islands looks like even the finacianl planer did not understand this one! Retired in Thailand living on my investment income and not a financial planner and would never use one.

    ReplyDelete
    Replies
    1. Oh well, trading on the stock market on " blue chip " companies as a means of securing funds for the future is a bit like betting on favourites in any race. Fine if you win but....the markets are currently distorted by QE and will inevitably fall. Everyone knows this but that won't stop brokers peddling their snakeoil to gullible folk.
      Interesting that you should eschew property. I suppose those who bought in Northpoint Pattaya are watching their investment dwindle away as their 6 - 8 million bt investment returns 600,000bt+ annually and the freehold structure falls bit by bit into Patttaya Bay? Paying tax at 12% on the profits and maintenance fees will still see a return of 6 - 8% which compares well with any other punt. Where might the risk be? Lumping all property together irrespective of any analysis and condemning it outright is simply stupid. For any expat resident with disposible cash looking for a return which will benefit him whilst in Thailand sound property is a sensible way to go and an asset he can oversee without reliance upon greedy brokers charging annual fees dependent upon companies and financial institutions with all the morals of a whorehouse.
      Of course the market is riddled with opportunist thieves but these are obvious to anyone with half a brain. Lumpini, Sansiri and Raimonland are all developing in Pattaya but presumably they don't have your business acumen?
      If Biff had bought himself a decent condo anywhere along Wongamat front rank he'd be doing very nicely now. Have you tried to get a short term lease in Northpoint below 50,000bt per month or even Northshore in central Pattaya? It's impossible and even less prestigious but still reliable developments are thin on the ground at 35,000bt. And of course the return is in baht and so not prey to the currency fluctuations eroding the returns from former western investments.
      By the way, trading in a " conservative ETF " is oxymoronic. But then years ago you were probably advising CDOs were the way to go.

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  3. Lighting rod for misfortune indeed. What action has been taken in Thailand? Isn't the financial "advisor" operating illegally in Thailand - has this been reported to the Thai SEC?

    What about the US embassy? With all the new US tax rules and reporting requirements, it would seem there would be some interest in dubious offshore funds being pushed to a former US marine.

    Strange too that the Bangkok Post keeps publishing articles by this group. Perhaps the rumour is true then - they are paid to do so.

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  4. Actually, from 1990 to mid-2000s, a number of financial "advisers" were doing their trade in Tokyo illegally. Many of them had connections to Thailand and I believe some of the major scammers scarpered from Japan to Thailand when the Japan FSA cracked down. The extent is quite amazing.

    http://blogs.metropolis.co.jp/terrie/2010/10/05/where-have-all-the-financial-advisers-gone/

    http://www.fsa.go.jp/en/refer/cold/index.html

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  5. "By the way, trading in a " conservative ETF " is oxymoronic. But then years ago you were probably advising CDOs were the way to go".
    obviously written buy some one that knows nothing about investing. and thinks Pattaya is a safe investment . Im not pushing any thing just tired of self appointed experts leading u.s. expats to invest in their great property schemes and offshore funds . my funds can be hedged using options or sold at the click of the mouse then deposited in a insured bank account in seconds, i can not count the number of investment condos and houses on the market buy absent owners that have left Thailand desperate to sell with no offers (that were all sold to them buy slezey salesman telling them they were a great investment).
    buy the way never owned a cdo and from what i have read they do not in the most abstract way resemble a etf
    keep pushing those condos sure you will find some suckers, im not one of them.

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  6. Some of us in the industry could see this coming a mile off... The blog below was written in March 2012, well before most others started decrying it...

    http://imperiumcapital.blogspot.com/2012/03/too-good-to-be-true.html

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    Replies
    1. Yes Jake - but you did not mention the name of the company, or the players

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  7. I have been ill-advised by Barclay/FSP and have now a substantial amount blocked in funds under " arbitration" . This have been going on for 2 years with Executive of FSP in Bangkok and the CEO in Hong Kong with no result . I would be interested to know if any legal action is possible in Bangkok and if any of FSP client have ever tried to obtain compensation for beeing misled in Fisky invetment without their knowledge ? Vincent Tabuteau

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