Dolphin Trust collapse - Wealth Options broker

Watching the Prime Time programme and there really needs to be education of the relationship between risk and return. That investor spoke about the bank offering 1% and the loan note offering 13% and he never thought it was high risk. I supposed his "advisor" was too busy calculating what 8% commission was in euro in his head to remember to explain it to him.

You can't have one without the money. Cash is low risk because you know what you get back at the end and it doesn't go up and down in value during the period you hold it. Something that is paying 13% has to be high risk as that is what is being offered for you to move out of cash. The higher the expected return, the higher the chances of you losing money.

Also, a guarantee is only as good as the person underwriting it. A bankrupt company isn't going to honour a guarantee.


Steven
www.bluewaterfp.ie
 
The route here is for a group of the investors to get together and discuss it themselves.

To investigate the FSPO route.

If that is not going to succeed , to investigate the legal route.

They must understand upfront the huge exposure to legal costs and the low chances of success.

Brendan
 
Sophia808 said:
Any victims reading this here really ought to put their file in chronological order, copy all paperwork and go see Colemans, this is likely to evolve into the mother of all financial litigation.
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Been there, done that! To their credit, Colemans sent me a document outlining the upfront and potential future costs and fees involved in taking a case, and this scared me away. I can't afford the risk.

As Brendan wrote above: .... potential litigants must understand upfront the huge exposure to legal costs and the low chances of success.
 
Extract from this week's update from the (UK based) German Property Group Creditors Association


"The end of another busy week for the Committee. We have worked hard to raise the profile of the GPG case and, hopefully, raise awareness in the corridors of power that could alleviate our suffering. There has been a German TV programme and several press articles released which are raising questions of the German authorities, particularly the Prosecutor's office in Hanover a, BaFin ( their equivalent of the FCA) and the Bundestag.

We have also increased awareness over in Ireland by taking part in Primetime on RTE ( a Panorama type programme on their equivalent of BBC 1) and questions have been raised in the Irish parliament today. We continue to liaise with investor groups in France and Ireland.

You may have read that the [UK] Government are now going to compensate LCF clients that purchased bonds. Like loan notes, bonds were previously an unregulated investment product and fell outside of the frameworks. We will of course follow this with interest and continue to raise awareness to the plight of Dolphin investors.

I have had a response to my letter to the Treasury Committee and am hopeful that UK politicians will scrutinise the FCA and call on the Serious Fraud Office to conduct a thorough investigation here. I will be continuing to push for this through the MP Campaign."
 
The GORG report on the liquidation of DC80 the German SPV that was the banking centre is revealing. There were no Accounts, internally so impossible to link creditors to assets. This means specific claims to charges will be impossible because the cash never got there and the German aggregation rules when liquidation meets chaos like this.

It is only a question of time before regulators act because they cannot risk another Custom House Capital debacle, also involving German property. Any action will change the mood around Dolphin.

It is too simplistic to boil this down to buyer beware, the investors never stood a chance, not when they completed low risk tolerance in profiles at the front end, when advice is by regulated companies, money flowed into regulated products and there was no requirement to sign plain English declarations knowing all this stuff.
 
Sophia808 said:
The GORG report on the liquidation of DC80 the German SPV that was the banking centre is revealing. There were no Accounts, internally so impossible to link creditors to assets. This means specific claims to charges will be impossible because the cash never got there and the German aggregation rules when liquidation meets chaos like this.

It is only a question of time before regulators act because they cannot risk another Custom House Capital debacle, also involving German property. Any action will change the mood around Dolphin.

It is too simplistic to boil this down to buyer beware, the investors never stood a chance, not when they completed low risk tolerance in profiles at the front end, when advice is by regulated companies, money flowed into regulated products and there was no requirement to sign plain English declarations knowing all this stuff.
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classic example of profit before prudence

I wonder if this will force the CBI to take another look at commissions on investment products
 
ATM the CB will do no such thing because loan note market is unregulated, it is in its bunker and shows no appetite to leave it, including to liaise with other State agencies
 
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