Tuesday, October 27, 2009

Alleged corruption in the Isle of Man Office of Fair Trading

The following letter speaks for itself:

Open letter to Mr. P. Gelling – Acting Chief Officer of the Isle of Man Office of Fair Trading (OFT)

Copies to: The Chief Officer of the OFT: Mr. N. Black – The Chairmen of the OFT: Mr. W. Henderson The Chief Minister: Mr. A. Brown and other interested parties.

28th October 2009

Dear Mr. Gelling

Open Letter - Corruption in the Isle of Man Office of Fair Trading

The OFT has deprived pensioners of their legal rights by rejecting complaints that the directors of the Premier Low Risk Fund plc (the Fund) dispensed misleading advice in the course of marketing the Fund to the public.

Your office is in receipt of evidence – upheld by a High Court ruling and Financial Services Authority (FSA) adjudications – in support of allegations that the Fund’s directors obtained bank transfers by deception. Yet the OFT continues to reject the pensioner’s complaints.

The ‘ombudsman office’ does not employ an ‘ombudsman’, and on matters concerning the misselling of financial products the office relies on FSA rulings/adjudications as a guiding reference.

To facilitate this process, and as a service to the consumer advice sector, the FSA regularly display their rulings in the ‘Ombudsman News’. A publication which is known to the OFT.

To demonstrate a case against the Fund’s directors – a case which the OFT refuses to address – please find attached extracts from the FSA publication relating to dispensing misleading advice and the unfair imposition of MVAs.

Complaints about the Fund director’s advice include:-

- Advising pensioners that the fund provided capital security and guarantees. Untrue advice
- Advising pensioners that the Fund could provide a regular quarterly income. Untrue advice
- Advising pensioners that the Fund’s investment strategy is low-risk. The FSA and a High Court confirm that the investment strategy is high-risk. Untrue advice
- Failing to advise pensioners that a MVA, without limited in size and duration, may be applied when the pensioners attempt to rescue their savings.
- Enhancing the Fund’s market appeal by disclosing minor ‘exit charges’ in a highly visible, self-explanatory tabulation - and failing to similarly disclose any other charge.

Because passports were required in the application process the directors knew that pensioners were amongst those receiving this misleading advice and this resulted in them being unwittingly deceived into transferring their life savings to a long term, high-risk fund, not capable of providing regular income and liable to an MVA unlimited in amount and duration. All features not fit for pensioners.

Despite this the OFT have used a variety of devices to trick pensioners into believing that the directors conduct was legally acceptable. The OFT’s denials are now exposed and after delaying matters six years the office is now resorting to another tactic by quoting the Financial Services Act 2008 which states:

“The OFT shall decline or cease to act under paragraph 1(3) where it appears to it that the dispute was referred to it under paragraph 1(2) in any case, more than 6 years after that act or omission”.

A statute of limitations cannot apply to the matter of obtaining pensioner’s life savings by deception.

The OFT’s handling of this case is dishonest and apparently a calculated attempt to protect the Fund’s directors.

Someone in your department should summon the courage to report this matter to an authority with the competence to investigate allegations of corruption in the OFT ombudsman’s office.

Quis custodiet ipsos custodes? Who will guard the guards?

Pensioners Campaigning for Truth and Justice
Contact us: e-mail: PSA350@orange.es or telephone (0034) 950 39 20 38

Tuesday, October 20, 2009

A new IoM government 'mindset' offers real hope of a just & honourable settlement of the Kaupthing fiasco

Today Tony Brown, Chief Minister of the Isle of Man, made a statement to Tynwald on the serious situation in which the island finds itself after HM Treasury had reviewed & modified the Revenue Sharing Arrangement between the IoM & the UK. [full statement in pdf file here]

The decision made by HM Treasury was non-negotiable and means that the IoM will lose revenue of £90million next year & £140million in subsequent years. This equates to an annual loss of revenue in the order of a massive 24%.

The Chief Minister says: "there will without doubt need to be a change of mindset politically..", a statement that he repeated at least 3 times in answering subsequent questions from MHK's.

The financial services industry is the lifeblood of the IoM economy. The position that the Isle of Man now finds itself will have a marked affect on the way the world now views the island as an offshore financial services centre. An accelerating loss in confidence which started with the collapse of the Kaupthing bank could see a massive hemorrhage with money flowing out of the island and deposits & investments drying up. Rapid surgery is now needed.

Dare it be hoped then that this "change of mindset" will now include a courageous political decision to bring about a just & honorable settlement of the Kauthing bank fiasco by a government commitment to restore 100% all deposits lost when the bank went bust due to the actions of the directors, supported by the FSC?

Taxpayers need not be called upon to achieve this. The government with its new mindset must have the political courage to secure the money either through the banks or it should go to HM Treasury & obtain a loan, involving thr IMF if necessary. In either case the loan would be repaid progressively from recovery of the assets, estimated to be approx 83% gross. The shortfall could be made up from & commitment on the part of Iceland to honour the parental guarantee given by the Kaupthing parent bank. Properly negotiated, the IoM Treasury could end up quids in on such a settlement.

The Isle of Man government now has an urgent need to shore up confidence in its banks so as to maintain & sustain the financial services industry that makes up 37% of GDP. The benefits of resolving the festering Kaupthing debacle would far outweigh the cost of failing to do so.

It's time to put the Kaupthing debacle to bed so that depositors & the people of the IoM can all sleep better & look forward to a brighter tomorrow.

Sunday, October 18, 2009

Tony Brown, IoM Chief Minister, conceals his contingency plans

Tony Brown, Chief Minister of the isle of Man, stated on Manx Radio [listen to short replay clip here] that a revision of the VAT sharing agreement will have a significant impact on the Isle of Man, but stressed that the government has contingency plans in place should this happen. Why does he keep them secret? Ooops! silly question — the IoM has been shown by research to be only 17% transparent, [pdf file here] so Tony Brown conveniently choses to keep secret those contingency plans.

Following the fallout of the international financial volcanic eruption of 2008, the offshore game play continues with unwary international depositors being the piggy in the middle. The offshore financial centres of the British Crown dependencies are no longer places that expats & others should trust with their life savings. If they are already ‘in’ on the Isle of Man they should get out quick before the illusionary IoM golden cookie crumbles into sand, as this youtube.com video warns view here

32 videos by dispossessed depositors are spreading this message throughout the world: DON'T BANK ON THE ISLE OF MAN as it could seriously damage your wealth, ruin your health, & take away everything for which you have worked. To view what they say see here

Thursday, October 15, 2009

The Isle of Man stands between the devil of its own creation and the deep blue Irish Sea

Allen Bell, Treasury Minister, does well to warn of tough times ahead for the Isle of Man. www.iomtoday.co.im Unfortunately he views it simplistically by saying without explaining that a new world order is determined to stop the drift of money from high to low tax jurisdictions. That situation is a small part of the larger picture which is about why this drift needs to be stopped in the first place.

Following the international financial tsunami of 2008 there is now increasing international pressure on offshore financial centres that operate as secrecy jurisdictions. The Isle of Man has been shown not to be as transparent as it has tried to make out in overtures to the OECD, the World Bank, the IMF, Washington & the Commonwealth. Voices of reason in the international financial arena are calling for morality to become the cornerstone of the way financial systems operate, & places like the IoM, Guernsey & Jersey are now being put under the microscope.

Has anyone in high places on the Isle of Man every used the word 'moral' to describe the way this offshore financial centre operates? It has demonstrated that it seriously lacks any sense of morality or keen sense of justice in its whole approach to the KSFIoM debacle in particular & the way it conducts its banking business in general.

What comes across so strongly is that the IoM government is hell bent on looking after & protecting its own interests, determined - even before the Select Committee inquiring into the reason for the failure of KSFIoM has completed its deliberations - to claim that the collapse of KSFIoM was not on account of any wrongdoing on the part of the directors or the FSC but on the actions of others elsewhere in Whitehall & Iceland.

This extraordinary immoral arrogance tells dispossessed depositors that they can sing for the return of all their money as the Isle of Man has chosen to stick solely to its defective compensation scheme & treat the fiasco as an unfortunate 'one off' that the government now wants to put behind it so as to carry on 'business as usual'. It was not a 'oneoff'; KSFIoM is the third bank to fail, & there is no reason to believe that others could not do likewise. Indeed the Chief of the FSC has said that non-core banks should be allowed to fail.

Business as usual is business that continues to threaten the livelyhood of anyone who puts their life savings in the trust of the Isle of Man, because the island does not have the infrastructure to respect & honour the trust of those who deposit in its banks. It is morally bankrupt because for all its protestations to the contrary its culture is still rooted in banking secrecy by which megga rich individuals & companies can evade their own social responsibilities to pay their fair share of tax in the places where it should be paid.

The IoM is morally bankrupt because it does not agree with the words of the UK Prime Minister when he said: "where there is unfairness we will act." It is morally bankrupt because it sees no reason to vouchsafe deposits in its banks. It is morally bankrupt because it uses high interest rates to suck in gullable people by telling them what the banks want them to know rather than what they should know about the risks to which they are exposed.

It is morally bankrupt because it has banking regulations that provide an outward cloak of responsibility & respectability whilst hiding the inner secrets of how business is done behind tightly closed doors that have locks but no keyholes. It is morally bankrupt because it has church leaders who do not stand up for righteousness in the financial affairs of the island. It is morally bankrupt because it conspires to increase its own wealth with scant regard for the poor of the world who lose out because of the gross injustices in the systems of taxation in the world's wealthiest nations, especially offshore jurisdictions.

Back in the 1980's the people of the Isle of Man rose up in angry protest at the way the island was being taken over by rich immigrants. Those wealthy invaders won the day and now 25 years on there is an acceptance of the island's status as a haven for rich people from the UK who relocate here to enjoy the benefits of living in a low tax regime.

There are clear signs that this is going to have to change, but instead of there being a revolt against the government it is more likely that the government will lead an orchestrated protest against the United Kingdom & the international community in the same way as it has ducked responsibility for the KSFIoM affair by blaming the bank's demise on Whitehall & Iceland.

The Isle of Man now stands between the devil of its own creation & the deep blue Irish Sea in which it will struggle to keep afloat. Tony Brown, Chief Minister, says the government has contingency plans. Now what sort of lifejackets will they be ?

Monday, October 12, 2009

Birds of a feather flock together on the Isle of Man

Research on secrecy jurisdictions [findings here] has shown that the Isle of Man is one of 60 international secrecy jurisdictions with a defined transparency score of only 17%.

Recently the Isle of Man & Oxford University hosted a conference of financial personnel from 24 of the world's smallest nations. The Isle of Man was upholding itself as 'top of the form' hence well qualified to come to the front of the class to lecture & tutor the rest of the boys & girls on good financial governance. Guess what? 11 of these countries were in the list of 60 secrecy jurisdictions, and they made up 48% of the total of 24 attending the conference.

The small nations in the list of secrecy jurisdictions attending were:
Antigua & Barbuda, Barbados, Belize, Cook Islands, Maldives, Marshall Islands, Mauritius, St Kitts and Nevis, St Lucia, St Vincent & Grenadines, & Vanuatu.

Does that not sound rather like chums in the finance business meeting together to share notes on how best to make money out of operating as offshore finance centres? Is it not rather a case of 'birds of a feather flocking together?'

I found no evidence that any of the 24 small nations could hang their heads in shame by matching the record of the IoM's 3 failed banks, & no record that any of them had lost the savings of over 10,000 depositors during the previous 12 months.

John Aspden, Chief of the FSC, said last week that the loss suffered by Kaupthing bank depositors had nothing to do with wrongdoing on the Isle of Man. Who is he kidding? How arrogantly proud he stood to lecture on the jurisprudence of financial regulation on the Isle of Man, whilst thousands of depositors still waited to be paid compensation for his failure to vouchsafe their savings.

John Aspden's days are numbered.

Sunday, October 11, 2009

Gone are the days of trust when an Englisman's word was his bond.

I reproduce hereunder the words of a dispossessed Kaupthing depositor which sums up well the feelings of expats everywhere whose trust in the Isle of Man has been not only betrayed but ridiculed as though that were not a valid basis for putting one's life savings on deposit in a bank on the Isle of Man.

"No matter where you save (not invest) your money, be it offshore in the British Islands, or even in Timbuktu, permission is not given for others to purloin, take, squander or steal your hard-earned money - and that applies whether you are an immigrant or an expat.....

When you have been expatriate for many years and have built a long-term rapport with your bank or building society, it is not felt necessary to continually check up on them, similarly, when that reputable building society [the Derbyshore] tells you that they are moving the business on to another reputable company and they strongly recommend that you give that company [KSFIoM] your continued support, there are many of us from an era when an Englishman's word was true and we would not believe other than things were being said honestly for the benefit of all involved.

That type of thinking seems incredibly naive and foolish now, especially when after 16 years of dedicated saving, my £397,000 has disappeared into another bank in the UK [that went bust] and I will be lucky to see even 1/2 of it back - and then it will be too late.

So you see, there are people out there like us who just moved temporarily overseas because they chased jobs or adventure, that worked hard, but were not that financially astute. Had we been, we'd have probably been a lot more adventurous with our money then just saving it in a boring bank - but we're that sort of people I think: those that don't risk their life-savings in anything dodgy, but really believed that putting it in a bank was the safest thing to do. Now we've been proven to be inadequate fools, and people have taken advantage of our situation of being spread all around the globe with no representation; no vote; and no power to do anything other than appeal through the press.

Doing that of course brings the risk of others having a dig and a bash at us - and maybe we deserve to be labelled as foolish - but we didn't act maliciously towards others, nor take them to task for being inadequate in one part of their lives; we merely expected that those persons charged with looking after the finances of their country was to properly do the job they get so highly paid for and look after the interests of those who are not so clever in this department. They didn't do their job, they let us down and they let their country down, they all turned a blind eye until it was too late, now the unsophisticated expat depositors - working or retired - carry this huge loss."

Saturday, October 10, 2009

Monkey business on the Isle of Man

In a comment in response to a letter in the Manx Herald here   International Publicity Inc said:

Well here's a tale of monkey business that explains how the financial industry conspires to rip off you & me into believing that it is there for us.

Back in 2008 a man named Bond appeared in a jungle village & and announced to the villagers that he would buy monkeys for £10 each.

The villagers rushed into the forest and started catching them. Bond bought thousands at £10 each, but as the supply started to diminish, the villagers stopped their efforts, feeling they had enough lolly. So as an incentive Bond announced that he would now pay £20 per monkey.

This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and the villagers decided they had had enough of this hard work.

But Bond increased the reward to £25 each, so into the depths of the jungle they went until the supply of monkeys became so small that it was an effort find a single monkey, let alone catch it!

So now Bond announced that he would buy monkeys at £50! However, because he had to go to the City on business, he said that his assistant, Stock, would now buy on his behalf.

In the absence of Bond , Stock told the villagers: 'Look at this big cage - full of all the monkeys Bond has collected. I will sell them to you at £35 each, and when Bond returns from the City, you can sell them to him for £50 each.'

The villagers scraped together all their hard-earned, lifetime savings and bought all the monkeys.

They never saw Bond or Stock again - only monkeys everywhere...

The world's jungles are not just on the equator, they are wherever there is an offshore financial centre. They take good care of the megga rich (hiding their wealth in the likes of 'shell' accounts)but treat the rest of us like those villagers in this story.

The Isle of Man is an offshore financial centre that research has shown to be only 17% transparent in the way it does monkey business.

Friday, October 9, 2009

When did a judge ever give a verdict before hearing a case?

John Aspden, Chief of the IoM Financial Supervision Commission, spoke these smug words on Manx Radio yesterday: "lets be realistic the bank did not collapse because of any wrong doing at this end". Predictably he puts all the blame somewhere else other than the Isle of Man.

Mr.Aspden can be likened to a judge who gives a verdict before hearing the evidence in a case, except that judges would not dream of doing what Mr.Aspden does with such alacrity.

The Isle of Man government dared not allow this investigation to be conducted by an independent body because such a body would have wanted to view the facts objectively & openly, and would have reached a decision based on the evidence and not on the need to have a predetermined outcome as a political expedient to save the sinking reputation of the Isle of Man.

The overwhelming evidence about to be put to the Select Committee will make it clear that Mr. Aspden is deluding himself. In the light of that evidence it is going to have to do some clever mental gymnastics to make their findings fit Mr.Aspden's absurd claim.

Thursday, October 8, 2009

Pandora's Box has been well & truly opened on the Isle of Man

Tax Research org.uk has published here a comprehensive piece of research into 60 international financial jurisdictions which exposes them as secret tax havens. The Isle of Man is one of them.

The evidence [pdf file here] shows that: "the Isle of Man is a long way from offering financial transparency. If it is to play a full part in the modern financial community and wishes to impede and deter illicit financial flows, including flows originating from tax evasion, aggressive tax avoidance practices, corrupt practices and criminal activities it should take action on the points noted where it falls short of acceptable international standards"

All the government's propaganda efforts & waste of public money to hoodwink the world into believeing that it is transparent & squeaky clean has come to naught.

Pandora's Box has been well & truly opened on the Isle of Man - & there's more to come. Watch this space. In the meantime don't bank on the Isle of Man to be anything but economical with the truth when it claims that it is not a secrecy jurisdiciton.

Monday, October 5, 2009

When banks are morally bankrupt

In the blog 'Cynical Tendency' there is a post (read here) about how secret jurisdictions may try to use the law to silence those who seek to reveal the truth about the jiggery-pokery that goes on behind closed doors in the financial world.

We speculate like this because we suspect jiggery-pokery is at the heart of financial life in the dark recesses of the financial world, especially the offshore financial centres. From the hidden heart of these places springs forth the love of money that is the root of all evil.

Without whistleblowers the man in the street will never know the truth about what goes on right under his nose. But alas! a potential whistleblower only knows a small part of a large system that thrives & spreads like a pernicious cancer in the financial world.

The dark secrets of offshore financial mechanisms is closely guarded by a select few who ensure that no whistleblower could ever reveal anything of any consequence that would lead to a reform of this morally bankrupt business.

The evidence of corruption now surfacing in Iceland needs an army of forensic accountants to sort it out. Sadly they will only get so far in their investigations because they have no financial 'enigma machine' that will break the code necessary to reveal just how far the tentacles of corrupt practices spread throughout the financial web across the globe.

Only the godfathers of it all could reveal all, but they would have no reward for doing so as they have sold their soul to the devil to gain riches that will buy them anything that they would need - except, of course, a place in heaven.

Offshore financial centres can not survive without money. Starved of money they would not last long. Banks never tell prospective customers what they want to know in order that they are better able to make a judgement as to whether their money would be safe in their hands. Banks only tell potential depositors what the banks want them to know.

Dispossessed depositors of the failed Kaupthing IoM bank have mounted a video campaign on Youtube.com under the title: "DON'T BANK ON THE ISLE OF MAN" as itcould seriously ruin your wealth.

Let's hope that they might succeed at removing the need for any of us to have to speculate further about what evil deeds might be cooked up behind closed doors in a financial world that only cares about your money and not you.

Friday, October 2, 2009

PWC & KPMG under police investigation in Iceland

The Telegraph reports today (here) that Police have raided the offices of KPMG and PricewaterhouseCoopers (PwC) in Reykjavik, seizing documents and computer data as part of an investigation into alleged criminal activity at three collapsed Icelandic banks.

These two companies are employed by the Isle of Man. PWC is involved as liquidator of KSFIoM and KPMG is involved in the management of the Depositors Compensation Scheme. They are 2 of the top 4 international auditing companies & their services do not come cheap as the dispossessed depositors have found out to their cost. To those who are the victims of the failed Kaupthing bank these two companies are despised more than traffic wardens & bent coppers.

Why should this be so? Because as the Chairman of KPMG UK says: "Our vision is simply stated to turn knowledge into value for the benefit of our clients.." It is the depositors who are having to pay the cost.

These companies operate in the world of money like vultures scavanging off the carcass of companies that have gone bust, and they do so at the expense of hapless customers who are owed money but end up being left with the bare bones.

No doubt PWC & KPMG operating on the IoM will cry: "we are squeaky clean." Kaupthing depositors sure hope that they are, though KPMG haven't exactly shown themselves to be competent in the way they have handled the DCS payments.