The Harlequin Property overseas resorts saga has been going on a while… does your story end with a winning claim?
Harlequin Properties was supposed to build over 6000 amazing and profitable hotel and rental properties in stunning Caribbean locations, but despite accepting around £400m from UK investors from sources like SIPP pensions (for which some agents were paid 15% commission, by the way), only around 300 got built.
Now, Harlequin has become an example of what can go wrong with high-risk and unregulated overseas property developments, right from the way it was sold by a network of marketing companies who cold-called their targets, and Independent Financial Advisers who mis-sold it, to where it is today – with the Saint Vincent & The Grenadines section (Harlequin SVG) in insolvency proceedings, and their chairman appearing in court under charges of fraud.
Harlequin Properties first appeared to many investors in calls from unregulated marketing companies or at property investing seminars: cold-calling firms who’d ring up, seemingly “out-of-the-blue”, usually to offer a pension review.
In some cases, high-pressure techniques were used, such as down-playing people’s current pension arrangements, and inflating the security and safety of a Harlequin Properties investment, itself a high-risk and unregulated investment: not under the jurisdiction of the FCA.
The FSCS has paid out over £98m in compensation for Harlequin.
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Several financial advisers and the FSCS have been paying out compensation for having been mis-sold Harlequin Properties investments via SIPPs and SSASs for a few years, with Get Claims Advice often leading the claim on a No Win – No Fee* basis.
Then you may have been mis-sold, and you could be able to make a claim for negligent SIPP advice.
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Putting aside that this investment was often mis-sold be not one but several regulated financial advisers, the investment scheme itself didn’t go well either.
As early as 2013, investors started to get wind that something there were problems at Harlequin properties.
Properties simply weren’t always being built, making it near impossible for the investment money to generate returns for investors.
But what had happened to the Harelquin Properties money?
Fears were compounded when the Serious Fraud Office here in the UK launched an investigation in March 2013.
Whatever happened to the investment, problems started for most investors when they were unsuitably advised to invest their pensions into the high-risk scheme.
If you’re one of them, take a free initial assessment with one of our experienced case handlers to see if you can make a claim.
By now, some Harlequin investors were already reporting an absence of projected returns, and financial journalists began to cover the story, with one Guardian Article explaining that while over 5000 properties had been sold, and over 1,200 homes were due to have started construction, none had in fact got much further than “broken ground”.
In October 2014, Harlequin lost a court case with a group of 33 investors.
The investors, who had paid 30% deposits from hotel rooms sold as “freehold” were told they would receive high-returns, but did not receive their titles over the hotel rooms and were denied the return of their deposits.
Elsewhere, articles began to appear in mainstream news outlets, such as The Independent, which ran the headline “British Couple could lose £50,000 after investing in Harlequin Property“.
The same year, Chairman David Ames’ son – Matthew Ames – was jailed for 3 years for his involvement in £1.6m fraud – an apparent “Ponzi Scheme” linked to Carbon Credits and teak forestry investments following a 2 year investigation.
In July 2016, the Financial Ombudsman Service published a case upheld against AM Wealth Management – a financial adviser firm that advised their client, “Mr G” to invest in Harlequin Properties…
Mr G transferred his pension into a SIPP: Self-Invested Personal Pension in order to invest £48,000 into Harlequin Properties through AM Wealth Management after receiving a cold-call from a marketing firm.
The FOS said that Mr G seemed to have no investment experience, and had “limited capacity for loss” – meaning that he didn’t have the cash to be running the risk of a high-risk and unregulated investment like Harlequin.
As part of the Ombudsman Decision, a value of £1 was accepted for Mr G’s investment, previously purchased at £48,000.
Mr G went on to win a claim against AM Wealth Management.
“Mr Ames described himself as a visionary. In my view, that is not an apt description. I consider that he was more of a Walter Mitty-type figure who, through an uphappy mixture of dishonesty, naivety and incompetence, has caused irreparable loss to thousands of people.”“Mr Ames candidly admitting lying on various occasions during the course of the development of the resort [..] I consider that the Harlequin business model was, at least potentially, dishonest from start to finish.”
October 2016 also saw Harlequin SVG enter into Insolvency Proceedings…
Declared insolvent by Chairman David Ames, court documents in Saint Vincent named around 130 creditors with claims ranging from £24k to £163k. A Mr Glasgow of KPMG took over the insolvency proceedings, and had the assigned task of finding a solution to satisfy creditors’ claims. Failure to find a viable solution may mean that Harlequin SVG enters into formal liquidation, meaning it may be difficult for investors to get their money back through this avenue.
With all hearings and pleas said and done, David Ames is set to return to court for the fraud trial on 7 January 2019.
Click the button below to see an example of a Get Claims Advice claim against a mis-sold Harlequin stuffed SIPPSee example claim
Harlequin was always a high-risk investment and should never have been suggested to many of the people who ended up invested.
Unregulated investments MAY have been considered suitable for people who are earning over £100k per year, or people who have a wealth of knowledge and experience about investing.
If not, the advice may well have been unsuitable, and it could be that a claim is possible.
Being based abroad, Harlequin Properties was NOT regulated by the FCA (Financial Conduct Authority). It means that the FCA wasn’t looking over its shoulder.
Until quite recently, Cash Investors have been unable to make claims via the FSCS, however the FSCS says it will now consider cash claims for people who took negligent financial advice to invest in Harlequin.
They’ve been quite a few Harlequin properties investor forums. A quick search online should bring you a few.