Ponzi Scheme Managed Account Question - Courtenay House Trading Group
- Thread starter Guacamayo
- Start date
Guaranteed profits become guaranteed losses.
RebeccaT
Recruit
- Messages
- 3
Hi Guys -
I'll happily give you guys all the details as i'm with them also.
Cyber
This covers our network, systems, platforms, data, Internet security and so on. This insurance is for in the event there is a digital issue such as security breach, hacking, software/hardware failure etc that we are covered to replace and repair ASAP so business can be as usual. This does not cover clients. Its to cover our business process and systems so we can continue to trade and make you money. In the event of financial loss to clients during a digital issue - this would activate the Crime Policy as well.
Crime
This covers any crime. If your funds are used in a way not authorised, stolen, misappropriated, if its a Ponzie scheme etc. For all those who wish to know what is covered - it is any Crime as per the legal definition.
This does not cover a stop loss or poor decision by a trader which could result in you losing your risk of 5%/10%/15% etc
Many of you have asked why is the cover only $20million. This is because Lloyds Of London required many changes to be made which took 12 months including our banking limits and changes to the way we process & handle funds.
The most crucial is our banking limits. We can now only release $1million per day(which is why clients are paid on various dates - so we don't reach our limits).
This means for funds to be stolen or misappropriated it can only be drip fed at $1million per day and 20 days of crime is $20million. The underwriters are satisfied that the crime would be noticed within 20days due to all the stop checks, dual signatures, banking manager monitoring etc
We have applied for $40million but have been told its unnecessary and even with $1billion under management that $20million would be enough. As it all comes down to risk of crime then once crime has occurred, how much can occur. No insurance company ever insures more than about $20m-$40m in Australia for this scenario. We are still waiting on feedback for an increase(although it would be deemed unnecessary and also result in a higher insurance fee for clients)
A good way to understand is assume you have a warehouse with $1billion in stock and an alarm system. The insurance company will only insure you for how much they think can be stolen before the police arrives. So although you have $1billion in stock the insurance may only be $500,000 because all that can be stolen is 1-2 truck loads of goods within 30min(by the time police arrive).
Likewise the insurers are confident the crime would be noticed in our firm within 20 days.
Please note all clients are charged insurance as a once off fee each year.
Professional Indemnity
This covers our firm in the case of a client trying to take legal action against us for their losses. It ensures all legal fees are paid and we can hire a PR agent to aid in our reputation should a matter become public.
This is why we make it clear on the risk.
If you lose more than the agreed stop loss due to 'Gapping or Slippage' this is not covered, once again its impossible to insure against market conditions outside of our control. For a definition of Gapping or Slippage please refer to your contract.
Please note the underwriters and insurance companies have advised we can not give out policy wording due to the fact it will act as a blue print for those who request it to figure out a way to commit a crime against our firm which means we would not be covered.
I'll happily give you guys all the details as i'm with them also.
Cyber
This covers our network, systems, platforms, data, Internet security and so on. This insurance is for in the event there is a digital issue such as security breach, hacking, software/hardware failure etc that we are covered to replace and repair ASAP so business can be as usual. This does not cover clients. Its to cover our business process and systems so we can continue to trade and make you money. In the event of financial loss to clients during a digital issue - this would activate the Crime Policy as well.
Crime
This covers any crime. If your funds are used in a way not authorised, stolen, misappropriated, if its a Ponzie scheme etc. For all those who wish to know what is covered - it is any Crime as per the legal definition.
This does not cover a stop loss or poor decision by a trader which could result in you losing your risk of 5%/10%/15% etc
Many of you have asked why is the cover only $20million. This is because Lloyds Of London required many changes to be made which took 12 months including our banking limits and changes to the way we process & handle funds.
The most crucial is our banking limits. We can now only release $1million per day(which is why clients are paid on various dates - so we don't reach our limits).
This means for funds to be stolen or misappropriated it can only be drip fed at $1million per day and 20 days of crime is $20million. The underwriters are satisfied that the crime would be noticed within 20days due to all the stop checks, dual signatures, banking manager monitoring etc
We have applied for $40million but have been told its unnecessary and even with $1billion under management that $20million would be enough. As it all comes down to risk of crime then once crime has occurred, how much can occur. No insurance company ever insures more than about $20m-$40m in Australia for this scenario. We are still waiting on feedback for an increase(although it would be deemed unnecessary and also result in a higher insurance fee for clients)
A good way to understand is assume you have a warehouse with $1billion in stock and an alarm system. The insurance company will only insure you for how much they think can be stolen before the police arrives. So although you have $1billion in stock the insurance may only be $500,000 because all that can be stolen is 1-2 truck loads of goods within 30min(by the time police arrive).
Likewise the insurers are confident the crime would be noticed in our firm within 20 days.
Please note all clients are charged insurance as a once off fee each year.
Professional Indemnity
This covers our firm in the case of a client trying to take legal action against us for their losses. It ensures all legal fees are paid and we can hire a PR agent to aid in our reputation should a matter become public.
This is why we make it clear on the risk.
If you lose more than the agreed stop loss due to 'Gapping or Slippage' this is not covered, once again its impossible to insure against market conditions outside of our control. For a definition of Gapping or Slippage please refer to your contract.
Please note the underwriters and insurance companies have advised we can not give out policy wording due to the fact it will act as a blue print for those who request it to figure out a way to commit a crime against our firm which means we would not be covered.
RebeccaT
Recruit
- Messages
- 3
Here are attached the insurance forms.
I've rang up Dual Australia / Insurance House and they can confirm the insurance is legit.
Dual Australia / Insurance house are a fairly big company, you will need to speak to Ben Glover @ Insurance house to confirm the details.
The only question is are investors 100% safe?
Are there any possible loopholes for them to do a ponzi or does this insurance cover it all?
I've rang up Dual Australia / Insurance House and they can confirm the insurance is legit.
Dual Australia / Insurance house are a fairly big company, you will need to speak to Ben Glover @ Insurance house to confirm the details.
The only question is are investors 100% safe?
Are there any possible loopholes for them to do a ponzi or does this insurance cover it all?
Pharaoh
Brigadier General
- Messages
- 20,308
Before I begin, I would like to state for the record that I am not an insurance expert. If someone who knows a lot more wants to correct me, that's great. If someone wants to out-speculate me, that's fine, as long as anyone else jumping in reveals what is solid fact vs. speculation.
Since Lloyds is specifically mentioned on all 3 certificates, they can certainly be notified and asked if those documents are real. Here's their alert about a fake insurance claim from a binary broker:
https://www.lloyds.com/news-and-insight/consumer-alerts/2015/consumer-alert-regarding-aaoption
Note the email address at the end of the alert. That could be a good place to send an inquiry.
For the Professional Indemnity, it says the policy is "ProRisk Financial Institution Professional Liability Insurance Wording 09/2011", so a copy of the standard wording of that document could provide at least some clues as to what is and is not covered, but it is possible that there may be customization. Consider this wording "This certificate is not a substitute for the Policy and Schedule of Insurance issued to you. The Policy, not this certificate, details your rights and obligations and the extent of your insurance cover." So, you've really got no idea what exactly is and is not covered.
Another thing to consider. The Professional Indemnity insurance expires on December 1st. What happens to your investment if they don't renew it and then do something unprofessional?
Moving on to the Crime Policy, it also appears to expire on December 1st. There's no indication of what crimes are covered and what crimes are excluded. I assume this is primarily if an employee commits a crime, but can't be certain.
And the Cyber-Liability certificate covers 1 million (and expires on Dec. 1st.). So, imagine they've got 20 or 30 million under management and some evil hacker comes in and churns the accounts down to pennies on the dollar. Does this mean the investors would get to divide up $1 million based on their percent of the losses? Looks like a fine concept to make people feel confident, but if I'm understanding it correctly, it's like buying a $25,000 collision policy when you drive a half million dollar sports car.
Does anyone know how much money they have under management? Are there any plans to escalate these policies as the amount under management increases?
Since Lloyds is specifically mentioned on all 3 certificates, they can certainly be notified and asked if those documents are real. Here's their alert about a fake insurance claim from a binary broker:
https://www.lloyds.com/news-and-insight/consumer-alerts/2015/consumer-alert-regarding-aaoption
Note the email address at the end of the alert. That could be a good place to send an inquiry.
For the Professional Indemnity, it says the policy is "ProRisk Financial Institution Professional Liability Insurance Wording 09/2011", so a copy of the standard wording of that document could provide at least some clues as to what is and is not covered, but it is possible that there may be customization. Consider this wording "This certificate is not a substitute for the Policy and Schedule of Insurance issued to you. The Policy, not this certificate, details your rights and obligations and the extent of your insurance cover." So, you've really got no idea what exactly is and is not covered.
Another thing to consider. The Professional Indemnity insurance expires on December 1st. What happens to your investment if they don't renew it and then do something unprofessional?
Moving on to the Crime Policy, it also appears to expire on December 1st. There's no indication of what crimes are covered and what crimes are excluded. I assume this is primarily if an employee commits a crime, but can't be certain.
And the Cyber-Liability certificate covers 1 million (and expires on Dec. 1st.). So, imagine they've got 20 or 30 million under management and some evil hacker comes in and churns the accounts down to pennies on the dollar. Does this mean the investors would get to divide up $1 million based on their percent of the losses? Looks like a fine concept to make people feel confident, but if I'm understanding it correctly, it's like buying a $25,000 collision policy when you drive a half million dollar sports car.
Does anyone know how much money they have under management? Are there any plans to escalate these policies as the amount under management increases?
@Pharaoh i already ask this question a while back and they sent out an email to clients regarding this i will post the response but i don't want to post there banking limits etc public.
Also a quick question to the other people with this company if you don't mind answering,have you ever lost any of your capital that you invested or had an losing month? or taken part in there special invitation offers how are you finding your experience with the company?
Also a quick question to the other people with this company if you don't mind answering,have you ever lost any of your capital that you invested or had an losing month? or taken part in there special invitation offers how are you finding your experience with the company?
Many of you have asked why is the cover only $xmillion. This is because Lloyds Of London required many changes to be made which took 12 months including our banking limits and changes to the way we process & handle funds.
The most crucial is our banking limits. We can now only release $xmillion per day(which is why clients are paid on various dates - so we don't reach our limits).
This means for funds to be stolen or misappropriated it can only be drip fed at $xmillion per day and 20 days of crime is x million. The underwriters are satisfied that the crime would be noticed within 20days due to all the stop checks, dual signatures, banking manager monitoring etc
We have applied for $xmillion but have been told its unnecessary and even with $1billion under management that $xmillion would be enough. As it all comes down to risk of crime then once crime has occurred, how much can occur.
A good way to understand is assume you have a warehouse with $1billion in stock and an alarm system. The insurance company will only insure you for how much they think can be stolen before the police arrives. So although you have $1billion in stock the insurance may only be $500,000 because all that can be stolen is 1-2 truck loads of goods within 30min(by the time police arrive).
Likewise the insurers are confident the crime would be noticed in our firm within 20 days.
The most crucial is our banking limits. We can now only release $xmillion per day(which is why clients are paid on various dates - so we don't reach our limits).
This means for funds to be stolen or misappropriated it can only be drip fed at $xmillion per day and 20 days of crime is x million. The underwriters are satisfied that the crime would be noticed within 20days due to all the stop checks, dual signatures, banking manager monitoring etc
We have applied for $xmillion but have been told its unnecessary and even with $1billion under management that $xmillion would be enough. As it all comes down to risk of crime then once crime has occurred, how much can occur.
A good way to understand is assume you have a warehouse with $1billion in stock and an alarm system. The insurance company will only insure you for how much they think can be stolen before the police arrives. So although you have $1billion in stock the insurance may only be $500,000 because all that can be stolen is 1-2 truck loads of goods within 30min(by the time police arrive).
Likewise the insurers are confident the crime would be noticed in our firm within 20 days.
Pharaoh
Brigadier General
- Messages
- 20,308
Yeah, because serious criminals planning on stealing millions would be too stupid to:
a. Set up a legit company and buy a small policy to get a look at the typical wording from the company.
b. Search court case records for wording of policies which were disputed.
c, Find one employee of the insurance company and or insured company who could be bribed/blackmailed to get a copy for them.
And insurance companies are too stupid to write a policy that could easily be bypassed by a clever criminal with a copy of the policy.
Also - some of the policies cover the conduct of employees including the management - who have copies of the policies. If so, does that mean crimes by those employees would not be covered?
As for those limits, all it would take is several high ranking employees working together to loot the company over the course of several weeks or months. Assuming that any sort of criminal action will be detected in a day or two is a very very poor assumption. Madoff didn't make all the money disappear in a year. PFG Best didn't make all the money disappear in a year.
a. Set up a legit company and buy a small policy to get a look at the typical wording from the company.
b. Search court case records for wording of policies which were disputed.
c, Find one employee of the insurance company and or insured company who could be bribed/blackmailed to get a copy for them.
And insurance companies are too stupid to write a policy that could easily be bypassed by a clever criminal with a copy of the policy.
Also - some of the policies cover the conduct of employees including the management - who have copies of the policies. If so, does that mean crimes by those employees would not be covered?
As for those limits, all it would take is several high ranking employees working together to loot the company over the course of several weeks or months. Assuming that any sort of criminal action will be detected in a day or two is a very very poor assumption. Madoff didn't make all the money disappear in a year. PFG Best didn't make all the money disappear in a year.
Thanks for reply @ pharaoh.
to answer you other questions asked earlier i'm not sure how much money they have under management they won't disclose this information for sure , imho i think atleast 10m+ easy, because one of there products they offer needs 250k minimum investment and they will allow you to put a max of 50k for every 250k you have with them and the return is 7.5% return/month and is apparently very popular so quite alot of people are invested heavily with these guys.
also they made a change recently all new clients have to invest 50k minimum for atleast 12months and the return is only paid annually not monthly you must invest in this before you can access any of there other products, so the people getting the higher rates are deep into it and have 6 figures with the company.
you are given very limited information regarding trading and insurance policies, so in-depth information regarding there operations etc i really can't provide because it's simply not available.
Also found out one of there products paid 3.5% instead of the full 4% last month however they paid the full 7.5% the people that are invested in the higher tier investment product they offer, no idea how it was possible to pay the full 7.5% (the highest tier product they offer with a 250k min investment to even access) but couldn't deliver the full rate of the 4% product for lower tier
i can confirm they do withdrawals and give your capital back when you request it and are paying monthly returns for long period of times 6-12+months, so while alot of things look shady/skeptical about there dealings they are delivering long term what they advertise.
in my opinion the issue with this company lies with that things seem very shady with how things are setup with the operations of the company and lack of information given to clients and anyone looking to invest long-term is worried about the legitimacy of the company and if there capital is safe with the company long-term.
to answer you other questions asked earlier i'm not sure how much money they have under management they won't disclose this information for sure , imho i think atleast 10m+ easy, because one of there products they offer needs 250k minimum investment and they will allow you to put a max of 50k for every 250k you have with them and the return is 7.5% return/month and is apparently very popular so quite alot of people are invested heavily with these guys.
also they made a change recently all new clients have to invest 50k minimum for atleast 12months and the return is only paid annually not monthly you must invest in this before you can access any of there other products, so the people getting the higher rates are deep into it and have 6 figures with the company.
you are given very limited information regarding trading and insurance policies, so in-depth information regarding there operations etc i really can't provide because it's simply not available.
Also found out one of there products paid 3.5% instead of the full 4% last month however they paid the full 7.5% the people that are invested in the higher tier investment product they offer, no idea how it was possible to pay the full 7.5% (the highest tier product they offer with a 250k min investment to even access) but couldn't deliver the full rate of the 4% product for lower tier
i can confirm they do withdrawals and give your capital back when you request it and are paying monthly returns for long period of times 6-12+months, so while alot of things look shady/skeptical about there dealings they are delivering long term what they advertise.
in my opinion the issue with this company lies with that things seem very shady with how things are setup with the operations of the company and lack of information given to clients and anyone looking to invest long-term is worried about the legitimacy of the company and if there capital is safe with the company long-term.
Pharaoh
Brigadier General
- Messages
- 20,308
One additional thought. This claim makes even less sense:
Why would a criminal intend on theft of many millions of dollars care whether the theft falls under an insurance policy or not?
Only someone inside the company (who has access to the policy) who plants to steal, get away with the theft, and keep the company intact (via the insurance) so the employment can continue would have any motive to care whether the crime is covered by insurance or not. Employees can and sometimes do commit insurance fraud. Investors would have no way to steal from the company or to commit insurance fraud, so there is NO EXCUSE for not providing potential investors with a full copy of a policy which is supposed to protect their investment.
Between this BS excuses to hide date of critical importance to potential investors, the minimum investment times, and the report of some percentages ending up being less than promised, I would personally keep my money very very far away from this company.
Why would a criminal intend on theft of many millions of dollars care whether the theft falls under an insurance policy or not?
Only someone inside the company (who has access to the policy) who plants to steal, get away with the theft, and keep the company intact (via the insurance) so the employment can continue would have any motive to care whether the crime is covered by insurance or not. Employees can and sometimes do commit insurance fraud. Investors would have no way to steal from the company or to commit insurance fraud, so there is NO EXCUSE for not providing potential investors with a full copy of a policy which is supposed to protect their investment.
Between this BS excuses to hide date of critical importance to potential investors, the minimum investment times, and the report of some percentages ending up being less than promised, I would personally keep my money very very far away from this company.
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