Submitted by St. Georges Dragon
Interesting news about Harlequin. The Financial Services Authority (FSA) in the UK, which regulates the financial services industry, has published an alert: Information on investments made through Harlequin Management Services.
Issued on Friday 18th January, it puts financial advisers on notice that if they recommend an investment in a pension for which the underlying assets are Harlequin overseas properties, the advisor must carry out a thorough due diligence on the various developments being sold by Harlequin Property to fully satisfy themselves that it is a suitable investment. The due diligence should involve:
consideration of how building work is progressing on the various sites and any factors involved in reported delays to completion;
establishing precisely how their customers’ funds will be used during the construction phase and the terms of their purchase agreements;
a full assessment of all publicly available information about the overseas property investments through Harlequin Property and on all the parties associated with these investments
The FSA does not regulate Harlequin, so it is quite surprising that it mentions Harlequin by name. Interestingly, the same day, the FSA released a second alert: Advising on pension transfers with a view to investing pension monies into unregulated products through a SIPP. This sets out further advice on what advisors need to do when recommending investments in third-party companies based on overseas property development.
Effectively, the two alerts have to be read together to see the FSA’s concerns about Harlequin. Also, it is interesting to see that the FSA is investigating a number of advisors; has stopped them giving such advice and is looking at taking enforcement action against them. At last, someone in the UK is taking action to stop innocent people losing their pensions and savings.
With Harlequin’s ability to access further Ponzi funding starting to be closed off by the regulators, is this the beginning of the end for them?