Another IOM Investment fund bites the dust

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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Posted: Sat, 19/11/2011 - 13:19

At least this one was spotted by the FSC - but all seems very discrete:
http://www.gov.im/lib/news/fsc/foundationsprogr1.xml

Foundations Program Plc

On 23 December 2010 the Isle of Man Financial Supervision Commission (FSC) issued a Public Notice about a direction issued to the Board of Directors of the Foundations Programme Plc. The direction required the suspension of trading in shares of Foundation Programme Plc until the fund was in compliance with its regulatory obligations.

This Public Notice is intended to draw forthcoming court actions to the notice of investors in the fund and other interested parties. In particular there will be hearings for winding up of the Foundations Programme PLC (claim no CHP 11/0097) and FPA Limited (claim no CHP 11/0098) at the High Court of Justice of the Isle of Man Chancery Division at 10:00 am and 10:30 am respectively on 23 November 2011 (click here for the text of notices about the hearings which were published in the Isle of Man Examiner on 8 November 2011). Any person who wishes to appear on the hearings must serve notice on or post written notice to Mr Mark Holligan of Gough Advocates. All such notices must be with Mr Holligan by no later than 6-00pm on 22 November 2011.

The FSC issued the petitions to wind up these companies in the interests of investors.

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Foundations Program plc & FPA Ltd in liquidation

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Thu, 11/10/2012 - 10:03

A belated update for anyone unfortunate enough to be involved, these companies are now in liquidation:
http://www.gov.im/lib/news/fsc/foundationsprogr2.xml

"Foundations Program Plc

Following the petition by the FSC to wind up Foundations Program PLC and FPA Limited (“the Companies”), the High Court of Justice in the Isle of Man has made a Winding –up Order against the Companies on 23 November 2011.

Michael Fayle of KPMG LLC, Heritage Court, 41 Athol Street, Douglas Isle of Man IM99 1HN and Andrew Paul Shimmin of Shimmin Wilson, 13-15 Hope Street, Douglas, Isle of Man IM1 1AQ were appointed Joint Deemed Official Receivers and Joint Provisional Liquidators of both Companies.

A “Notice to Participants” has been issued by the Joint Liquidators and this can be accessed via the following website - http://foundations.kpmg.co.im *.

It is the intention of the Provisional Liquidators to keep participants informed of the progress of the winding-up and they anticipate updating this website, when there is anything meaningful and significant to report."

The latest (August 2012) update by the Liquidators is here:
http://foundations.kpmg.co.im/update20120815.htm


FPA and fraudulent offerings: action brought in USA

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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  • Thu, 11/10/2012 - 14:50

"UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION


:
UNITED STATES SECURITIES : CIVIL ACTION
AND EXCHANGE COMMISSION, : FILE NO.
:
Plaintiff, :
:
v. :
:
STEVEN BREWER, :
ADAM ERICKSON, :
BREWER INVESTMENT GROUP, LLC, :
BREWER FINANCIAL SERVICES, LLC, and :
BREWER INVESTMENT ADVISORS, LLC :
:
Defendants, : :
COMPLAINT
Plaintiff, United States Securities and Exchange Commission, alleges as follows:
SUMMARY
1.
This enforcement action involves fraudulent offerings of unregistered securities. From June 2009 through at least the end of September 2010, Defendants Steven Brewer (“Brewer”), Adam Erickson (“Erickson”), Brewer Investment Group, LLC (“BIG), Brewer Financial Services, LLC (“BFS”), a registered broker-dealer, and Brewer Investment Advisors, LLC (“BIA”), a registered investment adviser, participated in fraudulent, unregistered offerings of promissory notes issued by FPA Limited (“FPA”), an Isle of Man company, in the aggregate amount of $5.6 million to at least 74 investors. Through the fraudulent offerings, BIG and Brewer funneled cash to BIG and one of its subsidiaries when the entities were under significant financial distress. The offering materials that Defendants created and used for the offerings of FPA promissorynotes (“FPA Notes”) failed to disclose that over 90% of the proceeds would be disbursed at Brewer’s direction to BIG and then to its wholly-owned subsidiaries. In addition, The offering materials misrepresented the risk of the investment and failed to disclose the precarious financial condition of BIG and its subsidiaries. ...."

Full details here: http://www.sec.gov/litigation/complaints/2010/comp21715.pdf


Very hush hush indeed. Every

  • tonycBrisbaneOz
  • 12/10/08 31/05/13
  • a depositor
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  • Sun, 20/11/2011 - 12:39

Very hush hush indeed. Every page on the Foundations Capital website (the promoters) is password protected.

http://www.foundationscapital.com/

'Foundations Program PLC is established in the Isle of Man and constitutes an "experienced investor fund" for the purposes of the laws of the Isle of Man relating to collective investment schemes.'

More details here though

http://www.investoffshoredirect.com/Default/Foundations_Capital

Regards, TonyC


Isle of Man “collective

  • Premier Shareho...
  • 21/11/11 31/05/09
  • not prepared to answer
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  • Tue, 22/11/2011 - 12:54

Isle of Man “collective investment schemes” were often designated as unregulated funds for “experienced investors” only. This did not prevent the directors of the Premier Low Risk Fund plc receiving bank transfers from hundreds of inexperienced pensioners by means of misleading claims and by concealing a punitive exit penalty unlimited in both amount and duration.

Curiously the Isle of Man Financial Supervision Commission (FSC) has recently elected to suspend trading in shares of the Isle of Man based collective investment scheme trading as “Foundations Program plc” (FPP) until the fund is in compliance with its regulatory obligations, prior to hearings for winding up the company.

The FPP (like the Premier Fund) “borrowed” money/ life insurance policies to speculate in volatile assets. This was described as having a “reasonable level of risk” – but fails to define “reasonable” relative to “low” and like Premier lost a considerable amount of “investors” money.

At least the FPP did not claim to offer "Capital Security and Gurantees" - and neither did it hide a punitive exit penalty.

Thankfully for the world since November 2007 it has not been permissible to establish new “experienced investor funds” on the island.

Never, ever bank or invest a single cent on the Isle of Man.


Isle of Man or Guernsey?

  • MarkA
  • 20/11/08 31/05/09
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  • Sun, 20/11/2011 - 18:34

Strange... although the disclaimer in www.foundationscapital.com website says that "Foundations Program PLC is established in the Isle of Man and constitutes an "experienced investor fund" for the purposes of the laws of the Isle of Man relating to collective investment schemes" the contact address is in Guernsey:

Foundations Program plc
c/o The Elms
St Julian's Avenue
St Peter Port
Guernsey
GY1 1ZE

http://www.foundationscapital.com/contact

But here's the killer:

"The Fund is not subject to the approval in the Isle of Man and investors are not subject to any statutory compensation arrangements in the event of the Fund's failure."


Those who “invest” in

  • Premier Shareho...
  • 21/11/11 31/05/09
  • not prepared to answer
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  • Tue, 22/11/2011 - 12:46

Those who “invest” in “experienced investor funds” are expected to have the acumen and ability to understand the minutiae of a fund designed for professional investors ONLY without requiring additional advice …

So how come the Isle of Man based Premier Fund was sold as a RETAIL PRODUCT to hundreds of inexperienced pensioners? And why were the pensioners tricked into assessing their “experience” as sufficient to "invest" in a “fund” advertised by the directors as offering “Capital Security and Guarantees” and a risk rating associated with a building society?

Because Isle of Man "experienced investor funds” are not subject to the approval by the Isle of Man government and regulatory authorities (or any other "authority" in the world) anything goes. ...

Victims of the KSFIoM debacle will be only too familiar with the meaning "guarantee" as defined in the Isle of Man dictionary. Other words which the this dictionary has also corrupted into having entirely different meanings include “security” and “professional”.