LM expat investors launch lawsuits against FAs and insurers

Published:  1 Sep at 6 PM
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Expatriates who lost millions due to the failure of the massive LM Managed Performance Fund, now declared a Ponzi scheme, are banding together to take legal action against dodgy FAs, pension fund trustees and their associated offshore life insurance firms.

The LM scandal is now regarded as the offshore financial industry’s biggest mis-selling scam in several decades. Overall losses across Asia are estimated in the hundreds of millions, with many smaller investors now bereft of their life savings and pension income.

Recent online revelations by Martyn Terpilowski, a former FA now working with several LM victims’ groups, show that the fund was delaying redemption payouts as long ago as 2009, whilst still taking in vast amounts of cash from new investors. The selling frenzy amongst expat FAs working in Asia continued up until a few days before the administrators were called in, and was supported by the offshore life insurance companies which issued the bonds.

LM action groups are following in the footsteps of Australian investors, some of whom have already won their lawsuits on the basis that the FAs involved gave incorrect advice or ignored their legal responsibility for due diligence in order to gain huge commissions paid by LM.
Asia-based expats face a major challenge, as many FAs were working illegally, had no indemnity insurance or have already fled back to their home countries to avoid local lawsuits.

Investors across the region are complaining that, in spite of FAs knowing exactly what was going on, the so-called low risk LM funds were still touted as suitable for retirees. Platforms offered by UK-based Friends Provident, Skandia, Royal London in addition to Europe-listed Generali and AXA all contained the LM fund right up until it collapsed.

When approached for its comments, Friends Provident denied any responsibility for the debacle, as did other insurers. However, a number of other platform operators including Singaporean iFast Financial had moved to delist the LM fund in 2009, citing ‘alarming red flags’.
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