LM Investment scandal leaves expats bereft of savings
|Published:||7 Apr at 6 PM|
Become a Local Expert and contribute articles.
Get in touch today!
Following the 2008 financial meltdown, various Ponzi schemes, the dramatic fall in offshore savings rates, the Cyprus savings grab, non-performing insurance-wrapped funds, and the receivership of Queensland's LM Investment Management, expat savers have little choice as to who to trust with their money. The latest crash wasn’t exactly unexpected, with negative comments regarding the firm’s CEO’s activities posted online for at least a year.
Aggressive marketing of the firm’s funds had been taking place in expat locations such as the Middle East, Spain, Singapore, Canada, South Africa, New Zealand and Thailand as well as the UK, spurred on by salesmen hungry for the generous commission paid on closure of an LM deal. Those whose life savings are now trapped in the hands of administrators may take some comfort from the fact that the salesmen will not now receive commissions, but financial regulators have again failed to protect inexperienced investors.
Britain’s FSA is especially guilty, as it approved one LM fund even after a second property-based fund offered by the company was frozen. LM finally crashed into administration following an ACM Four Corners report claiming it breached corporation law, and the firm is now under investigation by Oz’s Securities and Investments Commission.
The firm’s flamboyant CEO Peter Drake is the target of a class action through Piper Alderman which will attempt to claw back investors’ losses in its high-risk First Mortgage Income Fund. Conservative, risk-averse investors have had their units written down and their capital frozen for over four years, and FAs who mis-sold the fund have also been issued with legal proceedings.
Comments » There is 1 comment
We have lost our life savings by investing in this LM Fund. This was after telling our IFA that we wanted a low risk investment. Does anyone have any suggestions on how to proceed? We are school teachers based in Thailand.