Tag Archives: Martyn Terpilowski

Whistleblower

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, MartinVenier.org, 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

Porton Capital CEO Threatens to Sue Ripped Off Investor for Talking to the Media

Porton Capital

Benjamin Robertson of the South China Morning Post has shone a spotlight on yet another investment fund gone bad:

HK Investors Suffer Huge Losses In Bets Through Cayman Islands Firm“.

Porton Capital, like LM and many other collapsed funds, paid excessively large, undisclosed commissions to the financial advisers who helped distribute it. 

Harvey Boulter, the CEO of Porton Capital, admitted that commissions ranged from 15 to 20%. However, like LM CEO Peter Drake, he denies that this was excessive.

Harvey Boulter, CEO of Porton Capital. Source: The Telegraph.

Harvey Boulter, CEO of Porton Capital. Source: The Telegraph.

Robertson’s article quotes an expert on funds like Porton who claims that a 20% commission is “very high” and that commissions normally do not exceed 5%.

Even more disturbing than the 20% commission is the fact that one investor apparently lost 90% of his investment through extra hidden charges. Porton Capital was supposed to use the investor’s money to purchase shares in a company called Enigma. However, 90% of the investor’s money disappeared. According to the article:

In 2006, an earlier Enigma investor paid 26 pence each for the shares. Company accounts show 365.3 million shares were issued at that time, raising £10.6 million (HK$124 million). The issue prices ranged from 2.1 to 4.3 pence.

It is not clear where the remaining 90 per cent of the client’s money went.

One of the Porton Capital victims, David Lewnes, was brave enough to go on the record to talk about his story. He apparently lost 50% of his investment through hidden charges. Upon speaking to the South China Morning Post, Lewnes received legal threats from Porton CEO, Harvey Boulter, who wanted to silence him.

Lewnes says he was sold Porton Capital through a Tokyo-based adviser.

As readers of Martyn Terpilowski’s LM Emails may recall, a Tokyo-based adviser named Fraser Jamieson was flogging both Porton Capital and the LM funds, despite receiving repeated warnings from Terpilowksi that both funds were “dodgy”.

In LM Email #16, Jamieson angrily told Terpilowski to “fuck off” and “spread his doom elsewhere.”

Jamieson’s clients have now suffered catastrophic losses, yet Jamieson has kept his massive commissions and is still doing business. He currently works at a financial advisory firm in Singapore called AAM and is apparently doing well.

Fraser Jamieson - Andrew Drummond

Fraser Jamieson. Source: Andrew-Drummond.com

Heroes of the Life Insurance Industry

In the future, I’ll be posting profiles of individuals and organizations who’ve made noteworthy efforts to educate and protect the general public from exploitative life insurance products. These are the people who’ve acted when regulators have not.

I may not agree with all their views on every topic, but I do believe these individuals and organizations have been forces for the greater good.

I have already written several articles about individuals/organizations who I consider to be heroic. These people/organizations include:

From Singapore

Tan Kin Lin

Tan Kin Lian Says Hidden Commissions and Phony Bonus Units Are Unethical and Could Amount to Fraud

Singapore’s Consumer Champion, Tan Kin Lian, Voices Support for Hong Kong Insurance Industry Reforms

Former Singaporean Presidential Candidate Blasts ILAS, Whole Life, and Other Ripoff Insurance Products

Wilfred Ling

Trailblazing IFA Makes Airtight Case for Banning Commissions; Calls ILAS an Impending ‘MegaBomb’

A Decade of Quotes: Wilfred Ling Speaks the Unvarnished Truth about Financial Advisers

Andrew Hallam

Bestselling Author Slams Insurance-Linked “Donkeys” and Commission-Hungry “Rip-Offers” in Latest Book on Investing

From Hong Kong

South China Morning Post

Browse through THIS LIST of news articles and you’ll find a lot of SCMP’s work.

From Somewhere in Asia

“Hugh Stevenson”

‘A Worldwide Scam of Breathtaking Proportions’: Anonymous Financial Adviser Devotes Entire Book to Exposing ILAS Savings Plans

Martyn Terpilowski

Martyn is a whistleblower who called out LM Investment Management and the financial advisers and insurance companies who helped distribute LM’s funds. See The LM Emails.

The LM Emails (#17): ACI Chairman Continued Selling LM Despite Repeated Warnings Dating Back to January 2009

“The fact that the people who sold the most of the fund now run the ACI – well what can I say… It is like ‘the fox guarding the hen house’”  -Martyn Terpilowski

Blinded by Greed

Despite numerous red flags, advisers all over the world recklessly flogged the LM Managed Performance Fund (MPF). The lucrative commissions were irresistible.

For each year that investors were locked in the fund, advisers received 3%. Thus, a three-year term paid 9%, and a five-year term paid 15%. Advisers could elect to have commissions paid upfront if they wanted (according to Peter Drake).

When the MPF was packaged in a portfolio bond, insurers paid an additional 7 to 8% upfront. Advisers could therefore lock in an immediate payout of as much as 23%, it seems.

The money did not come out of thin air. It came out of investors’ savings.

Given that LM was charging a 5% annual management fee, and the fund’s main asset was still just a scratched up piece of dirt, common sense would dictate that LM’s promised returns of up to 9% per year were unrealistic.

Unfortunately, advisers were blinded by their own greed, and investors were never told all of the facts, especially about commissions.

Simon Litster, Magellan, & the ACI

One of the most aggressive promoters of LM’s MPF fund was Magellan, an advisory firm based in Tokyo. When LM collasped, Magellan reportedly had “200 investors with a combined A$30 million locked up in various LM funds”.

One of Magellan’s directors, Simon Litster, subsequently decided to form a committee of advisers to “fight for investors”. 

Magellan first teamed up with Financial Partners of Hong Kong and then quickly recruited ten other advisory firms who had been LM supporters. The group called itself the Advisers Committee for Investors, or ACI. 

Simon Litster was nominated Chairman. Alison Pockett, Magellan’s founder and president, was designated as ACI’s European coordinator.

As of May 2014, the ACI had recruited 32 advisory firms.

Martyn Terpilowski’s Unwelcome Warnings

From 2003 to 2007, Martyn Terpilowski worked at Magellan. After leaving, he remained in contact with some of his old colleagues, including Simon Litster, Alison Pockett, and Fraser Jamieson.

In January 2009, Martyn sent them an email in which he expressed his first concerns about LM:

“Income is being paid late and things don’t redeem unless you chase, bad signs those and the words property and mortgage don’t fill me with confidence either.”

His former colleagues apparently weren’t as worried. Later that year, Peter Drake told Martyn that Magellan was still a strong supporter of LM.

Martyn wrote to Simon Lister again in December 2009 and forwarded him several emails he’d sent to LM sales manager, Heather McLeash. (Those emails have been published here.)

Martyn warned Litster about major redemption problems, the fact that Drake had lied about those problems, and other facts which suggested that LM was operating like a Ponzi scheme. He invited Litster to call him to discuss the issues further. Litster had zero interest or concern. He replied:

“I will not be calling you to discuss this. If [your firm] choose not to market LM funds then that is their decision…magellan can make it’s own decisions.”

Martyn responded:

if you chose to believe everything [LM says] against what Doctor Doom says so be it – it really does not affect me.

Let’s see then mate – but this has been documented and enough people know about what we know. If this goes wrong, there are no excuses for any of us.

I reiterate I am seriously worried.

Doctor Doom was a nickname Martyn had earned from frequently predicting that suspicious-looking investment schemes were headed for trouble. He was usually correct.

Doctor Doom Is Proved Correct Once Again

Four years after Martyn’s first warnings, LM collapsed. Most observers concluded that the MPF was a fraud. Asset values were grossly overvalued, and redemption payments and income distributions seemed to have been paid with new investors’ money, just like a Ponzi scheme.

Litster sent Martyn an email a few months after LM’s collapse, but it wasn’t to apologize for his earlier conduct. Instead, Litster mentioned that he had been nominated chairman of the ACI, and he wanted to know if Martyn had the contact info of another firm that had sold LM pre-2009.

Litster showed no apparent signs of guilt or shame. If anything, he seemed to be slightly proud of his nomination as chairman.

Martyn was so angry he had to wait till the next day to respond:

“for you and Alison…to now come in acting like the white knight is quite ridiculous…I warned you in a friendly way a few years ago and your response was quite damning.”

Litster didn’t reply to Martyn’s email, and they haven’t spoken since.

ACI’s Hypocritical Blame Game

Since its establishment, the ACI has been focusing most of its energy on blaming Peter Drake and the Australian regulators—and deflecting attention away from advisers’ negligence.

In an interview with the South China Morning Post, Simon Litster admitted that Magellan “knew about problems with the Managed Performance Fund in 2009.” However, “Magellan continued to sell [MPF] into 2012 because LM provided reassurances…including audited reports.”

Litster’s statements suggest that Magellan and others continued selling LM because Peter Drake had bought their trust. They didn’t bother using common sense or questioning the information that Drake provided, as this would have required a small amount of effort and resulted in a pay cut.

Martyn Terpilowski summed it up just one week before LM collapsed: “I realise that the old big upfront commissions are still convincing some brokers to invest money with a company with so many problems… the questions would have to be – why else would u choose LM? I mean there are other alternatives”.

In April 2014, the ACI put on a big show, loudly complaining to the Australian Senate, demanding an investigation into the conduct of ASIC, the Australian regulator.

One ACI member hypocritically stated:

“I have been left feeling incredibly frustrated, disappointed and let down by ASIC, who had knowledge of Peter Drake and the LM disaster looming months before it happened in March 2013. Had ASIC stepped in far earlier, large losses to some clients could have been avoided. I find this borderline criminal negligence in itself.”

Certainly ASIC isn’t blameless, but when ACI members masquerade as innocent bystanders, they are only fooling themselves.

“These clowns really are full of sh1t.”
-Martyn Terpilowski

January 2009

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 18 January 2009 13:14
To: ‘Alison Pockett’; ‘Simon Litster’; ‘Fraser Jamieson’
Subject: Property updates
Importance: High 

Dear All,

I am not trying to cause trouble here and I realise we are all in the middle of a complete disaster but clients are getting increasingly annoyed on lack of updates on failed property investments. I can help with Coco and Edge as an investor myself so have the info, but they are not getting any updates on Dubai Marina or Ropewalk etc. [A client] is livid and I did mail you a few weeks ago, but he has still heard nothing. I am happy to help but you will not give me the info, just telling me that they should go through you.

understand with your JPY [Japanese Yen] and Property exposure this must be an awful time – it is awful for me and I am not as exposed. The perfect storm as warned by Doctor Doom has occurred worse than he could have predicted.. JPY loans – I do know now what was I thinking when I look at a 10 chart!!! Oh well we learn…

I have concerns for LM also FYI. Income is being paid late and things don’t redeem unless you chase, bad signs those and the words property and mortgage don’t fill me with confidence either. [XXXX] told me Brandeaux would never stop redemptions in November as they are not property related!!!!!! I don’t trust any of them. Any smaller fund house – look at Castlestone and FMG – terrible.

Anyway – not to darken the start to your week – but the updates on property is essential as clients are not hearing and blaming me which is not fair!!!. As I said I am happy to help if you let me.

Good luck.

Martyn

December 2009

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 16 December 2009 09:42
To: ‘Simon Litster’
Subject: FW: Hello Heather

Hi Simon

I hope that you are well.. Just a very quick one, but please see mail below I sent to Heather at LM. You do not have to listen to me, but there is something very wrong here for the reasons I have explained below. Putting money into a fund when you cannot get your money out is wrong and money they are getting in is clearly being used to pay redemptions, which is very wrong.

Peter Drake no longer likes me, like Alan Sadd did not for years before everyone else, Kamran Mahmood too.. but Doctor Doom was spot on with nearly everything (JPY loans!!!!)– just wish he had followed his own advice.

This is just FYI anyway as Peter seems to be holding you guys up as great supporters. I do not think that is a good space to be at all.

Have a good Xmas

Martyn

Simon Lister

From: Simon Litster
Sent: Wednesday, December 16, 2009 10:51 AM
To: Martyn Terpilowski
Subject: RE: Hello Heather

Martyn.

I have not forwarded your mail to AP [Alison Pockett] but i will discuss your concerns with FJ [Fraser Jamieson]. How do you know redemptions are being met with new money coming in?

S

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 16 December 2009 11:08
To: ‘Simon Litster’
Subject: RE: Hello Heather

Simon

Give me a call. It is obvious. They have no redemptions right now – indefinitely ([Client 2] has been waiting since May after putting request in, in Jan). Do you think when money comes in, they invest that money, whilst trying to free up other assets to pay redemptions? Obviously not. That is the hallmarks of a Ponze scheme and that has been very obvious for sometime, I have told FJ already, he seems like he wishes not to know. Gteed problems here – I will fwd you the next mail I sent. It really matters little to me – we have not dealt with them for several months now and I am very worried.

Rgds

Martyn

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 16 December 2009 11:11
To: ‘Simon Litster’
Subject: FW: Hello Heather

Please see below and yes you read right Peter Drake stated that he was ‘lying for the greater good’ like Richard Nixon – when he did not make it clear on redemptions earlier.

Simon – surely you are not saying to clients – ‘Invest in this, great return (mortgates and property!!!!),  but is currently closed for redemptions’ are you? So someone is being mislead. Great sales skills though.

Rgds

Martyn

Simon Litster

From: Simon Litster
Sent: Wednesday, December 16, 2009 11:18 AM
To: Martyn Terpilowski
Subject: RE: Hello Heather

Martyn.

I am reading this from home as I am off today for my son’s birthday party. I will not be calling you to discuss this. If [your firm] choose not to market LM funds then that is their decision. Happy to listen to logic and facts and magellan can make it’s own decisions. Don’t however comments like  Invest in this, great return (mortgates and property!!!!),  but is currently closed for redemptions’ are you? So someone is being mislead. Great sales skills though” does not endear you to me or us to be honest. If you continue to make such sweeping statements then please keep your opinions to yourself.

Simon

Martyn Terpilowski

From: Martyn Terpilowski
Sent: Wednesday, December 16, 2009 12:07 PM
To: ‘Simon Litster’
Subject: RE: Hello Heather

Ok Simon.

I have given my logic and the facts, which are in fact very clear. I was not trying to endear myself to you or Magellan – I was trying to help you all. I recently heard from a customer that Magellan are still promoting LM strongly and they were pretty amazed as they were aware of redemption suspensions. I actually cared. None of my statements are sweeping at all – they are all based on facts and clear information. It is ethically incorrect to take money into a fund, where redemptions are suspended. Fact. I am sure that a few years ago, you would have been happy to say that about other companies. It is also very clear that the new money coming in, is being used for redemptions. Again, not sweeping, but obvious. It is also clear that surely this is not being made clear to clients. Again not sweeping, but obvious.

I do not understand how this can be seen any other way. After all the problems we have all had with funds closing and [delayed redemption] shares etc, I would have thought we would all be adopting an initial view of caution on things like this. After all LM have lied all ready about redemptions and the CEO has quoted Richard Nixon of all people (again Fact), so if you chose to believe everything they say against what Doctor Doom says so be it – it really does not affect me.

Let’s see then mate – but this has been documented and enough people know about what we know. If this goes wrong, there are no excuses for any of us.

I reiterate I am seriously worried.

Have a great Xmas.

Cheers

Martyn

October 2011

Martyn Terpilowski

From: Martyn Terpilowski
Sent: Saturday, October 01, 2011 11:54 AM
To: ‘Simon Litster’
Subject: and between me and you

Where do u think Porton is going mate? You are probably aware there is lots of anger brewing about that now also as FJ has sold the back out of it. We are all aware of the insane commissions they were paying and I am very surprised that did get alarm bells ringing… This has gone on for years and if these technologies were so good they would have been sold mate and we all know that and investors would have received some money back. We now have the farcical legal case when 3M are saying Acolyte did not work (why would they say that if not true?) and Harvey Boulter trying to blackmail them. As this appears to be the only technology they have ever sold, I do not think it bodes well…. I think FJ may really regret his boast to me at the [Azabujuban] festival last year that he had still done $1m already….. yes at 15% commission…(he also said I would sell nothing with my attitude)… I guess that was desperation because of all the other business going wrong, but there is definitely trouble brewing here also and this will be worse..

I know u get p1ssed when I say things like this like when I said about LM last yr, but I was trying to help as people like [my client] were going nuts that it was being sold when his money was locked in (and still is)…Now everyone is talking about [Porton Capital]….. I am not being Doctor Doom….

Have a great weekend.

Martyn

June 2013

Simon Litster

From: Simon Litster
Sent: 27 June 2013 21:05
To: Martyn Terpilowski
Subject: LM and ACI

Martyn.

Who do I contact at [XXXX] about joining the ACI (Advisers Committee for Investors)? You may have heard we are deeply involved and I was nominated Chairman. I am co-ordinating brokers in Japan.

Thanks.

Simon

Simon Litster
Senior Partner
MAGELLAN
The Financial Planning Company
Website: www.magellanfp.com

Martyn Terpilowski

From: “Martyn Terpilowski”

Date: 28 June, 2013 10:51:16 am GMT+8
To: Simon Litster
Subject: LM

Simon

Sorry I could not control my anger last night but could not actually believe what I was reading. I have kept quiet on this with you guys so far as did not want to waste my energy, but for you and Alison (or [Financial Partners] in HK for that matter) to now come in acting like the white knight is quite ridiculous. For 3 years I have been battling with LM for my clients money back, all that time brokers have been lining their pockets selling this due to the insane commission levels. I warned you in a friendly way a few years ago and your response was quite damning. I wrote to the regulator and all bond providers telling of my concerns and everyone ignored me. Lets be clear, this was a huge fraud where LM teamed up with brokers and it was facilitated by the life companies who continued to accept this despite numerous warnings. The fund had far less interest from brokers when it paid 3 [percent] and could not be put in a bond. The fund at that stage was far more stable also. During this time despite major financial problems, I stuck to my principals and never sold it, whilst desperately trying to get clients money out. It made no sense and the only reason ppl were placing money there was for commissions which was 16pc in a bond [9% LM + 7% bond], so how was the client ever going to win? During this time I met a very arrogant Fraser telling me how well he doing.. Well anyone could do well selling this and Porton. I really hope it is finally catching up with him. It is very depressing, but the offshore industry is disgusting and the few people I used to respect, have been involved with this. I don’t believe I am the only person who knew this was going to happen, but am one of the few who stuck to their principals. I actually think this was theft and brokers should be brought to account also. I have sent many emails to KordaMentha, documenting my long term concerns and emails proving that I had told the regulator, the life offices and some brokers of my concerns. Everyone just carried on. Now I have to face all these people who made so much money, pretending they were duped too and are setting up committees. This even includes ex LM employees. It is just unbelievable. Sadly that group will be far bigger than my group, due to the nature of this industry. I am mortified for [my clients], but they know I have been fighting for them a long time, since my concerns started.

The people I talk to who bought this from Fraser should also be aware, that he was warned. The people who sold this in the last few years since commission levels were increased, should be brought to account and not be able to act as if they are shocked and there to help. I know I am Doctor Doom.. Just waiting for Porton.

I desperately want out of this terrible industry and I want the world to know how bad it really is.

Rgds
Martyn

Sent from my iPhone

The LM Emails (#16): When Warned about LM, One IFA Told Martyn to Go Away and Spread His Doom Elsewhere

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”  -Upton Sinclair

From 2003 to 2007, Martyn Terpilowski worked at Magellan alongside Fraser Jamieson. After Martyn moved to a different firm, both of them still kept in touch. 

In January 2009, Martyn emailed Jamieson and two other ex-colleagues to share his concerns about a number of funds, including LM (see here). 

Later that year, Martyn emailed Jamieson again to ask if he was still selling LM’s Managed Performance Fund (MPF). Martyn warned that the fund had major redemption issues, which Peter Drake had been lying about. He also mentioned that LM seemed to be using new investors’ money to pay back old investors—like a Ponzi scheme.

Jamieson acknowledged the redemption issues, which he’d already discovered, but he completely ignored the comments about Drake’s lies and LM’s apparent Ponzi activity.

When Martyn asked him one more time if he was still selling the MPF, Jamieson did not answer.

Two years later, Martyn learned that Jamieson had continued selling the MPF, along with Porton Capital, a military venture capital fund which paid a whopping 15% in commissions.

On Dec. 30, Martyn sent Jamieson a Happy New Years message, warning that both LM and Porton were dodgy and dangerous.

Martyn signed off as Doctor Doom, an old nickname he’d earned from correctly predicting that suspicious-looking investment schemes would end in disaster.

Jamieson did not respond politely.

Jamieson ultimately advised his clients to sink millions of dollars into LM and Porton. Those clients are now paying the consequences.

LM MPF investors may only get back 5% of their money. Porton Capital has not yet blown up as Martyn predicted, but investors’ money has been locked up for a very long time and doesn’t seem to be coming back anytime soon.

Fraser Jamieson currently works at AAM in Singapore. He no longer talks to Martyn.

November 2009

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 02 November 2009 15:43
To: Fraser Jamieson
Subject: LM MPF

U still doing more of this??

Something wrong [in my opinion]… just had a meeting with Peter Drake, he does not like a question and admits basically deceiving us about redemptions on MPF – he told me in the summer – no issues with redemptions on MPF, but we have now discovered there have been issues since March at least…. Not good…

They still take money in also which is not good.. probably just to pay redemptions and there is a name for that.

Best regards

Martyn

Fraser Jamieson

From: Fraser Jamieson
Sent: Monday, November 02, 2009 3:46 PM
To: Martyn Terpilowski
Subject: RE: LM MPF

Been issues since March as you say…no need to deceive us as we had clients who were looking to redeem since March so we have known the liquidity issues all along

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 02 November 2009 15:53
To: ‘Fraser Jamieson’
Subject: RE: LM MPF

U still buying this????

December 2011

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 30 December 2011 15:49
To: Fraser Jamieson
Subject: LM….

Is D-O-D-G-E… if u are still doing that as well as Porton, no wonder u want to move…

I am trying desperately to get my clients money out of there.. Peter Drake is a megalomaniac…

U heard it here first…. Doctor Doom.

Happy New Year.

MT

Fraser Jamieson

From: Fraser Jamieson
Sent: Friday, December 30, 2011 4:43 PM
To: Martyn Terpilowski
Subject: RE: LM….

Fuck off and spread your doom elsewhere MT….

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 30 December 2011 16:59
To: Fraser Jamieson
Subject: RE: LM….

I think we both know it is not doom…and have known for a long time… positivity can be very dangerous in the wrong hands and that has been proven time and time again..

I wonder what the powers that be [i.e., Magellan’s management] would have thought if [a very infamous company] had been flogging this kind of thing? Especially after everything else?

[Due diligence] requirements have changed somewhat the worse things have become. How things have changed eh….

Have a good one…

MT

Fraser Jamieson

From: Fraser Jamieson
Sent: Friday, December 30, 2011 5:00 PM
To: Martyn Terpilowski
Subject: RE: LM….

Mate I said fuck off and meant it

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 30 December 2011 17:04
To: Fraser Jamieson
Subject: RE: LM….

I don’t think threatening me is a good idea mate…. Have a good New Year.

MT

Fraser Jamieson

From: Fraser Jamieson
Sent: Friday, December 30, 2011 5:07 PM
To: Martyn Terpilowski
Subject: RE: LM….

?????

It’s not a threat MT…I’m just telling you to fuck off and don’t contact me

Martyn Terpilowski

From: Martyn Terpilowski
Sent: Friday, December 30, 2011 5:10 PM
To: ‘Fraser Jamieson’
Subject: RE: LM….

Ok – no problem.. u are very touchy today.

Have a good one.

MT

The Axiom Emails (#1): “This Industry Is a Shocker – No Wonder I Am Going Mad…”

Axiom Legal Financing was a litigation fund that blew up in September 2012. It appears to have been a scam. The fund’s manager, Timothy Schools, is currently under investigation by the UK’s Serious Fraud Office.

Two months before Axiom went up in smoke, a salesman sent Martyn Terpilowski a promotional email announcing that Axiom had started producing a Japanese language fact sheet, due to increased demand from advisers. 

Because the commission levels were so high and the promised rates of return unrealistic, Martyn had long ago identified Axiom as dodgy and untouchable. Ironically, the promotional email he received suggested that Axiom was a bestseller. He told his colleague, “This industry is a shocker – no wonder I am going mad…”

Martyn is releasing the emails below in response to requests from victims. They’re the only Axiom-related emails he has. He never sold Axiom, and none of his clients were trapped in it. Consequently, he didn’t accumulate hundreds of emails trying to get his clients out, like he did with LM.

Disturbingly, the same guy who was promoting Axiom in July 2012 recently emailed Martyn again to promote another dubious fund. Martyn told him to go away.

Axiom Salesman

From: [Axiom Salesman]
Sent: Wednesday, July 18, 2012 12:40 AM
To: Martyn Terpilowski
Subject: Axiom – Japanese Language Fact Sheet

Dear Martyn,

Due to increasing demand, we have now started to produce the USD Fact Sheet for The Axiom Legal Financing Fund in Japanese (see attached).  If you require the fact sheet for any of the other 5 currency classes translating, please ask and we will be happy to accommodate.

Regards,

[Axiom Salesman]

Partner
www.taylormoor.com

Taylor Moor International is a trading name of Taylor Moor Limited. Taylor Moor Limited is an appointed representative of Porta Verde Financial Services Limited, which is authorised and regulated by the Financial Services Authority (FRN: 519508).

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 18 July 2012 08:26
To: [Martyn’s Colleague]
Subject: FW: Axiom – Japanese Language Fact Sheet

Now there is a surprise…

Martyn’s Colleague

From: [Martyn’s Colleague]
Sent: Wednesday, July 18, 2012 11:25 AM
To: ‘Martyn Terpilowski’
Subject: RE: Axiom – Japanese Language Fact Sheet

Its a popular one!

Kind regards

[Martyn’s Colleague]

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 18 July 2012 11:34
To: [Martyn’s Colleague]
Subject: RE: Axiom – Japanese Language Fact Sheet 

This industry is a shocker – no wonder I am going mad…

The LM Emails (#15): European Sales Manager, Simon Bottle, Defended His Televised False Statements with “Brutal Honesty”

On March 4th, 2013, the Australian Broadcasting Corporation (ABC) aired a shocking documentary about the poorly-regulated and “shadowy world of managed investment companies”. It featured interviews with families and retirees who had lost their life savings. It also featured a long segment about LM Investment Management.

At one point, LM’s London-based European sales manager, Simon Bottle, was shown in a YouTube clip telling a group of potential investors that LM was “highly regulated in Australia”, “regulated twice”, and “regulated as a private bank”. None of the claims were true.

Bottle allegedly made similar claims on his CV, which stated, “LM Investment operates in Australia as a conservative and highly rated private bank.”

Two weeks after the ABC documentary aired, LM went into voluntary administration, and all employees at LM’s London office lost their jobs, including Simon Bottle.

Three months later, Martyn Terpilowski received an email from Bottle, who was promoting a new company he had co-founded called Alpha Diversify, which provides fund distribution services to offshore advisers.

Alpha Diversify

Screenshot of Alpha Diversify’s website

The subject line of the email was “LM Investment – the elephant in the room”. Bottle said he was working with a group of brokers who were well-organized and well-resourced (i.e., wealthy from sales commissions). Their objective was to “maximize adviser/investor outcomes” (i.e., try to help investors recover money while ensuring that negligent advisers wouldn’t have to pay for it). The name of the group of brokers was not mentioned, but it was probably the Advisers Committee for Investors (ACI).

Bottle said the rest of his email was going to be characterized by “brutal honesty”. He claimed that he was shocked when LM went into voluntary administration, and he described how he had personally suffered by losing weeks of salary (some investors had lost a lifetime of savings). Bottle also claimed that the ABC documentary had treated him unfairly by taking his quote out of context. He said, “I was in NO WAY pitching LM as a private bank in the sense of being a private client wealth manager.” (That’s apparently not what his CV said, but regardless, he still seems to have been pitching LM as regulated like a private bank.)

Bottle’s original Youtube video has since been removed from the internet. All that remains is the clip shown on ABC.

Below is Simon Bottle’s email to Martyn Terpilowski, followed by their subsequent exchange of words.

Simon Bottle

On 21 Jun, 2013, at 4:17 PM, “Simon Bottle” wrote:

Dear Martyn,

Alpha Diversify is a fund distribution company Paddy Burtt and I have recently launched into the offshore space. Until March 2013 when the office closed, we were both working for LM Investment UK in London. In this email we confront this LM elephant in the room head on.

One of the main aims of this mail, as a constructive input to the latest LM situation, is to advise that a well organised/resourced and influential committee has been set up by a group of brokers. The group has been formulated to maximise adviser/investor outcomes through a number of means.
If you are not already engaged with the group, we urge you to please contact us and we will provide the details.

We are 100% committed to total transparency as the overriding principle Alpha Diversify is founded upon. The brutal honesty of the below email establishes we are entirely focused on our client relationships being grounded in total openness. This is not an email tirade against our former  employer which would be neither professional nor of use.

The appointment of a voluntary administrator (VA) was a horrendous shock to both Paddy and me, as it was to the whole industry. The London team had the same information as advisers such as audited accounts and fund portfolio specifics that included validated valuations etc. We were aware that the Trilogy/media situation was having an impact on the business, but at no point was the likelihood of administration raised with us, even at the point where the LM CEO was in London days before the VA was appointed. Given how in the dark we were kept on the risk of the administration outcome, we await the findings of the current investigations to provide some objective transparency into the actions of those responsible.

Some of you will want to know how the LM scenario played out for us. On the day the voluntary VA was brought into the LM Head Office, we were informed of the news a few hours ahead of the adviser/investor notification. We were informally told to expect redundancy with virtual immediate effect. It rapidly became painfully apparent that the LM entity structure allowed the VA to immediately cut the international offices adrift. The London office was left with liabilities far in excess of any assets available to cover them. All invoices/bills/salaries historically were paid by LM HQ into the London office but that link had been severed. The London team collectively spent weeks managing the understandable deluge of adviser calls and liquidating the LM UK entity which was effectively unpaid. We will not receive any payment from LM Head Office or the VA for the outstanding salary owed and our notice period. As creditors, the little we can salvage from the
liquidation proceeds will take months to materialise. We are not looking for sympathy – we simply make the point that the LM earthquake struck unannounced at the centre of our lives too and we still are dealing with the major aftershocks.

Continuing in the vein of ‘warts and all’ honesty, I bring to your attention the piece of LM media coverage I was quoted in. A journalist took one snippet from a lengthy videoed presentation I gave in late 2012 where in isolation I said – “We are regulated as a private bank, and regulated as a
fund manager.” It was a clumsy use of words in which I was trying to communicate that, in addition to the ASIC regulation of LM as an investment manager, the AIF as a fund lent to property developers and was also ASIC regulated. I was in NO WAY pitching LM as a private bank in the sense of being a private client wealth manager. My entire presentation made it abundantly clear to a room of market professional intermediaries that LM was an asset manager. This fact is then also reiterated over and over again in the materials required to make an investment including factsheets, fund memorandums and application forms.

The LM experience has been brutal for us all. We at Alpha Diversify have learnt a number of painful lessons. Our priority number 1 is to never be exposed to anything similar EVER again. So what does that mean Alpha Diversify stands for? We demand onshore quality for the offshore market
through nuts and bolts due diligence into simple propositions that can be easily understood. We need to see straightforward structuring without any opaque layers. We will be ruthless in seeking out quality products where the portfolio does NOT rely on valuations of what assets might be worth in the future after additional investment/development. Equally we will not touch any solutions where an investor’s capital value is tied up with the sustainability of the provider’s business unless there is an irrefutably robust balance sheet. We are interested in non-correlation but not at all
costs.

All the above has defined the choice of structured product and fund management providers we will work with.  We are currently for example working on an offshore share class with a UK FCA regulated manager who is to launch a non-correlated fund that invests in only 100% liquid investments with clearly specified and managed risk parameters laid out in the prospectus.

If you have the same aims going forward in product selection, then you now know what we stand for and why we will be OBSESSIVE in avoiding the pitfalls going forward.

Thank you for your time in reading this mail.

Best regards,

Simon

Simon Bottle
Managing Director
Alpha Diversify Ltd
www.alphadiversify.com

Martyn Terpilowski

—–Original Message—–
From: Martyn Terpilowski
Sent: 21 June 2013 08:38
To: Simon Bottle
Subject: Re: LM Investment – the elephant in the room

LM have been dodgy for the last few years and obviously so. Anyone who put new business with them with 9pc commissions and then in a bond in the last few years, should go to prison. I am not sure how much u know much about me but I have been fighting with LM for years to get money out and predicted this. It was no surprise to anyone with half a brain. I don’t want any connection with anyone who was selling this rubbish and I am not surprised at all. 9pc soft commissions means clients gets screwed and I am sure you all knew that. My clients invested in 2005 when commissions were 3pc and u could not wrap in a bond. They have been in redemption queues for years whilst all the idiots were putting money into what was obviously a flawed fund.

I am working directly with KordaMentha and I am aiming to separate myself from all the people who invested in this fund after 2008. I find it disgusting so there is my answer.

Martyn

Sent from my iPhone

Simon Bottle

—–Original Message—–
From: Simon Bottle
Sent: Friday, June 21, 2013 4:55 PM
To: ‘Martyn Terpilowski’
Subject: RE: LM Investment – the elephant in the room

Thanks Martyn.

I appreciate your candour.

I’ll make sure you don’t receive any more contact from Alpha Diversify.

Simon Bottle
Managing Director
www.alphadiversify.com

Alpha Diversify Limited is authorised and regulated by The Financial Conduct Authority (FCA ref 490781)

Martyn Terpilowski

—–Original Message—–
From: Martyn Terpilowski
Sent: 22 June 2013 12:08
To: ‘Simon Bottle’
Subject: RE: LM Investment – the elephant in the room

Candour? It makes my blood boil.. Is Martin Venier involved in this also? Horrible little man that he was… You are either corrupt or stupid and the brokers also. You do not need to explain to brokers that you are sorry as they are responsible also – they knew. As I said 9% soft coms when no money
coming out is worse than a ponze scheme.. Drake was a meglamaniac who surrounded himself by yes people, or people equally as corrupt. To come out and say u are all shocked just shows how disgusting the offshore industry is. Lots of brokers were doing 100% LM in a bond, so getting 16% com – so you were surprised when this fund went bad? Come on… u all lined your pockets and are now trying to cover up for yourself. This mail should go to the Sydney Morning Herald, it is such a joke… When this fund paid only 3% and could not be be put in portfolio bonds, it was a small fund. Why do you think it suddenly started to grow so much during the GFC??… er.. commissions.. No honest broker would have touched it at that.. It never made sense and I have been saying this for 4 yrs.. so please.. I have heard all these idiots acting shocked and it is laughable… You all made a lot of money out of it. The only thing I agree with you on is that the Auditor and Regulator should be in big trouble also, but seriously the rest… a joke.

Hope you can sleep at nights.

Rgds
Martyn

The LM Emails (#14): Two Days After LM Collapsed, Everything Was “Business As Usual at Drake Insurance”

Drake Insurance & Investment Services

Two days after LM went into voluntary administration, Wendy List, a Hong Kong-based employee at Drake Insurance & Investment Services, sent an email to advisers to reassure them that Drake Insurance would continue to pay commissions as usual. She said the changes at LM would have little impact on Drake Insurance, since the companies were separate legal entities.

Martyn Terpilowski was one of the adviser’s who received this email. He responded:

“Most ppl should never touch anything with that man’s name on it ever again. As I have been saying for years – he is a disgrace…You can take me off this list. Sorry.”

Kelvin Fair, the general manager at Drake Insurance, replied by saying “sorry you feel like this” and “thanks for your feedback”.

Soon afterwards, Drake Insurance got rid of Peter Drake’s name by reinventing itself as “Australian Global Insurance Services“.

According to an article in the Sydney Morning Herald:

“Drake is now turning up for work with Australian Global Insurance Services (AGIS) at Beach Road, Surfers Paradise. It is this company that operates his old Drake Insurance and Investment Services. Documents obtained by BusinessDay show it also meets his expenses and provides income to his girlfriend, Maria Magi. [Drake is also reported to be leasing his Mercedes from AGIS.]

The sole shareholder of AGIS, Kelvin Fair, is a long-time associate of Drake, and its sole director, Caroline Hodge, used to be the compliance officer at his $3 billion LM Investment group.”

According to ASIC (the Australian regulator), Kelvin Fair has recently been temporarily banned from providing financial services in Australia because he was caught lying about being a bankrupt. 

However, he is still listed as the general manager of AGIS.

[Correction: A commenter (see below) has pointed out that the webpage listing Kelvin Fair as general manager of AGIS has been hidden (not deleted) on the company’s website. It’s not clear whether he is still the general manager.]

Kelvin Fair

Kelvin Fair

AGIS Screenshot

A screenshot of AGIS’s website

Drake Insurance’s Annoucement

From: Wendy List [wlist@lmaustralia.com]
Sent: Thursday, March 21, 2013 2:39 PM
To: Wendy List
Cc: Kelvin Fair
Subject: Business as usual at Drake Insurance

BUSINESS AS USUAL AT DRAKE INSURANCE 

LM – Our Licensee 

Please be aware that on Tuesday our Licensee ‘LM Investment Management’  has appointed FTI Consulting as their voluntary administrator.

We have listed below some information that will give you some clarity and comfort with regards to Drake Insurance.

Q 1. Is there any cross ownership and cross liability between Drake Insurance & Investment Services and LM Investment Management?

Drake Insurance and Investment Services was licensed through LM Investment Management Ltd though operated as a separate legal entity.

Q 2. How are you licenced now?

We have been granted an alternative license under Drake Insurance and Investment Services.

Q 3. What happens to your commission from Drake Insurance & Investment Services?

Commission will continue to be paid to you as it has been in the past.

Drake Insurance 

Drake Insurance and Investment Services is operating in the normal course of business,  including operations with insurers, and is not in administration.

LM Investment Management Ltd is under voluntary administration. Voluntary Administration is as a proactive approach by the Board to create stability around the responsible entity and investor funds. This is not liquidation or receivership, and neither LM Investment Management Ltd  nor any of the Funds is in liquidation or receivership.  The financial requirements of LM Investment Management Ltd.’s licence remain in order.

Please feel free to call Kelvin or Wendy anytime to discuss any of the above.

Wendy T +852 2234 7870 M +852 9454 2985 E wlist@lmaustralia.com

Kelvin Fair T +852 2234 7870 M +61 408 713 344 E kfair@lmaustralia.com

Martyn Terpilowski

On 21/03/2013, at 5:41 PM, “Martyn Terpilowski” wrote:

Most ppl should never touch anything with that man’s name on it ever again. As I have been saying for years – he is a disgrace. Hopefinally everything has caught up with him now and he ends up behind bars where he belongs. Sadly I am sure clients will take huge haircuts, with most of the money being raised in recent yrs through disgusting commission levels and collusion with dodgy brokers – who knew that clients could not get money out again. I have had clients in waiting lists for 4yrs and desperately tried to get money out as they continued to raise capital without ever telling new investors this (by just raising commissions). I knew this would happen eventually and I was right all along. Peter is a megalomaniac who just does as he wants with total disregard for investors. Voluntary it may be, but there is no chance of LM operating in their current form again and certainly not with Mr. Drake at the helm.

You can take me off this list. Sorry.

Martyn

Kelvin Fair

From: Kelvin Fair [kfair@lmaustralia.com]
Sent: Thursday, March 21, 2013 4:55 PM
To: Martyn Terpilowski
Subject: Re: Business as usual at Drake Insurance

Thanks Martyn,

Sorry you feel Like this with Wendy and I.

Best Regards,

Kelvin Fair

Martyn Terpilowski

On 21/03/2013, at 5:57 PM, “Martyn Terpilowski” wrote:

Not with Wendy and you – with Peter Drake and he owns the company and in my view is a white collar criminal. I wish the staff who have mostly been deceived also, the best.

Martyn

Kelvin Fair

From: Kelvin Fair [kfair@lmaustralia.com]
Sent: Thursday, March 21, 2013 5:03 PM
To: Martyn Terpilowski
Subject: Re: Business as usual at Drake Insurance

Ok Martyn, thanks for your feedback mate sorry it’s not better conditions.

I wish your business all the best.

Best Regards,

Kelvin Fair

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 21 March 2013 17:07
To: ‘Kelvin Fair’
Subject: RE: Business as usual at Drake Insurance 

Good luck also…. My good luck wishes do not extend to Martin Venier who should join Peter in prison, after mercilessly taking money off ppl knowing the situation – if u see him, tell him I asked after him.

Luckily I pulled away from this 4 yrs ago when it became obvious there was something very wrong – sadly some of my clients money is still stuck in there after all that time, despite all the new capital raised through collusion with dodgy brokers and 9% commissions…. Maybe u could ask your boss – where all the money is?

Rgds

Martyn

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

Martin Venier LinkedInLM sales manager, Martin Venier, constantly flew around the globe persuading advisers to put more of their clients’ money into the Managed Performance Fund. Meanwhile, Martyn Terpilowski was desperately trying to get his clients’ money out.

When LM went into voluntary administration on March 19, 2013, Terpilowski fired an email to Venier, saying, “You all have blood on your hands”.

Venier responded by accusing Terpilowski of being one of “those brokers” who were greedy and unethical. He said, “For once in your life, please take responsibility for your actions.” When Terpilowski angrily pointed out that Venier’s accusations were bizarre, hypocritical, and unfounded, Venier threatened to call the Hong Kong police.

The next day, the Sydney Morning Herald printed a scathing news article, which reported that half of LM was controlled by a company registered in Hong Kong, and Drake had used this company to make a $16 million dollar loan to himself. Terpilowski forwarded the news article to Venier and said, “I never saw the HK police today and it would be funny if they arrested me before you? Are u still in HK? Or have u run away…?”

Sources say that Venier is no longer responding to emails. He seems to have disappeared.

Below is an announcement sent to advisers on the day LM collapsed. It is followed by a heated exchange of words between Martyn Terpilowski and Martin Venier.

LM’s Announcement

From: LM Investment Management Ltd [mail@LMaustralia.com]
Sent: Tuesday, March 19, 2013 6:30 PM
To: Martyn Terpilowski
Subject: LM Announcement

www.LMaustralia.com

Financial Adviser/Intermediary Information Only

19 March 2013 Dear Martyn, The information contained within this letter is all that is currently available and able to be provided by LM Investment Management Ltd (LMIM). Our LM offices and regional managers will have no further or additional information available to you at this time.  All queries for additional information should be forwarded to mail@LMaustralia.com. Further information will be forthcoming, and we will send it to you as soon as it becomes available. Announcement


The Board of LM Investment Management Ltd (Administrator Appointed) (LMIM, the company) advises that after full consideration of its obligations as a company and its duties to ensure it acts in the best interests of investors in the LM Funds, it is placing the Responsible Entity, LMIM, into voluntary administration. This is not liquidation or receivership, and neither LMIM nor any of the Funds is in liquidation or receivership. Events over the past couple of weeks, however, have meant that the Company and the funds are in imminent jeopardy of being unable to meet creditor obligations, and hence the appointment. Voluntary Administration is as a proactive approach by the Board to officially bring in independent financial advice across the company and the Funds. This step is believed to be in the best interests of protecting the Funds and maximising returns for investors, and prevent LMIM company cash flow issues going forward. Voluntary Administration has no effect on the structure of the Funds.  The Voluntary Administrator assumes the responsibility for the decision making in the Responsible Entity role, however the funds will continue to be managed in accordance with their governing documents and the applicable Corporations Act and Trustee Law.   The Voluntary Administrators will be working with senior LM investment personnel to optimise investor outcomes. In addition, the Voluntary Administrator must comply fully with its own requirements under the Corporations Act, in its administration role.  All licence conditions of the Responsible Entity have been and continue to be met, and there has been no breach in this regard.  The financial requirements (Net Tangible Assets) of the Responsible Entity licence remain in order. The Funds are unit trusts, the assets of which are separate and segregated from those of LMIM. The process 


Within the next couple of days you will receive a separate communication from the Voluntary Administrator.  It will provide more detail around the process of the Voluntary Administration. The ultimate aim of the Voluntary Administrator is to manage and resolve a solution over a period of time, yet to be worked out and about which you will receive communication. Why make this appointment? 


Whilst the creditor issues rest with LMIM and are quarantined from the Funds, the Funds need to be shielded from any ensuing reputational damage.   The Board considers that the appointment of a specialist bringing with it, as it does, expertise and independence will afford the best protection for the Funds in this regard. What to expect over the next couple of weeks


There is an enormous amount of work to be undertaken this week to ensure the optimal results from this appointment for all the investors in all of the LM Funds.  Many of you will have questions and those questions will be answered.  Please bear with us though, as our response may not be as prompt as usual, due to the expected initial high volume of queries. The Board is earnest in this appointment as the best means of providing arms-length, commerciality and financial analysis to the solutions Further information will be provided, as stated above and below. All LM Funds are now closed pending a full independent analysis by the Voluntary Administrato


Regular Fund updates will continue to be provided via the LM website, www.LMaustralia.com. LM Australian Structured Product Fund 


It will be business as usual for this fund with no financial impact expected as a result of the Voluntary Administrator.   LM and the Voluntary Administrator will communicate directly with Deutsche Bank, the holder and underwriter of the notes in each of the closed end products within the Fund.  Communication to investors and advisors as required will continue.  Any income distributions and the maturity dates of each of the offers within the Fund continue uninterrupted.  A full report will be provided to you following the Voluntary Administrator’s analysis. LM First Mortgage Income Fund, LM Currency Protected Australian Income Fund and LM Institutional Currency Protected Australian Income Fund


We do not expect any change for investors in these Funds.  The manager will continue with the orderly sale of all assets for eventual wind up of the Fund.   Regular periodic capital distributions for investors have commenced, and will continue. Regular communication will continue. The appointment of the Voluntary Administrator brings with it independent, arms-length, specialist financial expertise. LM Australian Income Fund


We expect this Fund will continue to be managed as it has been, according to its main documents. The Voluntary Administrator is conducting a full analysis in conjunction with senior investment personnel from LM and on its completion a report will be provided for you. LM Managed Performance Fund


We expect this Fund will continue to be managed as it has been, according to its main documents.  The Voluntary Administrator is conducting a full analysis in conjunction with senior investment personnel from LM, and on its completion a report will be provided for you. The appointment of the Voluntary Administrator brings with it independent, arms-length, specialist financial expertise. LM Cash Performance Fund


We expect this Fund will continue to be managed as it has been, according to its main documents. The Voluntary Administrator will release a report on the Fund as soon as possible. In Conclusion


This decision has been well considered in consultation with independent specialist accounting and solvency practitioners and with independent legal counsel.  LMIM cannot run a risk of being unable to pay its creditors, and this is the process being established to work out the issues.  LM is acting to maximise outcomes for all investors. Yours Sincerley, The Directors LM Investment Management Ltd Download a PDF version of this update The LM products are solely for distribution via financial advisers and intermediaries. LM requests investors consult a financial adviser and read and consider the relevant disclosure document before making any decisions on their investment.  The LM Funds are not bank deposits.  This communication is general information on the LM funds issued by LM Investment Management Ltd. privacy | contact us © LM Investment Management Ltd 2011 Responsible Entity & AFSL No. 220281 ABN 68 077 208 461

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 19 March 2013 18:40
To: ‘Martin Venier’
Subject: FW: LM Announcement

So now all them poor b@stards who carried on placing money with you after being deceived are in trouble… plus my clients who have been trying to get their money out. This is a mis-managed mess and should have stopped taking money from people years ago. You all have blood on your hands for that as do all the disgusting brokers who took 9% and ignored all the obvious signs that this was going this way.

How predictable was this? I can’t believe I have been the only one knowing this was coming for the last 4 yrs…

Unbelievable.

Martyn

Martin Venier

From: Martin Venier [mvenier@lmaustralia.com]
Sent: Tuesday, March 19, 2013 6:45 PM
To: ‘Martyn Terpilowski’
Subject: RE: LM Announcement

Dear Martyn, For once in your life, please take responsibility for your actions.  You boasted to me about how [much you made] in commissions one year.  I hope you are happy with the successful sales you have made to earn your commission.  You are one of those brokers I am afraid and I feel sorry for your clients.  Please do not email again.  Kind regards, Martin

Martin Venier Regional Manager International | Treasury +852 2501 0262 | +61 2 8268 0100| +852 2530 1076 | mvenier@lmaustralia.com A 16/F Aon China Building 29 Queens Road Central, Central, Hong Kong S.A.R. | 16/F Aon China Building 29 Queens Road, Central, Hong Kong S.A.R.

www.LMaustralia.com

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 19 March 2013 18:55
To: ‘Martin Venier’
Subject: RE: LM Announcement

Yes u tosser – I made good sales being honest and my clients like me, I just made a mistake getting involved with LM, but for 4 yrs have been desperately trying to get my clients money out as I knew this was coming and I have told u that many times.– I could have carried on selling this sh1t and made a fortune but I did not as I knew and I was right and u are an absolute shyster for writing this and I hope to see you very very soon. You have continued to sell this knowing the problems and paying high commission, you should go to prison. I certainly hope I see you out and about this weekend, you disgusting little person.

Rgds

Martyn

Martin Venier

From: Martin Venier [mvenier@lmaustralia.com]
Sent: Tuesday, March 19, 2013 7:06 PM
To: ‘Martyn Terpilowski’
Subject: RE: LM Announcement

Dear Martyn, your threatening email and the others you sent have been forwarded to head office and we will contact the HK police tomorrow as a result.  Please do not communicate with me again.  Kind regards, Martin

Martin Venier Regional Manager International | Treasury +852 2501 0262 | +61 2 8268 0100| +852 2530 1076 | mvenier@lmaustralia.com A 16/F Aon China Building 29 Queens Road Central, Central, Hong Kong S.A.R. | 16/F Aon China Building 29 Queens Road, Central, Hong Kong S.A.R. www.LMaustralia.com

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 19 March 2013 22:59
To: ‘Martin Venier’
Cc: ‘Debbie Leung’; ‘Peter Drake’; ‘[Martyn’s Colleague]’
Subject: RE: LM Announcement

Martin

You can send your emails to your Head Office and the Hong Kong Police – that is fine. I have not threatened physical violence but for sure I would love to see you and look you straight in the eye. The only physical threat of violence ever in our relationship was offered by you at your office, when you stood up and smashed your fists on the table asking how I dare come to your office and question your integrity… I am sure Debbie would concur as she was there. You soon sat down when you realised that you are 4 foot tall and I am not. I was completely right to question your integrity as I always knew I was.

Your comment below regarding ‘taking responsibility for my own actions’ is quite ridiculous Martin and I am happy to take my LM dossier to any regulator in the world. I have lots of evidence to prove that for over 4yrs I have never invested with LM and questioned everything about LM. I have taken this up with all the bond providers and constantly suggested that they do not deal with you due to the constant lies and deceit. I did very well in the good years for the markets but not with products paying 9% commission in bonds. When I did all my LM, it paid 3% Martin and people could get there money out again. You can try to blame me as much as you want but I have a ridiculous amount of evidence to prove that I have questioned you for years and always knew this would happen. Throughout this time I did no LM business despite the ridiculous rewards on offer. During this time you constantly travelled the region selling more and more of this products which was basically gated to unsuspecting clients who were never told the truth. You pass the blame to the brokers (you know I did none and that can be proved easily), but it was obvious if the truth was known, no one would ever buy this. I have documented this time and time again and have a very good dossier on LM. I have had your number since day 1 and you know it and saying that I was in on it absolutely pathetic and juvenile. I honestly believe you should go to prison as money taken in the last few years has been taken through false pretences, all the time knowing that you were in trouble. The brokers who sold it should also be in serious trouble as there was no way they did not know the stupid risks they were taking with client’s money. You like your boss Peter Drake have always acted like a megalomaniac, passing off your obscene commission levels and the nonsensical nature of everything LM, as me not understanding Australia. Well Martin I did and am clearly far cleverer than you are as I predicted this in every meeting that we ever had and collected as much evidence as possible, so no Martin, I am gutted for my clients but always knew this was coming and they know I have done everything to help them. In another respect at least this stops your lies and all your dodgy brokers will finally stop making money from this sham as it is basically theft and I hope you have to answer for it instead of writing ridiculous emails like the one [above]. It is theft as I have told you many times – it was sold without the facts and clients were lied to repeatedly and it was encouraged by you and your superiors. I can take responsibility as do not have such blood on my hands as you clearly do. There is a very good email trail to prove this Martin, I am sure you know that

Please forward this email to your head office, your lawyers, the regulator, the Hong Kong police or anyone else… I hope to see you in a courtroom somewhere soon mate…

Sleep well.

Martyn

Martyn Terpilowski

From: Martyn Terpilowski
Sent: 20 March 2013 23:20
To: ‘Martin Venier’
Cc: ‘Debbie Leung’; ‘Peter Drake’; ‘[Martyn’s Colleague]’
Subject: RE: LM Announcement

http://www.smh.com.au/business/when-drakes-empire-came-crumbling-down-20130320-2geq9.html?skin=text-only

Martin – u little scumbag… can I use the word scumbag..? Is that threatening to u? because u are a scumbag aren’t u? I never saw the HK police today and it would be funny if they arrested me before you? Are u still in HK? Or have u run away u evil little thief? U must hate me as I was right about everything and whatever u say that is not true, I can prove it all.  I could have written this article couldn’t I? I will write the one tomorrow and your name will be all over it, I assure u..….. Do not worry I have the proof – before u call the lawyers in…. U have probably done a runner already..

Talk soon my friend.

Martyn

The LM Emails (#12): LM Was Tooting Its Own Horn Just Days Before It Collapsed

Below is an email that LM sent out to advisers just one week before it went into voluntary administration. It is followed by Martyn Terpilowski’s response.

[Update: Andrew Drummond wrote an interesting piece about the news articles cited in LM’s email. See here: “How the Media Unknowingly Colluded with LM“.]

LM’s Email


From: LM Investment Management Ltd [mailto:mail@LMaustralia.com]
Sent: Tuesday, March 12, 2013 11:40 AM
To: Martyn Terpilowski
Subject: LM in the Media

 www.LMaustralia.com

Financial Adviser/Intermediary Information Only
12 March 2013

Dear Martyn,

LM in the Media


LM maintains domestic and international media support for its 15 year history of providing investors globally access to Australian investment opportunities.

Should you have missed them, we have provided below some recent media highlights across the LM group.  These include:

  • Progress we are making with our closed LM First Mortgage Income Fund and asset sales program;
  • The real Peter Drake;
  • Completed and upcoming global registrations;
  • Imminent product launches; and
  • Significant onsite and behind the scenes works for our A$1bn Maddison Estate, and the continued growth of the LM Managed Performance Fund which now holds more than A$400m funds under management.

Recent media coverage:

Fund investors to receive payments 4 March 2013

“Investors in LM’s First Mortgage Income Fund will this week receive their first capital distribution since the fund was closed due to the global financial crisis, as property assets continue to be sold down.” view entire article

Brighter future as LM shakes off pain 1 March 2013

“LM chief executive Peter Drake likes to think his business concentrates on the “boring bits”.  However, the past few years for the global property and investment manager have been anything but boring, with the company now finding Australia as the buy order for the world.” view entire article

Maddison kicks off civil works stage February 2013

“LM has kicked off civil works at its A$1 billion Maddison Estate at Pimpama, paving the way for a development that will create 3,500 construction jobs for the city.  Civil works comprise 32 hectares of onsite works, external road works and entry into the development which will ultimately house 4,500 residents.” view entire article

Drake steps up to the plate 26 January 2013

“LM’s boss Peter Drake has put hesitation behind him and is convinced to build his profile to better impart positive messages about the business.  As LM expanded its operations further, people would start to realise just how successful the company was.” view entire article

LM boosts global growth 26 January 2013

“LM has announced plans to launch two additional funds and is continuing an aggressive push into new parts of the globe.  It has boosted its reach to more than 73 countries, with the addition of 12 last year.”view entire article

Waterfront milestone; new wave of activity 8 December 2012

“A$75m Gold Coast residential project is now under construction after off the plan sales reached more than A$25m. ‘Edgewater’ has attracted the financial backing from LM.” view entire article

Building begins on A$75m lake estate 1 December 2012

“Work has begun on a A$75 residential project undertaken by Pearls Australasia, with more than A$25m apartment and waterfront home presales confirmed.   LM has approved an A$13.6m facility to fund construction, and says it is a quality asset for the LM Australian Income Fund.” view entire article

To ensure you are updated on LM in the media, please visit the News page on the LM website athttp://www.lmaustralia.com/News.aspx

The Directors
LM Investment Management Ltd

Download a PDF version of this update

The LM products are solely for distribution via financial advisers and intermediaries. LM requests investors consult a financial adviser and read and consider the relevant disclosure document before making any decisions on their investment.  The LM Funds are not bank deposits.  This communication is general information on the LM funds issued by LM Investment Management Ltd.

privacy | contact us

© LM Investment Management Ltd 2011
Responsible Entity & AFSL No. 220281 ABN 68 077 208 461

 

Martyn Terpilowski’s Response

From: Martyn Terpilowski
Sent: 12 March 2013 19:26
To: ‘Martin Venier’
Subject: FW: LM in the Media

Sending out stuff like this is absolutely madness and thoughtless when u owe ppl money as u always tend to do – I just can’t believe I am being sent this rubbish about Peter Drake.. I just want my clients money back…. I do not care about your expansions as being part of that would be rather silly based on the number of times we have been let down. I realise that the old big upfront commissions are still convincing some brokers to invest money with a company with so many problems… the questions would have to be – why else would u choose LM? I mean there are other alternatives so why given the mess ups with the fund, with Trilogy, the negative press and the fact your problems with currency hedging constantly leading to failure to pay back clients… I mean why? Why? Why? It is sheer madness… I just want to hear when my clients will get paid and back.. Not the rest of the nonsense.

Rgds

Martyn