Author Archives: Lindell Lucy

‘Financially Toxic’ Savings Plans Generate Morally Toxic Ad Revenue for International Adviser

Expert Criticizes ClaimsInternational Adviser’s most recent “Top Story” was about a Hong Kong adviser named Jessica Cutrera who made unusually honest comments about OCI’s recent ban on the payment of indemnity commissions—a practice which some regard to be a form of bribery.

One effect of OCI’s “ban on bribery” was the death of savings scams, like Zurich Vista, which have indemnity commissions embedded within them.

Commenting on the scams, Jessica Cutrera said, “These indemnified commission contractual saving plans which have been sold in Hong Kong for years – but are illegal in many other developed markets – are long overdue to be removed from sale.”

“I do think there will be a demise of the firms whose primary business was selling these very lucrative savings plans.

“These products are financially toxic and eliminating the sale and the seller is a good thing. Plenty of the IFAs in Hong Kong will survive and thrive, particularly those that have always offered a diverse range of products and services to their clients, not limiting themselves to selling savings plans, and who put their clients’ interests ahead of commissions.

“I sincerely hope that the sale of these or similar products that are harmful to investors does not ever recover.”

While it is laudable that International Adviser would publish a story about an adviser with the audacity to speak the truth, it must also be noted that International Adviser had no qualms about taking ill-gotten money in exchange for promoting a ‘financially toxic’ savings plan—RL360’s Quantum—on a giant banner right next to Cutrera’s scathing quotes:

RL360 Quantum Ad

Screenshot of International Adviser’s article about Jessica Cutrera, surrounded by a giant ad for RL360’s Quantum

Quantum is one of the most notorious savings scams in the Middle East. Numerous victims of the product have shared their horror stories on THIS discussion forum. One angry investor calls Quantum a “piece of shit” and advises other victims to “get out of this product today”.

Presumably, RL360 paid for ad space because it believes International Adviser’s main audience is the type of people who would sell “piece of shit” savings plans like Quantum. If that is true, then International Adviser should maybe consider changing its name to something more appropriate, like this:

International Swindler Magazine

Alternatively, International Adviser could, in the future, choose to have more scruples about the kinds of products it allows to be promoted on its website.

SFC ‘Listens’ to ILAS Victims but Refuses to Answer Questions

Small SFC LogoThis morning, a large group of ILAS victims met with 8 representatives from the Securities and Futures Commission. One by one, each victim told his or her story. Afterwards, Lindell Lucy (author of this blog) gave a PowerPoint presentation which made the case that sales of ILAS fell under SFC jurisdiction—contrary to SFC’s persistent denial. A copy of Lindell’s PowerPoint can be downloaded HERE.

When an SFC executive was pressed to answer whether selling an investment fund within a portfolio bond was an SFC-regulated activity, he answered, “It’s not the right time or place to make a determination on these types of things.”

He was correct. The right time to make a determination on these types of things was at least two decades ago.

Some of the victims at the meeting had been sold a scam investment fund wrapped in an ILAS portfolio bond. These victims previously filed complaints with the Office of the Commissioner of Insurance, but OCI rejected their complaints, arguing that sales of investment funds (even within portfolio bonds) fell outside of OCI’s jurisdiction. In a meeting held on Feb 9th, Insurance Commissioner Annie Choi said that this activity fell under SFC jurisdiction.

An SFC executive declined to comment on Annie Choi’s position.

However, he said that SFC continued to stand by its position as stated in THIS 2009 circular.

When it was pointed out that many of the assumptions and statements in that circular were false, SFC made no comment—just ‘listened’.

Unlicensed, Thailand-Based Financial Adviser Expands Illegal Business Operations Into Hong Kong

Neil Robbirt Profile

Neil Robbirt, CEO of Global Investments

In many parts of the world, commission-driven sellers of dodgy insurance policies and investment funds euphemistically describe themselves as “financial advisers”. Some stretch the truth even further, calling themselves “independent” financial advisers.

This misleading sales tactic has now been outlawed in the UK, but British insurance salesmen who expatriate to poorly regulated foreign countries continue to abuse the English language, as well as the gullibility of inexperienced investors.

Neil Robbirt, CEO of Global Investments, is one of these British salesmen.

Reckless Disregard for Thai Law

Global Investments has been headquartered in Thailand since 1994.  The company’s website states that it has sold financial products to over 3,000 people, and that it is “proud to be one of the most reputable and well-established names in the financial services industry”.

An official from the Thai Securities and Exchange Commission (SEC) has confirmed by email that Global Investments and Neil Robbirt are not licensed to sell investment products in Thailand, a fact which can be verified by checking here on the SEC’s website.

The penalty for selling investment products in Thailand without a license is between two and five years’ imprisonment and a fine of 200,000 baht to 500,000 baht.

An official from the Thai Insurance Commission confirmed by phone that Global Investments is also not licensed to sell life insurance policies.

The penalty for selling insurance policies in Thailand without a license is up to 6 months imprisonment and a fine of 50,000 baht.

Ponzi Scheme Promoter

Global Investments has left a trail of evidence on the internet showing how it misleadingly and negligently promoted the LM Managed Performance Fund (MPF), an unregulated collective investment scheme which is now known to have been a Ponzi scheme. The South China Morning Post has reported that the fund paid upfront commissions as high as 15%. The commission levels were so far above normal that it immediately sent up red flags to numerous industry insiders, such as Martyn Terpilowski, who identified the fund as a Ponzi scheme 4 years before it collapsed.

Below is an advertisement which Global Investments apparently paid for, in its attempt to boost sales and cash in on LM’s juicy commissions:

LM MPF Advertisement - Global Investments

Source: Page 5 of the 16 Sept 2011 Edition of AWOL

The ad claims there were “no fees”, even though the fund manager (LMIM) collected 5-10% per year in fees and paid salesmen up to 9% upfront commissions at the time. The ad also emphasizes that LM was regulated by ASIC, while neglecting to mention that the MPF was not.

The ad appears to target the general public, despite the fact that the MPF was a “professional investor” fund, not intended or suitable for ordinary retail investors.

“Poacher Turned Gamekeeper”

One ex-client alleges that Global Investments sold the LM MPF to over 100 people.

An LM victims group leader says that the company “topped the league table of all unlicensed Thailand-based ‘financial advisers’—both in number of clients trapped in MPF and total value of losses caused.”

After the MPF collapsed, CEO Neil Robbirt joined hands with several other “advisers” who had been flogging the fund. Together, they formed the executive committee of the “Advisers Committee for Investors” (ACI), a group of salesmen purporting to be fighting for the best interests of the people they had screwed. (See here.)

One LM victim cynically describes the ACI as “poachers turned gamekeepers”. Many believe that one of the main objectives of the ACI is to deflect attention away from the executive committee’s own greedy, reckless, and in some cases illegal behavior.

Luring Retirees into High Risk Funds

In an article originally published in the Bangkok Post, Neil Robbirt claimed that most of his clients were retirees and that he convinced them to put their money in funds that were allegedly earning returns of 12-14%.

In the same article, he also plugged the LM MPF’s “fixed rate of return” of 8.32%, which was itself so high that it was too good to be true.

On his company’s website, Mr. Robbirt is quoted as saying, “discretion is guaranteed in the interests of each and every Global client, and we believe we have developed a renowned reputation based on integrity, professionalism and the provision of expert advice.”

A legitimate “expert” financial adviser should know that high rates of return are obtained by taking high risks. An expert adviser should also know that it is reckless for retirees to allocate large portions of their portfolio to high risk assets, as retirees cannot afford to lose a lot of money. Most retirees are too old to reenter the workforce and rebuild a lifetime of savings.

It is therefore hard to understand how funds allegedly earning 12-14%, or even 8%, could be construed as in the best interests of retirees.

A 100% Return Becomes a 100% Loss

In the same Bangkok Post article mentioned above, Mr. Robbirt boasted about a property fund he was recommending. He said he expected investors to double their money.

This particular property fund invested in a “luxury development outside Pattaya called Ocean’s Edge, [consisting] of 32 exclusive penthouse-style apartments with infinity pools developed by an Australian Team.”

After being introduced by a “friend”, one of Global Investments’ ex-clients says Mr. Robbirt convinced him to invest 2.5 million baht in the Ocean’s Edge fund in 2007. He was told he’d get his money back plus 100% profit within three years. He was also promised an additional 15% interest for each year that the money was not repaid on time.

As of 2015, no money has been repaid. The apartments remain empty, as no buyers have materialized.

The ex-client is not optimistic that he will ever see his money again.

Making matters worse, he says Mr. Robbirt also convinced him to sink tens of thousands of pounds in the LM MPF Ponzi scheme, and tens of thousands more in a Zurich policy which he eventually cashed in at a 60% loss.

Below is a promotional video for the unsold Ocean’s Edge apartments:

The ex-client claims that Mr. Robbirt put a deposit on one of the Ocean’s Edge apartments himself. He says Mr. Robbirt used this fact to underline his confidence in the inevitable success of the fund he was promoting. When he was finished promoting the fund, Mr. Robbirt withdrew from the venture and recouped his deposit back.

Mr. Robbirt now claims he never earned a penny promoting the fund, and he takes no responsibility for his clients’ losses or the fund’s failure.

How a “Financial Adviser” Earns His Pay

Another former Global Investments client, who was also introduced by a friend, says Mr. Robbirt convinced him to put over half a million pounds in the LM MPF. The victim describes his experience with Mr. Robbirt as follows:

“Our last meeting was in February 2013. The agenda contained an item expressing reservation over my [relatively high] exposure to the LM MPF. At the meeting the item was met with what could almost be described as a rebuke for suggesting I should decrease my exposure to LM MPF. In no uncertain terms was I assured of the depth, quality and strength of the fund and consistency of performance and he saw no reason to adjust my position.

Less than a month later 2/3 of my life savings had gone.

I raised every aspect of my complaint with him over email and I have asked that at the very least all the LM commission he earnt is returned to me. He would not reveal his earnings but in my estimation it is over £80,000. He has point blank refused to consider any return.”

Dishonest as Ever

Currently, the “About Us” page of Global Investments’ website says:

Our philosophy is based on service through best advice. That means placing our client’s best interests at the heart of everything we do. As an independent company we are not tied to any one product or service provider. This translates into unbiased advice, fair and transparent terms and conditions, highly competitive fees and charges and a range of solutions from global financial institutions in highly regulated jurisdictions with routes of recourse and government backed investor protection schemes.

Before trying to determine how many lies and half-truths are in the above paragraph, consider the following facts:

  • LM victims have had no “routes of recourse” in any jurisdiction, let alone a “highly regulated” one.
  • An “independent” financial adviser, as defined by British law, is one who has no conflicts of interest, i.e., one who does not accept commissions from product issuers and is licensed to give investment advice on all products available in the market. An “independent” financial adviser only receives payment directly from his/her client.
  • Global Investments once paid for advertising in a Thai magazine, but rather than try to sell unbiased advice, it attempted to sell a high commission investment fund (the LM MPF), acting as the de facto marketing division for the fund manager. Global Investments’ website features prominent information about high commission, ripoff insurance wrappers (portfolio bonds), but the website does not mention low-cost, no-commission investment products, such as ETF index funds.
  • Global Investments has withheld information from clients about the commissions it has received. In some cases, Global Investments has claimed that there were “no fees”. News reports indicate that the commissions received by Global Investments were exorbitant. 

Global Investments Expands Into Hong Kong—Without a License

Recently, Global Investments upgraded its website, The company purports to have an office in Hong Kong, situated in the famous and very expensive Two IFC Tower. Former clients say they were previously unaware that Global Investments had an office in Hong Kong.

Global Investments International - Website Home Page

Screenshot of the home page, taken on March 30, 2015

Global Investment’s main website links to an affiliated website,, which contains information that aims to convince former British residents to transfer their life savings into high commission investment and insurance products.

QROPS Direct Website

Screenshot of home page, taken on April 2, 2015

There are no records that Global Investments, QROPS Direct, or Neil Robbirt are licensed to sell insurance and investment products in Hong Kong. Searches on the SFC, CIB, and PIBA websites come up empty.

The penalty for selling investment funds in Hong Kong without a license is up to 7 year imprisonment and a fine of $5 million HKD.

Selling insurance policies without a license is punishable by up to two years imprisonment and a fine of $1 million HKD.

Global Investments’ Hong Kong Office Is Merely “Virtual”

Global Investments’ Hong Kong address is listed as the 19th floor of Two IFC. A Google search for this address brings up links to a company called ServCorp, which offers a cheap service known as the “virtual office”.

Below are some ads excerpted from ServCorp’s website:

Your Address Could Be Here!

Your Phone Answered As You Like

“A Business of Any Size Can Sound Like a Fortune 500 Company”

ServCorp openly admits that it helps small financial services companies dupe potential clients into believing that those companies are more well-established than they really are. The service is a godsend for fly-by-night operators like Global Investments, who do not have a license to operate legally.

“Your Calls Will Find You No Matter Where You Are”

ServCorp offers companies based in one country (such as one with a weak legal and regulatory system) the opportunity to appear to be based in another. Global Investments apparently found this service to be appealing and potentially lucrative.

A Phone Call with a “Global Investments” Receptionist

I made a few calls to the phone number listed under Global Investment’s Hong Kong address. I recorded those phone calls and have uploaded them below.

Clip 1

In the first call, the receptionist answered the phone saying, “Global Investments Hong Kong Limited. How may I help you?”

When I told her that her company appeared to be unlicensed, she tried to transfer me to “Mr. Neil”, the company’s CEO.  I told her I did not want to talk to Mr. Neil, and that I instead wanted to talk to her. When I asked her whether she worked for ServCorp, she admitted that she did.

She then transferred me to Mr. Neil, so I hung up.

Clip 2

When I called again, I asked if ServCorp had a policy of checking whether its clients were licensed to do the businesses they were purporting to be doing. The receptionist said there was no such policy. She then transferred me to another receptionist who pretended that she did not work for ServCorp but instead worked for Global Investments.

At one point, she said she could not hear me and hung up. I am not sure if she was lying.

Clip 3

When I called again, the receptionist continued to pretend that she worked for Global Investments and not ServCorp, so I asked how long Global Investments had been selling investment products in Hong Kong. She said, “Since 2003”.

I repeated that the company appeared to be unlicensed. I asked her if she could tell me whether Global Investments was a “legitimate company”.

She said, “I cannot provide the information for you at this moment.”

I told her that information on the internet indicated that Global Investments had historically been based in Thailand. I asked whether Mr. Neil was currently in Hong Kong or Thailand. She said she didn’t know.

I was eventually transferred to Mr. Neil again, so I hung up.

Clip 4

When I called again, I pointed out that both Global Investments and ServCorp had exactly the same address. I asked the receptionist whether she worked for both companies. She said no. I told her I thought she was lying.

I pointed out again that Global Investments was not licensed to sell investment products, and I explained to her that selling investment products without a license was a criminal offense in Hong Kong.

I told her I wanted to know ServCorp’s policy regarding clients who were breaking the law. I asked whether ServCorp would continue to facilitate illegal activity, or whether it would terminate its business relationship and report illegal activity to authorities.

Before she could answer, we were cut off by a bad connection.

Clip 5

When I called back, the receptionist would not tell me anything about ServCorp’s policy regarding clients who were breaking the law. I concluded by telling her I thought ServCorp should stop doing business with Global Investments and report “Mr. Neil” to the authorities.

Ex-Clients Seek Justice

Many ex-clients of Global Investments have lost significant portions of their retirement savings. They have spent more than two years trying to recover their money, but so far, they have had no success.

Earlier this week, both the Thai and Hong Kong regulators were informed of Global Investments’ unlicensed business operations.

To date, the company has been allowed to operate outside the law for over twenty years without being held accountable.

Indignant ex-clients are hoping that regulators will finally bring Neil Robbirt and his company to justice.

Unlicensed Financial Advisers Defy Thai Regulator After Being Placed on Investor Alert List

In July 2014, Professional Portfolio International was placed on the Thai SEC’s investor alert list after the company was caught selling dodgy, high commission insurance policies and investment funds without a license. Eight months later, PPi appears to be at it again.

PPi Logo (2)

PPi’s website ( remained inactive after it was placed on the SEC’s alert list. However, a few weeks ago, PPi advertised an event at the following venue in Bangkok:

PPI Events March 10

Recklessly, PPi afterwards posted photos of the event on its website, giving the SEC sufficient evidence to take PPi to task for repeated lawbreaking. Two of the photos show PPi’s advisers giving a PowerPoint presentation on “Investing in Managed Futures”.

An angry ex-client has forwarded the above information to the Thai SEC. One of PPi’s advisers, Gary Bradford, advised the ex-client to invest—through a QROPS and a portfolio bond—in the LM Managed Performance Fund, an unregulated fund which paid abnormally large commissions and is now known to have been a Ponzi scheme.

Gary Bradford is visible in the audience in photos 3 and 6 above.

The ex-client claims that Bradford “fraudulently used pretend qualifications from the Chartered Institute for Securities & Investments (CISI, UK)”.

After the ex-client filed complaints with CISI, CISI confirmed that Bradford was not a member and asked him to remove the credential from his LinkedIn profile and business cards. Bradford has not yet removed the credential from his LinkedIn profile.

Gary Bradford LinkedIn Profile

The ex-client has not recovered any money yet, but would be pleased to at least see PPi’s advisers behind bars.

According to an article in the South China Morning Post, the penalty for selling investment products in Thailand without a license is “between two and five years’ imprisonment and a fine of 200,000 baht (HK$48,650) to 500,000 baht”.

Gary Bradford’s photo has been removed from the “Our Team” section of PPi’s website, though he apparently continues to be part of the team. Eric Jordan and Roger Parry are currently listed as senior figures at PPi:

PPI - Eric Jordan & Roger ParryPPi’s website claims that it has an office at the address below. If true, the SEC would do well to pay a visit.

PPI Address

The Great MPF Ripoff: One Index Fund for the Price of Ten

Hong Kong’s MPF system forces everyone to save for their retirement. It also forces them to pay unnecessary fees to multiple layers of various middlemen who add little, if any, value.

Diagram of the Various MPF “Stakeholders” Who Collect Fees


If one buys the exchange-traded fund known as the Tracker Fund of Hong Kong (TraHK) directly off the stock exchange, one will only pay 0.1% per year in ongoing fees. It is the cheapest way to invest in the Hang Seng index.

However, if one invests in the Hang Seng index through an MPF scheme, one will pay up to eleven times more than necessary. This is surprising because most MPF schemes do nothing more than take one’s money and put it in the TraHK, something which many people are willing and capable of doing by themselves without any assistance from fee-collecting middlemen.

Below is a chart which lists all of the MPF funds that invest in the Hang Seng index. The cheapest MPF fund costs 0.69% per year. The most expensive fund is 1.08% per year. 

All of the funds invest in exactly the same stocks, so the differences in fees are a reflection of how efficient (or greedy) the scheme providers are.

Chart - MPF Hang Seng Tracker Funds

FER stands for Fund Expense Ratio. The funds at the bottom of the chart are relatively new, so data is not yet available for them. Info in the chart was obtained from MPFA’s Fee Comparative Platform on March 20, 2015.

HSBC has by far the most money invested in its MPF funds (multiples higher than its nearest competitor), which means HSBC should be able to utilize its economies of scale to offer the lowest fees. However, HSBC charges almost 40% more than the lowest-cost competitor. This indicates that HSBC may be managing its schemes poorly, or perhaps gouging its customers.

MPFA Caps Middleman Fees at Nosebleed Levels

Earlier this month, the MPFA announced a number of new reforms to the MPF system which are supposed to take effect in 2016. One of the purposes of the reforms is to bring down MPF fees.

Every MPF scheme provider will be required to introduce a “core fund” that uses a passive investing strategy, meaning that each core fund will operate like an index fund. The total ongoing fees will be capped at 1%, which is ten to twenty-five times more expensive than a good ETF index fund. (In the US, ETF fees are as low as 0.04%.)

The people at MPFA have suggested that a passively managed fund charging 1% per year is “good value”, raising questions about whether or not they are in touch with reality.

Core Fund FER Capped at 1 Percent (Circled)

Screenshot from MPFA’s June 2014 Consultation Paper, page 5

Although the new fee cap of 1% is allegedly intended to help bring down fees, it will in fact exert zero pressure on many scheme providers. The MPFA has published data showing that the average ongoing fees for MPF index funds is 0.98%—already below the new cap.

Average FER for Index Tracking Funds

Screenshot from MPFA’s June 2014 Consultation Paper, page 33

Without Providing a Rational Explanation, HK Government Protects Financial Interests of MPF Middlemen at the Expense of Ordinary Hong Kongers

When the Mandatory Provident Fund Schemes (Amendment) Bill 2014 was being discussed last year, a man named Peter Wong proposed giving Hong Kongers the legal right to invest their MPF contributions directly in fixed-term bank deposits, individual stocks, and the Tracker Fund of Hong Kong (TraHK) without the high-cost “help” of multiple layers of fee-collecting middlemen.

The government rejected Mr. Wong’s proposal, saying that the MPF middlemen were needed to “save scheme members from undue investment risks”.

In the case of TraHK, this claim makes no sense. Hong Kongers face the same investment risks whether or not they purchase TraHK directly or indirectly via a complicated MPF scheme.

The government also claimed that investing in TraHK via MPF middlemen was “more efficient and flexible” because it allowed Hong Kongers to avoid “small-amount transactions so as to lower the cost impact.”

It is true that upfront fees might be relatively high if one were investing only $1,500 HKD at a time (HSBC charges $50 HKD, which is roughly 3.3%), but if one wanted to transfer a year or more of MPF contributions, i.e. tens or hundreds of thousands of HK dollars, the upfront fee would be relatively low, just a small fraction of a percent.

More importantly, even if one paid a high upfront fee, it would still be far less costly than paying high annual fees for decades on end.

Peter Wong’s Proposal and the Government’s Response

Illustration of the Damage Caused by MPF’s High Ongoing Fees

Suppose one works for 40 years (from age 25 to 65) and invests $1,500 per month in an MPF Hang Seng index fund that costs 1% per year. One will be paying 0.9% more than is necessary, since a direct investment in TraHK costs only 0.1%. 

Due to compounding effects, high annual MPF fees will translate into unnecessary losses that are magnified more and more each year.

If the TraHK averages 6% returns per year, by the time one reaches the age of 65, the losses will amount to $490,316. This is nearly half a million dollars that a Hong Konger could and should be getting for his or her retirement.

The chart below summarizes the math:

Illustration of the Impact of High Ongoing MPF Fees

Numbers were calculated using a compound interest calculator on

Stephen Vines, for South China Morning Post: “It is arguable that the whole scheme is nothing short of being a scandal.”

Yesterday, South China Morning Post published an article written by Stephen Vines, in which he suggested that the MPF system is “nothing short of being a scandal”.

He noted that fees are abnormally high and returns are abnormally low. He contacted an MPFA official to request an explanation for why investors aren’t being allowed to invest directly in ETF funds, such as TraHK, without paying fees to a smorgasbord of middlemen.

He said, “[I] received a response that left me none the wiser as it consisted of a muddled explanation of structures, difficulties of administration and lots of other bureaucratic stuff.”

Vines concluded, “Hong Kong investors can expect to continue being short changed, while in the rest of the world the enormous revolution in the fund management industry is seemingly unstoppable…MPF investors can only look on with envy.”

How to Complain to the MPFA

Ripped off Hong Kongers who want to keep more of their retirement money can complain to the MPF regulator by calling 2918 0102 or by sending an email to

Hong Kong-Headquartered Financial Advice Groups Placed on Thailand’s Investor Alert List

Platinum and Infinity Logo (3)

Companies related to Platinum Financial Services Limited and Infinity Financial Solutions Limited have been placed on the Thai SEC Investor Alert List for unlicensed securities and derivatives business.

Section 289 of Thailand’s Securities and Exchange Act states that any person who undertakes securities business without a license “shall be liable to imprisonment for a term of two to five years and a fine from two hundred thousand baht to five hundred thousand baht and a further fine not exceeding ten thousand baht for every day during which the contravention continues.”

Platinum Financial Services

On Feb 4th this year, the Thai Securities and Exchange Commission (SEC) placed PFS International Consultants Limited on its Investor Alert List for “unlicensed securities and derivatives business”.

According to the SEC alert, PFS International Consultants Limited shares a web address with Platinum Financial Services Limited, a company which is licensed to sell insurance products in Hong Kong. The CEO of Platinum Financial Services Limited is Mark Kirkham.

Kirkham is a member of the general committee of the Hong Kong Confederation of Insurance Brokers, a self-regulatory organization which regulates Platinum Financial Services Limited.

The news about Platinum’s Thai company being placed on the SEC investor alert list was first published on Andrew Drummond’s website, in an article called, “Beware of Newspapers in Southeast Asia Offering Financial Advice“.

More recently, the news was also featured in the South China Morning Post in an article titled, “Hong Kong-linked company appears on Thai SEC alert list“.

Last year, the South China Morning Post also reported that a Platinum-related company was under scrutiny by the Hong Kong securities regulator (SFC) for dealing in securities without a license. The article was called, “Fallen Centaur fund linked to regulatory executive“.

According to Section 114 of the SFO, the maximum penalty for carrying on a business in an SFC-regulated activity without a license is “a fine of $5000000 and…imprisonment for 7 years and, in the case of a continuing offence, to a further fine of $100000 for every day during which the offence continues”.

Ex-clients of Platinum have shared their stories with the author of this blog.

Infinity Financial Solutions

On June 5th, 2012, a company called Infinity Marketing Solutions was placed on the Thai SEC Investor Alert list for carrying on unlicensed securities and derivatives business. The website of the company was listed as

Infinity Financial Solutions Limited is an insurance brokerage licensed to sell insurance products in Hong Kong. Infinity’s CEO is Trevor Keidan. The company’s new website,, states that Keidan resides in Hong Kong.

Infinity was fined by the Hong Kong CIB last month for failure to “maintain…professional indemnity insurance at the required limit of indemnity”.

Ex-clients of Infinity have shared their stories with the author of this blog.

Investment-Linked Insurance Scammers Lure Victims to Macau after Regulators Ban Worst Practices in Hong Kong

The worst types of investment-linked assurance scams (ILAS) were banned in Hong Kong at the beginning of 2015.  Many observers have long speculated that scammers would find ways to circumvent the ban.

One Chinese language newspaper has finally confirmed that the scammers have succeeded:

According to insiders interviewed by The Sun, some unnamed insurers and corporate insurance brokers—with offices in both Hong Kong and Macau—have teamed up to lure unsuspecting victims to Macau, where regulators have not yet banned the corrupt practices and ripoff products which inspired the creation of this blog.

The scammers are specifically targeting mainland Chinese, baiting them with free plane and ferry tickets to Macau, where the victims can be fleeced with impunity. The Sun did not say whether Hong Kongers and local residents of Macau were also being targeted.

[Note: Macau is the “Las Vegas of Asia”, well-known for its casinos. It is just a one-hour ferry ride from Hong Kong.]

The Scammers Make Headlines in Macau

Two days after The Sun reported that mainlanders were being targeted, the Macau Business Daily ran an article titled, “Caution 101“, which is featured very prominently on the newspaper’s home page:

The article states, “Business Daily has approached the Monetary Authority of Macau and the Macau Insurers’ Association to verify the reported practice but had not received a reply by the time the story went to press.”

Media inquiries and headlines such as the one above are no doubt putting pressure on Macau’s regulators to bring the city’s regulations in line with Hong Kong’s.

Hong Kong is currently under pressure to bring its regulations in line with the UK’s.

Who Are the Unnamed Scammers?

The latest reports didn’t say which insurers and corporate insurance brokers were targeting mainlanders, but one of them is likely Convoy. According to Convoy’s 2014 Interim Report, it had 17 brokers in Macau, and its business was growing:

Convoy - Ramping Up Activity in Macau

According to the Monetary Authority of Macau’s website, there are only four corporate insurance brokers authorized to sell ILAS in Macau (see red circles):

One of the four corporate brokers is Sun Hung Kai. A couple of years ago, an ILAS victim told the author of this blog that Sun Hung Kai was heavily promoting Zurich Vista (a very notorious ILAS) and promising so many “free” fund units that it would offset losses incurred by surrendering existing ILAS policies to pay for a new Vista policy.

According to MAM’s website, there are eleven life insurers authorized to do business in Macau:

Below are the provisional 2014 Macau life insurance business statistics for January to September, showing which insurers did the most life insurance business (though not necessarily the most ILAS business):

The top 6 insurers, in terms of gross premiums, are:

  1. China Life
  2. AIA
  3. MassMutual
  4. AXA
  5. FWD
  6. Manulife

It’s not clear which of the above insurers have teamed up with brokers to sell ripoff ILAS products in Macau, but it is certainly not just one of them.

Obama Administration Makes Strong Case for Outlawing “Backdoor Payments” to Financial Advisers

On February 23, US President Barack Obama announced:

“Today, I’m calling on the Department of Labor to update the rules and requirements that retirement advisors put the best interests of their clients above their own financial interests. It’s a very simple principle: You want to give financial advice, you’ve got to put your client’s interests first.  You can’t have a conflict of interest.

Department of Labor officials have denied that commissions will be banned, but Obama’s choice of words (“you can’t have a conflict of interest”) suggests the opposite. The first draft of the new rules will be released in a few months.

Explaining the motivations behind the reforms, Obama cited some very disturbing statistics and academic studies. He also gave a powerful moral argument. Referring to the practice of some fund managers and insurance companies using secret “backdoor payments” to induce financial advisers to recommend their inferior products, he said, “It offends our basic values of honesty and fair play.”

Council of Economic Advisers Publishes a Must-Read Report

On the same day that Obama gave his speech, the White House Council of Economic Advisers (CEA) issued a report, titled, The Effects of Conflicted Investment Advice on Retirement Savings.

The report surveys the academic literature on the topic of conflicted investment advice. The research overwhelming concludes that commissions have a serious corrupting influence on financial advisers and a colossal negative impact on the retirement savings of Americans. The CEA estimates that investors are being bilked out of tens of billions of dollars every year—just in retirement accounts alone.

CEA Debunks the Investment Industry’s Insidious Propaganda

In defense of its deceptive practices, the investment industry never tires of repeating the same ludicrous, self-serving arguments, many of which have no factual or logical basis.

The CEA debunked some of these arguments in its report:

“Some observers have asserted that advising structures using conflicted payments are the only way that savers with lower balances can obtain advice and that without such advice the adequacy of their retirement savings would suffer. This argument, however, falls short in multiple ways and overlooks channels that could provide high-quality, conflict-free advice to moderate-income savers at the same cost as conflicted advising structures.

First, advisers can provide the same quality of advice while receiving non-conflict-based payments as they can when receiving a payment of equal amount based in conflict. The cost of advice depends primarily on the resources necessary to provide it—the adviser’s time, IT infrastructure, and other inputs—rather than the form of the adviser’s compensation. Thus, an adviser receiving payment through non-conflicted structures should be able to provide advice at the same cost as an adviser receiving conflicted payments, as long as the inputs in time and infrastructure are equal. If advisers serving moderate-income Americans can remain profitable regardless of whether they receive conflicted or non-conflicted compensation, one would expect the number of advisers working with lower-balance savers to remain the same regardless of whether conflict-based payment systems remain in use. 

Second, the prevalence of conflicted payments today may actually interfere with low-balance savers’ ability to get advice. Ongoing developments in the financial industry are sharply reducing the cost of advice, but it may be difficult for new entrants providing quality, unconflicted, low-cost advice to compete on price when other advice erroneously appears to be free. Therefore the prevalence of hidden fees and conflicted payments may make it more difficult for low-cost, high-quality alternatives to compete on a level playing field, reducing moderate-income Americans’ available options for inexpensive advice. As just one example, new approaches to advice that exploit technological advances are allowing firms to offer personalized advice at costs well below those of traditional advice.

Finally, savers with modest balances today tend to become savers with larger balances tomorrow. According to the Employee Benefit Research Institute, more than 60 percent of IRA contributors in 2010 contributed in at least one of the next two years and nearly 40 percent contributed in every year from 2010 to 2012 (Copeland 2014). A significant motivator for the services provided to low-balance customers today is likely their potential to become higher balance customers in the future. Financial advisers have strong incentives to work with lower-balance savers regardless of whether using conflicted or non-conflicted payment structures.”

CEA Finds that Mandatory Disclosure of Conflicted Payments Is, by Itself, an Inadequate Solution

Although transparency is desperately needed in the investment industry, the CEA cites academic research that suggests transparency often “backfires” in the case of conflicted payments, resulting in weaker consumer protections and less ethical behavior on the part of financial advisers:

Mandatory Disclosure Is Not a Solution

CEA Concludes Its Report by Highlighting the UK and Australia’s Ban on Conflicted Payments, Implying that this Is the Best Way Forward

After arguing that disclosure of conflicted payments would not effectively reduce exploitation of investors, the CEA introduced some better ideas. The CEA specifically mentioned the United Kingdom and Australia’s ban on conflicted payments:

International Policy Changes to Mitigate Conflicted Advice

US Department of Labor Says, “We Can Fix This”

On Feb. 23, the same day as Obama’s speech, the US Department of Labor released the below video, which summarizes the problem of conflicted investment advice. The video concludes by saying, “We can fix this.”

Coalition of Consumer Groups Petition US Government to End Legalized Corruption on Wall Street

Several organizations, such as the Americans for Financial Reform, the Pension Rights Center, and the Consumer Federation of America, have joined together to support the new reforms being proposed by the Obama administration. The organizations have set up a website,, and have created a petition which can be signed HERE.

Petitioning US Government

US Initiative Will Inspire More Countries to Follow

The United States is the most influential country in the world when it comes to finance. If the US implements significant regulatory reforms—such as a ban on conflicted payments—it will put increased pressure on other countries to follow.

Obama’s latest speech and the White House CEA report are undoubtedly already having international influence, simply by raising awareness of the enormous harm caused by conflicted investment advice and the urgent need for reform.

Useful Links

Obama’s Speech on C-SPAN (with Transcript)

Council of Economic Advisers: Report on the Effects of Conflicted Investment Advice

US Department of Labor: Protect Your Savings

US Department of Labor: FAQ on the New Rules

US Consumer Groups for Financial Reform

Petition: Tell Washington to Stand Up to Wall Street

Post-Implementation Review of the United Kingdom’s Ban on Conflicted Payments (1)

Post-Implementation Review of the United Kingdom’s Ban on Conflicted Payments (2)

Information about Australia’s Ban on Conflicted Payments

LM Sales Manager, Martin Venier, Reappears with Self-Promotional Website

Martin Venier Profile PhotoIf LM victims were wondering what happened to LM’s Hong Kong sales manager, Martin Venier, they now have an answer.

He recently set up a website,, through which he is promoting himself and the financial services of an alleged group of scientific, mathematical, and economic experts.

The alleged group calls itself “Portfolio Resilience Investor Analytical Services (PRIAS)”. A search for the group on the internet retrieves no results, except for Venier’s website.

Portfolio Resilience Investor Analytical Services

One of the services offered by PRIAS is described as “Curation Filtering”. A search for “curation filtering” suggests that the phrase was invented by Venier and his colleagues. Its meaning is unclear.

Note that the words “curation” and “filtering” are synonyms, so joining them together is redundant—a bit like combining the words “bamboozle” and “swindling”.

Self Managed Hedge Fund

Listed under “Curation Filtering” is a service called the “Self-Managed Hedge Fund (SMHF)”.

Unlike “Curation Filtering”, a search for “Self-Managed Hedge Fund” does retrieve results.

One of those results is the “First Meetup for Cybertraders Anonymous“, which took place in Sydney Australia on July 25, 2013 and was organized by a guy named Kingsley Jones.

At the meeting, Jones said he would be giving a presentation on the Self-Managed Hedge Fund, and he’d reveal how to become George Soros “in your bedroom”.

Kingsley J - Become Mr Soros in your bedroom

Six months ago, Jones announced on Twitter that the SMHF had been launched:

Self-Managed Hedge Fund is Here - 27 Aug 2014

On his blog, Martin Venier claims he is in Australia (and very busy with clients), so it’s possible that he is collaborating with Jones, helping to promote the SMHF, aiming to get obscenely rich from his bedroom.

[Note: About six months ago, Venier appeared to be a member of an Australian bitcoin group. This info was obtained from a link which has since been deleted. Several bitcoin scams have recently been in the news.]

The Big Investment Lie

Michael Edesess, author of The Big Investment Lie: What Your Financial Adviser Doesn’t Want You to Know, is scathingly critical of financial advisers and fund managers. He argues that most of them collect unjustifiably high fees for doing little more than ripping off investors.

Given that Edesess’ criticisms are aimed precisely at people like Venier and the others who were involved with the LM scam, it is surprising that Venier published an article written by Edesess on his website:

Edesess Photo on Venier's Website

Photo is of Michael Edesess. He was recently a visiting fellow at City University of Hong Kong. He also wrote a handful of articles for South China Morning Post.

One of Edesess’ quotes perfectly describe the LM debacle:

Corrupt Financial Advisory Services

Another of Edesess’ quotes aptly describe the mumbo jumbo (e.g., “curation filtering”) which Venier’s PRIAS group uses to describe its services:

Complicated-Sounding Products

At first, I assumed that Venier had published Edesess’ article without Edesess’ permission, so I contacted Edesess to warn him.

Stunningly, Edesess confirmed that he had known Venier for years and had given him permission to publish the article.

Even more surprisingly, Edesess told me that he did not believe that Venier was knowingly involved in any fraudulent activity when he worked at LM. He said the LM situation was “complicated”, and he did not believe that Venier should be held responsible.

However, after receiving my email, Edesess contacted Venier and asked him to remove the article from his website, which Venier has now done.

Edesess told me he “did not have time to deal with the matter”, presumably meaning that he did not want to be perceived as connected in any way with LM. He says he is currently working on a start-up in the United States.

Is Venier Innocent or Was Edesess Duped?

Readers of Martyn Terpilowski’s LM Emails will recall that, in late 2011, as Terpilowski was desperately trying to get his clients’ money out of the MPF, Venier made statements which suggested that the fund was operating like a Ponzi scheme. Specifically, Venier suggested that old investors were being paid back with new investors’ money, rather than with profits earned from investments.

When Terpilowski pointed this out to Venier, and when he pointed out that it was unethical (if not illegal) to continue promoting a fund in which existing investors were locked in against their will, Venier just dodged the issues, never giving a satisfactory response.

This was nearly one and half years before LM went up in smoke.

Martin Venier’s Cognitive Dissonance

In a couple of sections on his website, Venier talks about the psychological phenomena of “cognitive dissonance” and “confirmation bias”. Although he does not explicitly say it, it is easy to imagine that Venier is describing his own experiences at LM, particularly his experiences interacting with Martyn Terpilowski:

Martin Venier's Cognitive Dissonance, Internal Pain, and Physical Tension 

Venier no doubt had “uncomfortable feelings” when hearing Terpilowski call the MPF a Ponzi scheme and a fraud. This may have led Venier to seek information which confirmed the views (the LM sales pitch) which he was paid to believe and disseminate.

Venier claims that he created his new website “to prevent us from becoming victims of groupthink”. He seems to believe that he is uniquely qualified to perform this service, perhaps due to his firsthand experience.

Why 'We' Exist (underlined in red)

Notice the paragraph underlined in red. It seems as if Venier is subconsciously warning readers to carefully consider his former role at LM (i.e., the context shaping his current thoughts and actions) before assessing the information and services on his website.

Venier Continues to Criticize Everyone But Himself

After LM collapsed, Venier and Terpilowski had a very heated email exchange, in which Venier insulted Terpilowski, accused him of throwing his clients under the bus in order to cash in on LM’s excessive commissions (when the opposite was true), and he threatened to call the police. Venier never apologized for being wrong or for his role in helping LM defraud thousands of investors (whether wittingly or unwittingly).

Now, on his new website, Venier continues to construe himself as being totally innocent, while simultaneously casting blame on everyone else. He even describes himself as an “advocate for investors”.

Venier specifically blames fund managers (presumably Peter Drake), financial advisers, and investors for having “unrealistic expectations” that the MPF could “generate liquidity and capital stability simultaneously.” He says it was “a task all properly trained financial market practitioners understand is not achievable.”

Presumably, Venier views himself as “a properly trained financial market practitioner” who never had “unrealistic expectations” for the MPF. If that is true, it raises the question: Why didn’t he blow the whistle on Peter Drake and the so-called financial advisers, rather than continue facilitating the fraudulent marketing of the LM MPF to inexperienced retail investors?

Venier maintains he was innocent, but his commentary suggests that he was complicit.

Venier heaps blame on financial advisers for not disclosing the excessive commissions which LM paid, yet Venier is silent on whether LM did anything wrong by paying excessive commissions to incentive financial advisers to distribute a fund which Venier admits was doomed to fail.

Venier additionally criticizes financial advisers for being ignorant, lacking “real market experience”, having “poor formal training”, and promoting the MPF using false or misleading information. (Note that Venier admits to training these advisers, so maybe he should take some responsibility.)

Venier also blames some investors for “lacking savings” (i.e., investing aggressively in MPF’s promise of high and safe returns in order to make up for their lack of savings), which implies that Venier knew the MPF was being illegally/improperly sold to retail investors (i.e., those investors with less than $1 million USD in savings and no professional investing experience).

Below are two screenshots of Venier’s self-written biography on his website. The first screenshot is the original version. The second screenshot shows a paragraph about LM which Venier recently revised. Notice that Venier never actually says he worked for “LM”. Instead, he says he worked for “a fund manager with Australian property assets”.

Original Version

Who Is Martin Venier (Underlined)

Red underlining and comments were added for emphasis.

Revised Section on LM

Venier's Revised Bio (LM Section)

Illegal Activity?

Venier recently removed the content from the “Services” section of his website. It once openly promoted services including: Portfolio Resilience Investor Analytical Services, Curation Filtering, and the Self-Managed Hedge Fund.

The website now says it is not promoting anything:

Services Suddenly Restricted to Members Only

It’s unclear why Venier made the changes, but perhaps he was afraid of being reported to the SFC for violating Section 103 of Hong Kong’s Securities and Futures Ordinance (issuing unauthorized investment advertisements to the Hong Kong public), which is a criminal offense.

A screenshot of all his original service offerings is here:

Martin Venier's Services

Interestingly, the “Contact” page of Venier’s website shows that the PRIAS group is currently doing business in a region which appears to be Hong Kong (see the purple dots):

Current PRIAS Consulting Client Locations Screenshot

A search on the SFC’s website indicates that the PRIAS group is not licensed to do business in Hong Kong. Carrying on a business in an SFC-regulated activity without an SFC license is a criminal offense (see SFO Section 114).

Further Reading

The LM Emails (#7): New Sales Manager, Martin Venier, Implied that LM Was Operating Like a Ponzi Scheme

The LM Emails (#10): When Asked If LM Gave Special Treatment to Bond Investors, Martin Venier Dodged the Question

The LM Emails (#13): When LM Collapsed, Salesman Martin Venier Offered No Apologies—Only Insults and Threats

Chinese Media Warns Public to Beware of Investment-Linked Insurance Ripoffs

On Jan 29, Apple Daily ran an article about a Hong Kong Professor who has recently been very outspoken against ILAS. The professor was ripped off by the insurance company, AXA. He is concerned that thousands of other AXA policyholders may have been ripped off as well. The title of the Apple Daily article is 林本利買壽險遭誤導. So far, the article has gotten over 17,000 views and more than 100 Facebook “Likes”. Here’s a screenshot of the article, featuring a picture of Professor Lam:

Apple Daily Article

Professor Lam writes a column every week for Next Magazine. Each of the past four weeks, he has written about ILAS. In his latest article, he cited this blog (to my surprise). Here are links to his last four articles:

壹週刊:安盛如何守護投保人的紅利? (2015年1月22日)

壹週刊:安盛如何守護投保人的賬戶? (2015年1月29日)

壹週刊:回應安盛的投訴信 (2015年2月5日)

壹週刊:三不管的投連險產品 (2015年2月12日)

On Feb 11, Mingpao ran an article titled 不良銷售投連險 議員促修例監管. The article describes the problems with the insurance self-regulatory system and mentions that LegCo member, Sin Chung-kai, has recently been helping about 20 ILAS victims. The article is spreading via social media and has so far received 40 Facebook “Likes”. Here’s a screenshot of the article, featuring a picture of Sin Chung-kai:

Mingpao Article

On Feb 12, the day after the above article was published, Next Magazine also ran an article on ILAS that included a number of victims’ stories. It was titled, 變種保險失控 食人唔lur骨. If you can’t read Chinese, it does not matter. The picture of victims caught in the jaws of a bear trap tells you all that you need to know:

Next Magazine Article

Note: The above article is pay-walled, so you can’t read it unless you have an online subscription to Next Magazine. A hard copy of the magazine can be purchased at 7-Eleven or Circle K for $20 HKD. The article is four pages long and begins on page 66. (Send me an email if it is sold out and you can’t find it.)

One of my contacts, an ILAS victim, was recently interviewed by a Chinese news organization, different from any of those organizations cited above. There will likely be an article coming out soon. I will link to it below when/if it is published.