By Bejay Browne.
A recovery action group for investors set up three years ago to help people who have been badly advised by rogue operators in Cyprus, resulting in investment or pension losses, are encouraging more ‘victims’ to come forward for help on a ‘no win, no fee’ basis.
Collectively, investors have lost millions of euros and the aim is to recover losses and obtain justice.
The Cyprus Investors Recovery Action Group, CIRAG, was set up by Derek Towner, a 74-year-old retired British expat, when he discovered that his financial advisor had been falsifying his investment records to cover up his losses in high-risk products.
“In 2013 I was introduced by a friend to an independent financial advisor who came recommended and a few months later after further checks, I started to invest some funds which appeared to be doing well initially,” Towner informed the Paphos Post.
However, in late 2016, he became concerned, investigated and uncovered a scam which resulted in him discovering significant losses to his portfolio.
“The advisor fled Cyprus and his company had its Insurance Companies Control Service (ICCS) license withdrawn and had to cease trading. I subsequently traced many other people who fell victim to the same scam.”
He decided to take action to help others and formed CIRAG which has uncovered over 60 similar victims in Cyprus.
“There are numerous individuals particularly in the British expatriate community in Cyprus who have suffered enormous losses, their life savings and pensions, as a result of negligent financial investment advice, often by unauthorised, uninsured and unqualified ‘financial advisers’,” he said.
Typically, they were offering structured products and unlicensed investment schemes on the pretext these were low risk investments, when in reality these were for professional investors only, and entirely unsuitable for retirement investment with most failing, he added.
Geoffrey Stanway, a semi-retired British solicitor living in Tala also joined forces with the group and provides legal advice. The aim is to help each member recover whatever losses they can via the formal complaints process, he said.
The group assists investors in direct recovery against advisers, pension trustees and bond providers including Ombudsman proceedings around the EU.
“We are now also able to introduce investors to Forsters LLP, a UK Legal 500 Firm, who are to litigate against investment bond providers,” he said.
No win, no fee court proceedings should get underway in spring this year, and litigation against others will follow, he said.
In 2008, Cyprus introduced financial regulation. All existing firms were told in advance of the need to register with official bodies.
From 2008, any company dealing with or advising on investments or pensions in Cyprus required a license from Cyprus Securities and Exchange Commission or Cysec, and anyone operating as financial services agents were required to pass CIF exams, or they were not legally qualified to give financial advice.
In addition, any company dealing with insurance or reinsurance required a license from ICCS.
Registering came with an expense and required passing exams and possessing professional indemnity insurance for negligent advice.
Some companies skirted around this new requirement by wording contracts misleadingly as if they were able to give investment advice.
“They were not stealing clients’ money directly, but stealing commissions paid to them by investment product suppliers by recommending high risk funds to consumers seeking low risk investments,” Towner explained.
The high risk funds paid undisclosed illegal commissions,12 per cent on some products.
Towner said there are many excellent investment advisors and companies operating lawfully in Cyprus, but going after the crooked one has now become a crusade.
The group’s main priority is to pursue the financial recovery from the large investment companies in Ireland, Isle of Man, Malta and the Czech Republic, and all other individuals and entities involved in Cyprus.
Cyprus Investors Recovery Action Group on Facebook or email: derekincyprus@gmail.com or gstanway@aol.com
