Guernsey Press

Lumiere Wealth founder accused of costing his clients £2.7m.

A FINANCIAL adviser gave false and misleading statements to 12 clients, resulting in them losing more than £2.7m., a Jersey Royal Court trial has heard, after the collapse of the Guernsey-linked Providence scheme.

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Chris Byrne, who was MD of advisory firm Lumiere Wealth, is accused of getting people to invest in what turned out to be a Ponzi scheme.

Christopher Paul Byrne is accused of inducing ‘ordinary’ and vulnerable islanders who trusted him with their financial affairs into investing in a high-risk fund, described in court as a Ponzi scheme.

One of his alleged victims was a 79-year-old woman who was deemed vulnerable because of her age and the fact she was partially sighted, requiring a magnifying glass to be able to read.

Crown Advocate Simon Thomas said that between them the 12 clients had lost £2,730,000 and he added there was ‘very little chance any of them will see anything back’.

He said that Mr Byrne had failed to tell his clients that the parent company of the fund was a major shareholder in his company and that he would receive remuneration in money and shares for hitting targets on getting people to invest in it.

Mr Byrne, who ran the financial advisory company Lumiere Wealth, denies 21 counts of fraudulent inducement to invest money and failing to comply with a forthwith notice.

On the first day of his trial, the 50-year-old admitted providing false information to the Jersey Financial Services Commission and carrying on unauthorised financial services business.

Opening the prosecution, Advocate Thomas said: ‘This case concerns false and misleading investment advice given to ordinary members of the public in Jersey.’

Advocate Thomas said that ‘many, if not all’ of the investors could be described as unsophisticated and that they had relied on Mr Byrne’s financial advice for many years.

The court heard that Providence was a high-risk fund and its core business was said to be in debt factoring in Brazil.

Advocate Thomas said that Mr Byrne had a conflict of interest, as Providence Investment Funds PCC Ltd, a Guernsey-registered fund, was a major stakeholder in Lumiere Wealth. He said an agreement was drawn up which stated Providence would transfer Lumiere shares to Mr Byrne if he managed to increase the amount within the fund by a certain level by a set date.

He also would be paid £3,000 for every £350,000 the fund increased by a set target.

‘Mr Byrne did not act as an independent financial adviser,’ Advocate Thomas said.

‘He ignored the clear wishes and best interests of his clients because he had a personal stake in Providence.’

Advocate Thomas said it was the opinion of an expert witness that high-risk investments should only account for a small part of an investor’s overall portfolio.

‘It is a feature of this case that many of the investors invested up to 50 per cent and over 50 per cent in some,’ he said.

On the second day of the trial, the woman said that she had had a ‘pleasant relationship’ with Mr Byrne, that he was someone she had viewed as a ‘trusted friend’ and whom she had invited round for dinner.

The woman, who suffers from macular degeneration – a condition that causes severe, irreversible vision loss – claims Mr Byrne had her sign an unsecured personal loan agreement to him for £1m. when she believed she was authorising the money to be transferred into a bond that would provide her with better interest.

Describing the meeting at her home the woman, who requires a magnifying glass to read, said: ‘We talked about the day. We had a glass of wine and suddenly he got up and said: “I’m very late. Look at the time. I have to meet my wife and children. I want some signatures”.

‘And with that he put three white sheets of paper on the coffee table in my study and said: “I will show you where to sign”.

‘There were lines on them and the words date and signature. He said: “Sign here, here and here. He started talking so fast and slick that I just couldn’t keep up with it. I hardly knew what I was doing. He said he could fill the rest in when he got back.

‘The next think I know was there was this ridiculous paper that said I had given him a personal loan.’

The woman also told the court how she and her now deceased husband invested £570,000 and £30,000 respectively into a bond, which Mr Byrne had told them was a good investment.

Commissioner Sir John Saunders was sitting with Jurats Charles Blampied and Robert Christensen.

The trial, which is expected to last six weeks, continues.

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