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David MarchantEditor at OffshoreAlert
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Investment Schemes + Conflicts of Interest = Loss of Capital

November 08, 2016 by David Marchant
One of the quickest ways of detecting whether an investment opportunity is legitimate is to skip to the 'conflicts of interest' page of an offering memorandum. If it's not blank, don't invest.

Conflicts are a clear sign that a scheme exists not to achieve returns for investors but for insiders to strip out their cash in fees before it inevitably collapses.

Examples abound, most recently with Timothy Schools' Axiom Legal Financing Fund, in the Cayman Islands; David Cosgrove's Belvedere Management Group, in Mauritius; and Providence Financial Group, in Guernsey.

Most significantly, the supposedly independent administrators helped to sell and promote the funds whose Net Asset Values they were responsible for calculating. No surprise then that, in each case, the NAVs were artificially inflated. The administrators were incentivized to do so.

So investors, never forget this equation: Investment Schemes + Conflicts of Interest = Loss of Capital (100% of the time).

Accept the above as fact and the one minute you've spent reading it will be among the best investments (of time) you've ever made.

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We hunt for red flags in high-value, cross-border finance by monitoring offshore and onshore courts, regulatory actions, offering documents, and other sources - and email you the results.

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