‘Anything will be better than nothing’ – Providence victim
‘ANYTHING will be better than nothing,’ was the reaction of one investor yesterday, to news that they may get some money back following an out-of-court settlement on a long-running legal action over Providence funds.
Teneo, administrators for local Providence investment funds, sued the funds auditors PwC for a sum believed to be around £14m. A settlement was reached shortly before the trial was due to begin.
David Moriarty, a 79-year-old semi-retired builder, and his wife Jill, 75, invested a total of £60,000 in a Providence Investment product that turned out to be a Ponzi scheme, whereby new investments were used to make payments to earlier investors.
Mr Moriarty said the first he had heard of the settlement was by reading yesterday’s Guernsey Press.
‘We knew there was a court case coming up and we were wondering why we hadn’t heard anything,’ he said.
It is unclear how much individual investors will recoup as a result of the settlement, with the total sum being subject to confidentiality and with legal fees being given priority over shareholders.
Mr Moriarty, who still works as a builder with his son, and is currently stripping and re-tiling the roof of a bungalow, said the loss of his and his wife’s money had profoundly affected their life plans.
‘I had to work bloody hard for that money,’ he said. ‘Nobody gave it to us. We manage on our pension now and at least we don’t have a mortgage to worry about but we could be managing a lot better if we had that money back. We can’t really go on a holiday.’
He said if they were to receive a substantial amount back, then they ‘might be tempted by a nice cruise’ but he admitted he was not optimistic about how much they would get, or when.
The couple remain particularly aggrieved that the Guernsey Financial Services Commission did not, in their view, notify the public sufficiently of its investigations into Providence when concerns were first raised.
‘We invested £30,000 and we were happy for the first couple of years when we got a dividend of £800,’ said Mrs Moriarty.
‘So we decided to put in another £30,000 and then we heard nothing. But we found out in the September that the GFSC had been investigating since April, which was before our second investment. That was the worst part about it.’
Mr Moriarty added: ‘If they knew, they should have told us. It was only when the Americans got involved that it all came to light.’
The scam is thought to have defrauded investors of up to £123m., with £37m. invested in the Guernsey funds alone. The FBI described it as ‘a vast and sophisticated fraud scheme’.
The GFSC said yesterday that it was unable to comment.
