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Figures show massive scale of LM fund sales by expat FAs
| Published: | 14 Apr at 6 PM |
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Tagged: Australia
A year after the LM Investment Management Fund (LMIM) called in the administrators, figures have revealed the huge scale of sales of its Managed Performance Fund.
Now referred to in the financial press as the latest in a long line of Ponzi schemes, the fund was touted by FAs in many expat destinations for its alleged returns. However, a high proportion of the sales right up to 18 March last year were made by unlicensed FAs with an eye to its generous commissions.
According to the data available, over 80 advisors across a number of expat destinations channeled a total of A$80 million into the fund, with some A$400 million invested at its peak. Now in liquidation, its investors stand little or no chance of ever seeing any returns, and the list of FAs giving their names, addresses and the details of intermediary firms they were agents for is not available to the public.
However, a number of larger firms have admitted their responsibility in distributing the product and have formed the Advisers’ Committee for Investors, aimed at representing investors’ interests in southeast Asia and other countries. In the Middle East, the source of 25 per cent of the investments, a third of firms involved have joined the group, but the remainder are believed to have been unlicensed.
The first warnings about LMIM were given in 2009 after the company shut down its First Mortgage Income Fund and sold assets to repay due credit. Late in 2012, Trilogy took control of the closed fund, but LMIM CEO Peter Drake insisted his company was sound.
A week after the takeover, Drake described LM as a ‘diverse, multi-fund manager with nine Australian funds holding total assets under management of A$3 billion’ Five months later, the company went into administration, and it’s now emerged that Drake was operating a huge Ponzi scheme.
Now referred to in the financial press as the latest in a long line of Ponzi schemes, the fund was touted by FAs in many expat destinations for its alleged returns. However, a high proportion of the sales right up to 18 March last year were made by unlicensed FAs with an eye to its generous commissions.
According to the data available, over 80 advisors across a number of expat destinations channeled a total of A$80 million into the fund, with some A$400 million invested at its peak. Now in liquidation, its investors stand little or no chance of ever seeing any returns, and the list of FAs giving their names, addresses and the details of intermediary firms they were agents for is not available to the public.
However, a number of larger firms have admitted their responsibility in distributing the product and have formed the Advisers’ Committee for Investors, aimed at representing investors’ interests in southeast Asia and other countries. In the Middle East, the source of 25 per cent of the investments, a third of firms involved have joined the group, but the remainder are believed to have been unlicensed.
The first warnings about LMIM were given in 2009 after the company shut down its First Mortgage Income Fund and sold assets to repay due credit. Late in 2012, Trilogy took control of the closed fund, but LMIM CEO Peter Drake insisted his company was sound.
A week after the takeover, Drake described LM as a ‘diverse, multi-fund manager with nine Australian funds holding total assets under management of A$3 billion’ Five months later, the company went into administration, and it’s now emerged that Drake was operating a huge Ponzi scheme.
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