An adviser which encouraged investments into the unregulated property scheme Harlequin has been unable to finance the redress it owes to clients for the losses they’ve suffered. As a result, TailorMade Independent was forced into liquidation.
TailorMade Independent
TailorMade Independent (TMI) advised clients to invest in an unregulated and risky scheme. However, they did not disclose the level of commission they received from Harlequin. The Financial Conduct Authority (FCA) found a conflict of interest that resulted in an unfair relationship.
The directors of TailorMade Independent also benefited financially from being the directors and shareholders of TailorMade Alternative Investments (TMAI). TMAI was an unregulated introducer that cold-called people and then referred clients to TMI.
The FCA found that customers were offered “wholly unsuitable advice” to transfer their pension into the Harlequin Properties scheme.
More than 1,600 customers invested over £121m on the advice of TMI. More than half of these customers invested in Harlequin and have been left out of pocket.
Harlequin Properties
Harlequin Properties was an unregulated property scheme. The scheme promised massive returns from a luxury Caribbean resort. With big-name endorsements from property guru Phil Spencer and Liverpool Football Club, investors were drawn in by the legitimate-looking scheme.
However, plans for the resort never came to fruition, leaving many out of pocket. Only 300 of the 6,000 planned properties were actually built.
The scheme saw £400m in investments and has seen no returns for investors.
Unfair relationship
The law states that advisers have a duty to declare any commissions they receive to their clients.
The Supreme Court has ruled that the commissions received by brokers like TMI can be legally classified as a bribe or secret commission.
This is very important for clients of TMI. Now the company has gone bust, clients have a proprietary claim to any assets of TMI. This puts them at the front of the queue when the assets of the company are split between all the creditors.
As a result, clients of TMI have a number of legal routes to seek compensation for their losses.
If you have invested with TMI into Harlequin Properties or any other scheme, get in touch with our team of expert litigators. We can give you the support you need to get the compensation you deserve on a no win, no fee basis.