Article in The Star: "Shake-up at Gibraltar BSN"
Some snippets (emphasis mine):
A management shake-up has occurred at Gibraltar BSN Life Bhd following alleged multi-million insurance investment fraud cases at the life insurance company.
Dubbed collectively as “the biggest insurance scam in Sarawak” by media in Sabah and Sarawak, the cases, which came to light late last year, allegedly involved Gibraltar BSN agents collecting insurance premiums amounting to millions from over 150 customers for policies that did not actually exist.
According to reports, the customers, mostly from Sibu, Sarawak, were enticed by “returns offered of between 8% and 14% per annum”.
In some cases, there were also allegations of misappropriation of client payments.
It is understood that the insurance agents involved are no longer with the company.
Gibraltar BSN is a joint venture (JV) between the American-based Prudential Financial, Inc (PFI) and Bank Simpanan Nasional (BSN), a statutory body under the Finance Ministry.
PFI has a 70% stake in the JV, with BSN holding the remaining 30% interest.
Gibraltar BSN did not respond to StarBizWeek queries on whether it had or is being investigated by the authorities and whether there had been any action taken against it so far but said that there has been a change in top management of the company in recent months.
This sounds pretty serious, hopefully the enforcement agencies will quickly take appropriate action.
Showing posts with label Scam. Show all posts
Showing posts with label Scam. Show all posts
Saturday, 3 December 2016
Friday, 21 August 2015
Asian investors in VGMC conned for RM 7 Billion (2)
I wrote about this issue before.
Richard Smith has written more articles about this issue, and also about "Power 8" , which he describes as: "Power 8’s a pyramid fraud, not a Ponzi". There seems to be links to VGMC, and both Malaysia and Singapore are mentioned:
"Somewhere out there, there’s an additional $240Mn+ of stray Power 8 investor funds, too: by January 2015 the very same big Far Eastern investors who had trooped out to Power 8’s Spanish offices were complaining that they couldn’t get at their invested funds any more, and the fund-raising leg of the pyramid fraud had run its course."
Richard Smith has written more articles about this issue, and also about "Power 8" , which he describes as: "Power 8’s a pyramid fraud, not a Ponzi". There seems to be links to VGMC, and both Malaysia and Singapore are mentioned:
"Somewhere out there, there’s an additional $240Mn+ of stray Power 8 investor funds, too: by January 2015 the very same big Far Eastern investors who had trooped out to Power 8’s Spanish offices were complaining that they couldn’t get at their invested funds any more, and the fund-raising leg of the pyramid fraud had run its course."
Saturday, 14 February 2015
Asian investors in VGMC conned for RM 7 Billion
A long series of articles on Naked Capitalism's website about Virgin Gold Mining Corporation and the aftermath:
Some snippets:
Virgin Gold Mining Corporation (VGMC) is a big international gold-themed pyramid fraud. If you are unfamiliar with the term, many (including me) often call these things Ponzis, though in truth Ponzis are slightly different in structure, and tend to be more durable.
The whisper number around the VGMC fraud is $2Bn, and, though there could easily be a hefty dose of hype in there, it is easy to construct a plausible tally of thousands of bilked investors, with losses ranging from tens of thousands into the millions.
Virgin Gold is undertaking an exercise of issuing fresh Convertible Preferred Stocks (CPS) and invites willing investors worldwide to take up this offer.
The offer price starts at $0.80/share on 1 January, 2010.
By the end of 2012 or mid 2013, VGMC has a very impressive geographical footprint, on Facebook pages, blogs, and bulletin boards: Egypt, Dubai, Singapore, Brunei, Indonesia, Malaysia, Thailand, the Philippines, Japan, and both Hong Kong and mainland China. Judging by this ASIC warning, it’s put in an appearance in Australia too, and there are even training sessions for promoters, run by some idiot from southern Africa, at the Ritz in London.
With (purportedly and plausibly) thousands of investors across the Middle East and Asia, and a very high, very lively social media profile, it’s pretty clear that cooling the marks out is going to take a lot more planning and organisation than usual.
By the end of 2012 or mid 2013, VGMC has a very impressive geographical footprint, on Facebook pages, blogs, and bulletin boards: Egypt, Dubai, Singapore, Brunei, Indonesia, Malaysia, Thailand, the Philippines, Japan, and both Hong Kong and mainland China. Judging by this ASIC warning, it’s put in an appearance in Australia too, and there are even training sessions for promoters, run by some idiot from southern Africa, at the Ritz in London.
With (purportedly and plausibly) thousands of investors across the Middle East and Asia, and a very high, very lively social media profile, it’s pretty clear that cooling the marks out is going to take a lot more planning and organisation than usual.
Malaysia is featured (unfortunately) several times in the above articles, and not only as investors. The authorities might want to have a look at the details.
Some good news, both the Securities Commission and the Monetary Authority Singapore put VGMC on their alert list (SC alert, MAS alert), the SC already in 2010 (MAS doesn't put a timeline). In other words, investors have been warned, the list of unauthorised websites / investment products / companies / individuals is the most visited page on SC's website.
Why do so many investors fall for these schemes in Malaysia and Singapore? I don't know, but may be making "Hustle" (one of my favourite series) part of the school curriculum will help.
The introduction in the first article above is straight from the lessons to be learned from Hustle (and many other devious schemes as well):
The mark is permitted to win some money and then persuaded to invest more. There is an “accident” or “mistake,” and the mark loses his total investment. The operators then depart in a ceremony that is called the blow off or sting. They leave the mark but take his money. The mark is expected to go on his way, a little wiser and a lot poorer.
Some snippets:
Virgin Gold Mining Corporation (VGMC) is a big international gold-themed pyramid fraud. If you are unfamiliar with the term, many (including me) often call these things Ponzis, though in truth Ponzis are slightly different in structure, and tend to be more durable.
The whisper number around the VGMC fraud is $2Bn, and, though there could easily be a hefty dose of hype in there, it is easy to construct a plausible tally of thousands of bilked investors, with losses ranging from tens of thousands into the millions.
Virgin Gold is undertaking an exercise of issuing fresh Convertible Preferred Stocks (CPS) and invites willing investors worldwide to take up this offer.
The offer price starts at $0.80/share on 1 January, 2010.
By the end of 2012 or mid 2013, VGMC has a very impressive geographical footprint, on Facebook pages, blogs, and bulletin boards: Egypt, Dubai, Singapore, Brunei, Indonesia, Malaysia, Thailand, the Philippines, Japan, and both Hong Kong and mainland China. Judging by this ASIC warning, it’s put in an appearance in Australia too, and there are even training sessions for promoters, run by some idiot from southern Africa, at the Ritz in London.
With (purportedly and plausibly) thousands of investors across the Middle East and Asia, and a very high, very lively social media profile, it’s pretty clear that cooling the marks out is going to take a lot more planning and organisation than usual.
By the end of 2012 or mid 2013, VGMC has a very impressive geographical footprint, on Facebook pages, blogs, and bulletin boards: Egypt, Dubai, Singapore, Brunei, Indonesia, Malaysia, Thailand, the Philippines, Japan, and both Hong Kong and mainland China. Judging by this ASIC warning, it’s put in an appearance in Australia too, and there are even training sessions for promoters, run by some idiot from southern Africa, at the Ritz in London.
With (purportedly and plausibly) thousands of investors across the Middle East and Asia, and a very high, very lively social media profile, it’s pretty clear that cooling the marks out is going to take a lot more planning and organisation than usual.
Malaysia is featured (unfortunately) several times in the above articles, and not only as investors. The authorities might want to have a look at the details.
Some good news, both the Securities Commission and the Monetary Authority Singapore put VGMC on their alert list (SC alert, MAS alert), the SC already in 2010 (MAS doesn't put a timeline). In other words, investors have been warned, the list of unauthorised websites / investment products / companies / individuals is the most visited page on SC's website.
Why do so many investors fall for these schemes in Malaysia and Singapore? I don't know, but may be making "Hustle" (one of my favourite series) part of the school curriculum will help.
The introduction in the first article above is straight from the lessons to be learned from Hustle (and many other devious schemes as well):
The mark is permitted to win some money and then persuaded to invest more. There is an “accident” or “mistake,” and the mark loses his total investment. The operators then depart in a ceremony that is called the blow off or sting. They leave the mark but take his money. The mark is expected to go on his way, a little wiser and a lot poorer.
Tuesday, 21 January 2014
Australia's biggest pension scam
An article in The Global Mail by Mike Bowers:
"Inside the Offshore Fraud: The Villains and Victims of Australia’s Biggest Pension Scam"
The timeline gives a clear picture what happened:
Investors are protected by 5 parties:
Yet in this case, involving the Astarra Strategic Fund managed by Trio Capital, all were sleeping on the job:
One of my favourite bloggers, John Hempton from Bronte Capital was the whistle-blower in this case, acting on a tip off, the story "A dark privatised social security story: Astarra, the missing money and how examining a fund manager owned by Joe Biden’s family led to substantial regulatory action in Australia" (which is a beautiful read) can be found here.
Remarkably how fast Hempton found out that the persons behind the hedge fund had a rather patchy background, a clear red flag. And yes, Joe Biden is the US Vice President.
Another informative article written by Dominic McCormick, Hempton's tipper, can be found here.
Luckily the authorities acted fast, as can be seen from the above timeline, in a few months all related funds were suspended and only two years later one manager was jailed and many other were punished to a lesser degree. Lots of stories have been written about the case, informing the public. Unfortunately, the alleged mastermind behind it all probably goes scot-free.
What can be learned from this case?
In Malaysia several similar cases have occurred, Genevva gold trading scheme was one, SJ Asset Management another. Both cases have dragged on for years, not much information is forthcoming. I hope one day we will get as much clarity about these (and other) cases as in the above Australian scam. Their investors and the public at large deserve it, as do the alleged perpetrators.
"Inside the Offshore Fraud: The Villains and Victims of Australia’s Biggest Pension Scam"
The timeline gives a clear picture what happened:
Investors are protected by 5 parties:
- The trustee, who keeps all assets in trust
- The fund manager, who manages the assets in the best interest of the investors by giving instructions to the trustee, without being allowed to "touch" the assets
- The financial advisor, who is responsible to give good investment advice to his clients
- Auditors, both internal and external, checking the books
- The securities regulator who is responsible for licensing etc.
Yet in this case, involving the Astarra Strategic Fund managed by Trio Capital, all were sleeping on the job:
- The fund manager and the trustee were connected;
- The financial advisors received huge incentives to recommend this fund: "Retail investors could invest in the Strategic Fund with as little as $1000, and were often advised to do so by financial planners, who received an up-front commission of up to 4 per cent.";
- Auditors KPMG (internal) and WHK (extrernal) are reputed companies, yet didn't see the danger; unfortunately, having one of the "Big Four" accounting firms is not exactly a guarantee against fraud or scams, as many cases have shown in the past;
- Trio Capital, who ran the Astarra Strategic Fund was licensed by Australian financial-regulation authorities
One of my favourite bloggers, John Hempton from Bronte Capital was the whistle-blower in this case, acting on a tip off, the story "A dark privatised social security story: Astarra, the missing money and how examining a fund manager owned by Joe Biden’s family led to substantial regulatory action in Australia" (which is a beautiful read) can be found here.
Remarkably how fast Hempton found out that the persons behind the hedge fund had a rather patchy background, a clear red flag. And yes, Joe Biden is the US Vice President.
Another informative article written by Dominic McCormick, Hempton's tipper, can be found here.
Luckily the authorities acted fast, as can be seen from the above timeline, in a few months all related funds were suspended and only two years later one manager was jailed and many other were punished to a lesser degree. Lots of stories have been written about the case, informing the public. Unfortunately, the alleged mastermind behind it all probably goes scot-free.
What can be learned from this case?
- Investors should be aware that fund managers don't handle money themselves, they should be separated from the trustees;
- Investors should be informed about fees, high fees are a red flag since the advisors have a clear incentive to recommend the investment;
- Don't put all your eggs in one basket, please read the story about John Telford;
- Even having several reputable companies or authorities overseeing an investment vehicle is not a guarantee that nothing fishy is going on;
- Whistle-blowers form an important part in the eco-system, if the authorities had not acted so quickly, much more damage would have been done.
In Malaysia several similar cases have occurred, Genevva gold trading scheme was one, SJ Asset Management another. Both cases have dragged on for years, not much information is forthcoming. I hope one day we will get as much clarity about these (and other) cases as in the above Australian scam. Their investors and the public at large deserve it, as do the alleged perpetrators.
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