North Cyprus News | LM Investment Management in Administration
Back in 2009 a lot of questions were being asked on Cyprus44 about north Cyprus based AstuteFMA’s involvement with Peter Drake’s LM Investment Management (LMIM); currently in administration. The failed LMIM was only one of company AstuteFMA dealt with and is mentioned in this document released by them – ‘Astute Angle’.
LM Investment Management were offering unbelievable rates of interest and many of the Cyp44 readers were sceptical about this. In the end a slanging match ensued which ended with the mention of litigation when AstuteFMA were linked with a scam. According to the newspaper article When Drake’s Empire Came Crumbling Down this inadvertently turned out to be true. I must make it clear that because a company, in innocence, advises a particular investment when there is no evidence of misdeed that does not automatically link them with subsequent events, even though this may reflect on the quality of their advice.
Anyway, getting back to LMIM. It seems that the large returns promoted were to come from lending investors money to developers in Australia. Unfortunately, according to the article mentioned above, the company
“…was enticing financial advisers with three years of commissions upfront. If they placed $1 million of their clients’ savings with LM Investment Management funds, they would get $100,000 cash.”
This meant that the first 10% of an investor’s money went to financial advisers, according to the article’s writer.
Another problem was that investors were allegedly being told that the money was invested in Australian property, a good investment if it had been true, however
“…it was never property that his clients were really buying. As the global financial crisis loomed, they were buying loans to property developers – often associates of Drake and even Drake’s own companies… peoples’ savings came in – mostly from financial advisors – and they went out in loans to developers, after the manager LM had taken its clip. And a mighty clip it was too, tens of millions every year in assorted fees, all up.”
Read When Drakes Empire Came Crumbling Down for the full story. The allegations made by The Sydney Morning Herald should make any LMIM investor shake in their boots. Hopefully some of their investment should be returned, remember the company is in administration not bankrupt. Going back to the original Cyp44 discussion which was curtailed because of threats of litigation when the discussion wrongly linked AstuteFMA with another scam, it should have been clear that 19.6% returns on an investment belongs to a category ‘if it smells like a duck, quacks like a duck, looks like a duck, and walks like a duck.’ Of course, I’m being polite here and don’t really mean duck at all.