In the UK we fight financial fraud through the FCA,tPR and a variety of enforcement agencies which together are “action fraud”. Our Regulators are accountable for ensuring that organisations that they regulate behave properly and that investments that they offer do not put consumer’s money at risk.
The same duties apply to the Channel Islands’ Regulators, the J (Jersey) FSC and the G (Guernsey) FSC who operate in these crown dependencies autonomously from UK regulators.
But these Channel Isles Regulators are not resourced as UK regulators are, and appear to have been used by one United States organisation to legitimise what is turning out to be a Ponzi Scheme.
In as much as the people of the Channel Isles fall under Crown Dependencies, we consider them British, they deserve the same care as mainland people do. But the sorry tale of Lumiere Financial Services and Providence Investment Funds PCC Limited, calls into question the competence of these Regulators and suggests that both Channel Isles and UK consumers think twice before investing through any adviser or fund regulated by the JFSC and GFSC.
The JFSC, who are responsible for overseeing the sales of the funds through Lumiere Wealth have issued three press releases stating they are aware of the train crash happening around them, the most recent of these statements , made earlier this month simply explains that they are aware that the boss of Lumiere has been locked up by Jersey’s joint financial crimes unit. They are listed here http://www.jerseyfsc.org/the_commission/general_information/latest_news/index.asp
Anatomy of a fraud
Here are the facts of the matter as taken from the complaint of the US Securities and Exchange Commission. If you want to short-cut – just read the headlines.
I. Providence Financial and Providence Fund Offer and Sell Unregistered Securities through Unregistered Brokers.
17. From at least as early as 2011, Providence Financial and Providence Fund have been issuing, offering to sell, and selling fixed rate promissory notes to investors in the United States and elsewhere.
18. Generally, the notes pay annual interest rates of 12% to 13%. Investors generally have the option of purchasing a note with a one-year term at or slightly less than 12%, or purchasing a note with a longer term at a higher interest rate. Providence Financial and Providence Fund allow investors to elect to receive monthly or quarterly cash interest payments or take a one-time payment of interest, at a higher rate, upon maturity.
19. Providence Financial and Providence Fund purport to use the proceeds of those notes to generate profits via investment in receivables transactions –a practice they refer to as “factoring” – made through certain affiliated companies in Brazil. At least 400 U.S. investors currently hold at least $64 million in notes issued by Providence Financial and Providence Fund.
20. The notes issued by Providence Financial and Providence Fund are securities, as that term is defined in the federal securities laws.
21. No registration statement has been filed with the SEC concerning the notes sold by Providence Financial or Providence Fund to investors in the United States.
22. Providence Financial and Providence Fund have offered and sold the unregistered notes through a network of unregistered brokers, including Defendants Churchfield and Jarrell.
23. Churchfield, Jarrell, and other unregistered brokers have offered and sold Providence Financial and Providence Fund notes pursuant to agreements with a related Providence Group company that pay the brokers an annual commission in the amount of 6% of the face value of each note sold.
24. Jarrell began selling the promissory notes in March 2012, and has offered and sold the notes to investors with whom Jarrell had an investment advisory agreement in place.
25. In 2015, Providence Financial and Providence Fund paid Jarrell approximately $260,000 in commissions on the sale of the promissory notes. In addition, Providence Financial and Providence Fund have paid for half of Jarrell’s office rent since Jarrell began selling the promissory notes to his clients. Jarrell did not disclose this compensation to any of the investors to whom he sold Providence notes, including the individuals with whom he had advisory agreements in place.
26. Churchfield began offering and selling Providence Fund and Providence Financial promissory notes in 2013. At Providence Financial’s and Providence Fund’s direction, Jarrell provided guidance, training, and assistance to Churchfield on how to offer and sell the promissory notes. In addition to the 6% commission paid to
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CASE 0:16-cv-01877 Document 1 Filed 06/07/16 Page 8 of 18
Churchfield, Providence Fund and Providence Financial paid Jarrell a 3% annual “override” commission on the face value of notes sold by Churchfield. Accordingly, 9% of the proceeds of the investments sold by Churchfield would be devoted, annually, to commissions for Churchfield and Jarrell.
27. In 2015, Providence Financial and Providence Fund paid Churchfield approximately $130,000 in commissions on the sale of the promissory notes, which represented Churchfield’s sole source of income for that year. In addition, Providence Financial and Providence Fund have paid for all of Churchfield’s office rent since he began offering the promissory notes.
28. Jarrell and Churchfield identified potential investors for the promissory notes by, among other things, holding “social security seminars.” In the course of selling notes to investors, both Jarrell and Churchfield explained the investment to potential investors using documents provided to them by Providence Financial and Providence Fund. They met with and answered questions from investors and potential investors, accepted application materials, forwarded signed applications and promissory notes to Providence Financial and Providence Fund, and transferred investor funds to and from Providence Financial and Providence Fund.
29. Providence Financial and Providence Fund offered higher interest rates to noteholders that did not take monthly or quarterly interest payments in cash, but instead allowed interest to accrue until their notes matured. The majority of investors chose not to take monthly or quarterly cash interest payments, but instead opted to allow interest to accrue until the notes reached maturity.
30. When their notes matured, many investors did not take repayment of their principal and payment of accrued interest in cash. Instead, they “renewed” their notes by transferring the principal and any accrued interest on their mature notes into new notes. Both Jarrell and Churchfield walked their clients through the note renewal process, collecting client signatures on new notes and other documents and forwarding those documents to Providence Financial and Providence Fund.
31. At some point in 2015, Providence Financial and Providence Fund begansending Jarrell and other unregistered brokers an “Accredited Applicant Questionnaire”along with other documents used in the note renewal process. However, Jarrell never used this questionnaire with his clients. Moreover, numerous promissory note investorswere not “accredited” as that term is defined in the federal securities laws.
II. The Promissory Note Offering Materials Contain Material Misrepresentations and Omissions.
32. Providence Financial and Providence Fund gave investors only a limited amount of information about the notes or their purported factoring business in Brazil. That information initially took the form of a Providence Fund “Executive Memorandum,” which Providence Fund and Providence Financial provided to investors and the unregistered brokers who promoted the promissory notes.
33. Providence Financial and Providence Fund later provided investors and brokers a document entitled “Providence Financial Investments Inc. High Yield Fixed Returns Information” (the “Information Memorandum”).
34. Providence Financial and Providence Fund additionally promoted, and continue to promote, the promissory notes on a public website: http://www.provfinance.com.
35. Neither the Executive Memorandum, the Information Memorandum, the website, nor any of the other materials that Providence Financial and Providence Fund provided to investors included financial statements or balance sheets related to Providence Financial, Providence Fund, or any of their affiliates. Indeed, when requested by Churchfield to provide such information, Providence Financial and Providence Fund refused, telling Churchfield: “we are not a public company and don’t disclose this.”
36. The Executive Memorandum, the Information Memorandum, and the website provide a general description, and tout the profitability, of the receivables financing business that Providence Financial and Providence Fund purport to conduct in the Brazilian factoring market. These offering materials describe factoring as a financial transaction whereby a business sells its accounts receivable to a third party (the factor) at a discount, and the factor obtains the rights associated with the receivables. In theory, the factor makes money via the spread between the discounted purchase price of the receivables and the supposedly larger amount the factor collects when the outstanding receivables are paid off.
37. The Executive Memorandum describes the promissory notes, and states that Providence Fund will pay noteholders 12% annual interest, with payments to be made monthly. The Executive Memorandum indicates that note proceeds will be used, solely, to finance receivables factoring in Brazil. The Executive Memorandum additionally describes the promissory notes as a “low to moderate risk” investment.
38. Similar to the Executive Memorandum, the Information Memorandum contains a general discussion of receivables financing and factoring in Brazil, but provides scant details about Providence Financial’s or Providence Fund’s operations or how those companies will use investor funds to engage in factoring transactions.
39. The Information Memorandum additionally states that one of Providence Financial’s main philosophies is to: “Provide investment safety with real high yield returns.” The Information Memorandum additionally represents, in a section titled “Charges”: “There are no fixed charges to clients.”
40. The website similarly states, in a section titled “Charges”: “No fees or charges to our lenders [the promissory note holders].”
41. The Executive Memorandum, the Information Memorandum, and website each fail to disclose any use for the note proceeds other than investing in factoring transactions in Brazil. For instance, none of the offering materials provided to investors disclosed that Providence Financial and Providence Fund would pay 6% annual commissions on each promissory note sold. The offering materials additionally do not disclose that, from 2011 to 2015, a small set of Providence Group executives have received nearly $9 million from Providence Group’s U.S. entities.
42. These offering materials also do not disclose information describing the current financial condition, the current assets and liabilities, or the ability to repay investors, of Providence Financial, Providence Fund, or their related entities. Moreover, beyond general statements downplaying the risks of the investment, the offering materials
contain little, if any, disclosures about the risks attendant to receivables factoring, generally, or the promissory notes, in particular.
III. Providence Financial and Providence Fund Face Serious Financial Problems.43. Contrary to their representation that the “sole” use of investor proceeds would be to fund Brazilian factoring transactions, Providence Financial and Providence Fund deployed at least 32% of investor proceeds on expenditures other than receivables factoring.
44. One result of Providence Financial and Providence Fund expending large portions of investor proceeds for uses other than factoring is that they hold receivables investments that are significantly lower in value than their obligations to investors. For example, at year-end 2014, Providence Financial and Providence Fund owed investors more than $52 million, yet their Brazilian affiliates held only $13 million in receivables assets. For 2015, Providence Financial’s and Providence Fund’s obligations to U.S. investors had increased to $64 million, yet their receivables investments had dwindled to $10.6 million.
45. Moreover, Providence Financial’s and Providence Fund’s Brazilian affiliates have faced difficulties collecting certain of their accounts receivable.
46. Providence Financial’s and Providence Fund’s current financial situation appears extremely tenuous. Based on the most current bank statements available, Providence Financial and Providence Fund hold less than $250,000, spread through 28 accounts.
47. Compounding these problems, Brazil’s currency has sharply devalued against the U.S. dollar, with a nearly 50% decline in 2015. As a result, Providence Financial and Providence Fund cannot repatriate their Brazilian assets to repay the U.S. investors without suffering significant currency exchange losses. Accordingly, the only way Providence Financial and Providence Fund are able to repay U.S. investors is through the proceeds of new investments.
48. Nevertheless, Providence Financial and Providence Fund continue to offer the promissory notes to U.S. investors, and do so without disclosing any of the financial concerns described above.
Lumiere and Providence
It wasn’t just US investors who were targeted. Providence had its eyes on Europe and chose the Channel Islands in which to set up.
Lumiere Fund Services was set up by Provident to bring the toxic Providence Financial and Providence Fund into Guernsey’s Protected Cell structures.
Lumiere Wealth was set up by Providence Financial to sell its products in Jersey, these products were made available through a wrapper produced in Guernsey by a sister company – Providence Investment Funds PCC. Lumiere was put into administration in Jersey in July by the Jersey Authorities , shortly after the Guernsey fund house.
Little of Lumiere Wealth’s website survives but they still advertise on Linked In
Lumiere Wealth is an exciting new wealth management company which has launched in St Helier.
Combining local and international expertise with a personal touch, the independent firm focuses on building long-term relationships with both private and corporate clients. Lumiere Wealth’s range of services include investments, savings, pensions, pension transfers, life insurance, private medical cover and general investment advice.
Lumiere Wealth is licenced by the Jersey Financial Services Commission and is led by founder and Managing Director Chris Byrne. Chris has a wealth of experience having worked over 15 years as a Wealth Manager at RBS International & NatWest Offshore in Jersey, where he focused on investment consultancy and management.
Joining Chris is a team of vastly experienced Jersey residents having worked at major financial brands and organisations. The key personnel include Director, Jason Mills, who previously ran the Offshore Investor Solutions sales teams at RBS International; Business Development Manager Andrew Forster, who was an Associate Director at RBS International; and Office Manager Annie Simeon.
Chris said; “We are passionate and pragmatic about what we do. The team of experienced consultants have more than 100 years’ experience collectively, combining effective guidance with personal service. We are very proud of the generation-spanning relationships we nurture with our clients. We aim to provide a friendly professional approach to ensure that our clients’ aims and objectives are understood and will be met with a personal financial plan tailored to meet their specific requirements.”
Lumiere Wealth are keen to be supportive of local events and charities, and are proud to sponsor the Jersey Men’s Basketball Team at the eagerly awaited NatWest Island Games.
Chris and his team look forward to welcoming you and building a long rewarding relationship.
Worryingly, Linked in lists their Specialities as
Investments, Retirement planning, Pension transfers, Life Cover, Protection
This tweet suggest the market that Lumiere was interested in;
Pensions Final-salary-transfers-soar-post-pension-freedoms-6XAeqQQ1LbJ9wTkHD8czjJ/article.html
— Lumiere Wealth (@LumiereWealth) June 8, 2016
//platform.twitter.com/widgets.js
Who has been selling ?
I suspect (having lived and worked in Jersey and managed operations in Jersey and Guernsey, that Chris Byrne’s credentials were pretty watertight. RBS international is a major force in Jersey.
The personal statements of Chris Byrne’s team include this
Having decided that I am far to young to retire, I am pleased to have been provided with a wonderful opportunity to join Chris Byrne and his team at Lumiere Wealth.
For the first time in a long number of years I am now able to focus fully on the aspects of the business that I most enjoy, and do best, which is looking after the financial well being of my clients.
Lumiere’s Former Business Development manager is a member of Jersey Crime Stoppers
Here’s how confident Lumiere were of their reputation for probity – earlier this year!
the way things were!
No boiler room operation
Lumiere was not seen as a boiler-room operation by the Jersey press. This is how Jersey News broke the story to Islanders in August
The fund had been recommended to Jersey clients by Lumiere Wealth Ltd, an independent financial advisory firm with a prestigious office suite at Castle Quay on the Waterfront.
Lumiere Wealth, affiliated to Miami-headquartered Providence Group, was established in Guernsey in 2014 and moved into Jersey only last year and until recently 16 staff were employed in the Jersey office under managing director Chris Byrne.
The premises are a short walk from the JFSC’s offices.
Who have been the victims?
if you’ve read the SEC’s complaint, you’ll see the kind of people who’ve been ripped off in the United States, it seems the successful formula has been replicated here.
The UK first
Providence has a City office in Heron Tower, it may be that this fund was available to UK investors through Lumiere. Lumieres in Jersey had a listing on Unbiased (Jersey). It sold a £25m “minbond” to UK retail investors in 2014. This bond went bust leaving investors £7m out of pocket as reported in the Financial Times. The FT has reported on other connected mini-bonds
The UK mini-bond documents were approved by Independent Portfolio Managers, a Financial Conduct Authority regulated company. IPM also approved documents and acted as a security trustee for the collapsed Secured Energy Bonds mini-bond
The FT investigated this
In June 2015, IPM told the Financial Times that despite being linked to the collapsed SEB bond, it had “tried to increase the oversight” it had of Providence Bonds. IPM did not respond to requests for a comment on this story.
Mini-bonds have attracted thousands of retail investors over the past two years with projections of high returns.
They are not eligible for the Financial Services Compensation Scheme and in the event of a default, investors have found it hard to gain redress. Holders of the Secured Energy Bond were told by two UK financial regulators that their case could not be looked at.
IPM is still trading successfully despite the problems with the investments in Providence Bonds. However the Providence mini-bonds are generally considered toxic by everyone I know in the wealth management industry,
Clearly this news did not get as far as the GSFC who had approved Lumiere Funds the previous year or the JFSC which approved Lumiere Wealth while all this was breaking!
Presumably -whoever was selling Providence mini-bonds in the UK, were doing so through Guernsey.
The Channel Isles next
The undisclosed victims of Lumiere’s activities would appear to be the wealthy of the Channel Isles.
The victims are currently anonymous. It is likely – judging by the list of specialities on linked in , that they will include those in the Channel Islands few defined benefit pension schemes.
Jersey people are understandably quiet about losing their money. Jersey is heavily dependent on financial services and its reputation as a place of probity among the various offshore financial services centres is carefully cultivated.
It is unlikely that the victims of Lumiere and its parent Providence will be making themselves known any time soon
What can we learn?
The facts laid out by the SEC are pretty damning. The arrest of Christopher Byrne suggests that the Jersey authorities consider him complicit in a fraud. Yet – until July of this year, Lumiere was a part of Jersey’s financial establishment. Lumiere’s fund administration business in Guernsey still has an open website advertising the presence of Providence’s CEO – Antonio Buzaneli on its Board
No one could be in any doubt that the principal purpose of Lumiere Wealth was to market Providence funds.
Jersey is a small island where reputations count for a lot. However there appears to have been an acceptance that the reputations of the Lumiere management team were enough in terms of due diligence.
The failure of the JSFC to pick up on what Lumiere were actually selling until the action of their Guernsey counterparts is hard to fathom. What due diligence did the JFSC do on Providence when Lumiere Wealth set up in 2015? Was the organisation just given the nod on the basis of the CVs of Chris Byrne and his colleagues. Why did it not pick up on what had happened in the UK to the failed mini-bonds and did it have no dealings with the SEC who were conducting an enquiry into what was going on in Brazil?
Sadly, all I think we can learn from Lumiere Wealth is that the standards of regulatory oversight of wealth managers in Jersey are in question.
As for the GFSC’s oversight of Lumiere Fund Services and the various protected cells of Providence Investment Funds, this too seems to have been found wanting.
If we can learn anything from Lumiere, Providence and the behaviour of the Regulators is that neither Jersey or Guernsey have proper oversite of the products and services they endorse
If you want to invest in the Channel Islands, be sure to understand what you are investing in, because – quite clearly – no one in authority does!
The SEC blew the whistle
whilst I feel sorry for people who are losing their money in these investments I feel they should be aware that these investments are bogus. if it’s too good to be true then it’s not true. people need to take responsibility for their own decisions and caveat emptor surely applies here. regulators throughout the UK and channel Islands should focus on product regulation. fraudulent selling can then be dealt with by the police
The police? 2,008 reports made to Action Fraud (or is it Inaction Fraud?) since 2013 and only 7 fraudsters either charged or summonsed. And our esteemed regulator gives scammers dressing gowns. Bah humbug!
Brian – I can’t agree with you. We need regulation because people need to be protected. If financial services were simple and transparent then things would be better, but they are not.
All that glitters isn’t gold.
12-13% annual yield in 2012? It certainly raises eyebrows thst should make investors invest some time investigating.
I disagree Heney. Regulation is what makes financial services complex and opaque.
What motivation is there for anyone to become financially savvy when society protects them like children?
Apathy and idiocy beget apathy and idiocy..
And so society dies
Henry. regulators are useless in the UK. the law should cover unregulated products not regulators. society is dying because people lack responsibility and lack a community spirit. the party you belong to decided to sell off council houses and encourage a culture of greed and self interest. society is dying because people expect things to be done for them and those who hold power are happy for them to be exploited. it’s sod all to do with unregulated investments.
We’re always just one more regulation or law away from a utopia that seems to recede further into the distance as we err ever closer to a socialist society.
It’s good business for regulators when there will never be enough.
I wish government would make up their mind what they want.
On one hand they say capitalism and hard work is a virtue, on the other they punish the savvy and reward the stupid. Why bother with the former any more?
Rest in peace the finances of the middle class, the only ones with money left to burn on socialist silliness.
not sure what parallel universe you live in DaveC but the current government is miles away from socialism. the distribution of wealth has rarely been so unequal. not that anyone here was talking about socialism.
Socialism and wealth distribution aren’t related though. Didn’t the USSR and currently Venezuela suffer from huge wealth inequality too?
The point is that big government is the antithesis to free market capitalism.
The desire to protect even wealthy individuals from their own stupidity and greed, rather than just the weakest of society, is a sure sign of socialist policy.
At what point do we just say that no one can lose, paid for by the winners?
Isn’t that the point enterprise fails because there is no reward?
Isn’t that a core failing of the socialist ideology? Isn’t this the reason capitalism was championed to us throughout the last century?
More regulations where safety nets in society are slready abundant, just chills yet more free enterprise.
DaveC I agree that there is far too much protection for people in the field of financial services but the rest of what you say about socialism are a bunch of non sequiturs.
14% roi raised my eyebrows instantly.
Isn’t it an axiom in investing that the higher the roi the higher the likely risk?
Some people certainly acted on greed and/or stupidity.
Caveat emptor is a lesson best worth learning, rather than an endless flow of nannying regulations.
I’m left thinking of this:
https://m.youtube.com/watch?v=Ttgcu01Ffwo
Make people take some personal responsibility or be perpetually responsible for their every mistake.
“people in the field of financial services” – what kind of field is that Brian? From what i can see, the people who fall for scams like Providence are simply bamboozled our of their savings and their pension rights. You don’t have to be rich or even middle class to be scammed. You don’t even have to be stupid or lazy. The point of writing this blog was not to argue for more or less regulation, but to help people to understand the anatomy of a scam and how regulation can work. There are examples in the blog of effective regulation (SEC) and ineffective regulation (GFSC, JFSC and to some extent FCA).
sorry to offend Henry. the point of the blog didn’t need making on this website. we are all.expressing our opinions about what uou said. my opinion is that people are exceptionally naive to get scammed by this or else just allow their common sense filters to be neutralised by greed. and I am not saying people do not need protecting. I am saying that regulators are not capable of offering appropriate protection. that is an opinion borne out by the contents of your article. you then went on to comment “and so society dies” which in my opinion is nothing to do with this blog. the reason society is not what it was is not possible to know for sure. but I opined that thatcher ism has been a significant contributor to the deterioration of society. and that caveat emptor should apply far more than it does in financial services. I must admit I still haven’t got over your ignorant bigoted comments about people from Essex.
Well I’m very surprised you are still reading the blog Brian! I’m grateful you do, please feel free to have a go at me for being a carrot crunching wurzel from the Somerset/Devon borders – we get it every week at Yeovil Town!
We need to protect people from scams because people do stupid things. Yesterday I failed to complete a bet on Anthony at Ascot and lost the opportunity of £400. I am not blaming my iphone, or Betfair – i blame myself! I do agree we need to take responsibility for our actions!
But if you read the full report from the SEC you can see how slippery Providence were, they managed to fool not just ordinary people, but the Regulators. The only way we can stop this happening is for everyone working together – that includes advisers, regulators and investors.
There is every point in writing these articles. The scams continue and (unlike me with my bet) people are suffering hugely. Have a look at the picture of the person at the top of the blog!
Henry you seem desperate to do something and more regulation seems to be the only tool in your box.
Do other strategies exist?
What about the inverse happening?
Less regs, lower costs, higher returns, less demand for outrageous yield and desire for scams, and more savvy investors?
The chances for scammers seem less likely in that environment, but less jobs for boring regulators…
You support blockchain for destroying boring pointless jobs, but it’s the very regulatory bloat you seem to love that will stop that ever happening!
I’m also surprised you qualify the scams seriousness by saying ‘even the regulators were fooled’
That isn’t reassuring if they’re the ones reviewing schemes, or coming if with more regulations.
This is just another reason I prefer to avoid pensions and financial services generally.
It’s a gravy train of incompetence, non jobs, self appointed superiority, yet by this example it’s still fallible and incapable of spotting scams.
My ‘financial services’ pension pot ~ 3% growth per annum for the last 2 years…
My personally invested pot in my own vehicles, 25% per annum for the last 2 years.
From where I’m sitting the legitimised system feels like a scam too.
I’m really not desperate about anything! I’m 55 – in a happy relationship and about to go on holiday. Io have my values and I blog from where I come from and where they take me.
I’m not blogging for you Dave- you are clever and can get 25% return in two years, I’m interested in people who don’t get help.
The legitimised system – called Britain – is something I’m pretty proud of – but it could be better
I want people to get what is best for them too.
I’m just not sure that regulating more is the ideal answer to this quandary, or financial engagement of consumers generally.
A simple question.
Do we want empowered intelligent consumers getting what they know they want, or dependent ones getting what others think they want?
I believe neither offers more or less advantage. I just believe in freedom of choice, and I already find the levels to which regulations constrain my financial choices stifling.
At least give both sides a choice to be dependent or independent.
Let some people get scammed if they want to be liable.
“Let some people get scammed if they want to be liable” – look people want nothing to do with liabilities or scams – they want to be happy, debt-free and want as little to do with money management as possible. It would be great if people were less afraid, less vulnerable and less dependent on the wrong kind of advice!
No people don’t want to be scammed or liable, but despite heavy regulation they have been.
Will regulation changes prevent any more scams for a few individuals, or just add more regulatory burden costs for everyone?
And some people do want to be involved with money management, and more would be if it were simpler.
Fear and vulnerability are unlikely to be resolved with the offer of more dependence on someone else, who employ further complexity and bafflement to provide it.
I believe this case doesn’t warrant more regulation.
These people need to learn hard lessons, not ask society to add more regulatory overhead to protect them from their ‘greed blindness’
I think we all.have the same goals Henry. we just differ on how to achieve them. I happen to think financial services is overly regulated and that additional regulation does not equal higher protection it just equals higher costs and unnecessary complexity for everyone. instead of relying on other people to protect them people should not buy things they don’t understand. and I repeat our regulators have shown a repeated inability to do their jobs. they don’t keep to a budget, they don’t understand what they should be regulating and so focus on easy targets instead. the law should prosecute cases of fraud. fools and their money will always be easily parted and no amount of regulation will change that.
The question is not about “more regulation” – it’s about effective regulation. The JFSC and GFSC are major regulators in terms of size and budget, I question whether they are providing the protection that their resources should give. At one level it’s a value for money issue but there appear to be conflicts between Guernsey and Jersey’s wish to preserve and grow its finance industry and their need to preserve and grow their reputations.
The red flags were simple ignored by the GFSC & JSFC and they carried on regulating this scam and many people loss their life savings. Factoring does work and it can give you high returns but this is about a greedy man at the top not investing the monies where they should of been invested. So you cannot blame investors for being greedy but blame the regulators for not doing their job properly.
Sammy totally agree with you, if the regulators had done their jobs properly none of the investors would have lost their life savings, plus we are told they are not responsible, so who is? We are just told we will get nothing back as no one know where most of our money went, well it is out there somewhere. Reading the providence news it seems there were unregistered people.ie Jarrell and Churchfield being paid nice hefty sums for diddling clients out of their life savings. Why do bad guys always come up smelling of roses, they obviously do not have a conscious,we are working well past our retirement like so many others to keep our heads above water and that is just for everyday living. It also plays havok on your family life, I hope these people suffer for what they have done to people’s lives.