Dolphin Trust and LCF – it’s Germany v England but will it go to penalties?

Speaking at last night’s Transparency Symposium, Prem Sikka, spoke with authority about the advantages of the German regulatory system where pressure is applied from stakeholder groups to get action in a timely way.

As we in Britain await the report on the LCF mini-bond scandal (where losses are around £260m), news is leaking out of Germany that a criminal prosecution is underway against those at the heart of the collapse of Dolphin Trust (now called the German Property Group). Apparently the simple question was asked “why has nothing been done in over a year?”. The Dolphin Trust collapse now looks like claiming over £2bn of savings  (ten times as much as LCF. For the latest news on this you can read Bond Review  , Beat the Banks  or follow the reporting of the BBC’s Shari Vahl on You and Yours.

Shari Vahl told me that her interviews with those promoting Dolphin suggest that many of the advisers felt they were acting in good faith (despite them receiving commissions of typically 20% of money invested. Similarly , the Times reported sympathetically on Wealth Options Trustees , who were the German Property Group’s representatives in Ireland. There appears to have been no problem convincing previously reputable intermediaries that what was clearly a massive ponzi, had strong fundamentals. This is the challenge facing both the German and UK regulators.

Following the progress of LCF and Dolphin Trust investigations will be a useful test of Prem Sikka’s contention that the German regulatory system is both more responsive to consumer pressure and less influenced by the financial lobby. Having listened to an array of speakers talking at last night’s symposium about issues with the FCA, I read again last night Prem’s work for the Labour Party that found itself into its manifesto in 2019. This work is worth promoting beyond political circles,  good examples being linked from this Guardian article

I am pleased to hear that You and Yours will be re broadcasting its recent session on Dolphin Trust having broken the story over a year ago and followed it up earlier this month. It would seem that matters are moving fast in Germany as the scale of the scandal is revealed. Let’s hope that help arrives in times for people like these to get back something from their investment.

Four people interviewed by the BBC with investments in Dolphin 

The behaviour of British advisers in actively selling bonds in Dolphin and the supine failure of the pension platforms that admitted these investments into client portfolios is another test for the FCA.  But this time we have the opportunity to see how the FCA works with the German authorities (the German Property Group is a German company).  This is a chance for the FCA to show – in a post Brexit world – how it compares with its European counterparts.

Smethurst and Lenz – The architects of Dolphin Trust




About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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