Jersey, Guernsey and US regulators target Providence Global

Added 16th September 2016

The Jersey Financial Services Commission (JFSC) is working closely with its Guernsey counterpart and in parallel with US regulators against wound-up financial services firm Providence Global.

Jersey, Guernsey and US regulators target Providence Global

The JFSC said in a statement on Thursday that it supported the actions taken by the Guernsey Financial Services Commission (GFSC), “particularly the appointment of administration managers to [Providence Investment Funds], which may assist in any recovery of investor monies”.

Guernsey action

The Royal Court of Guernsey ordered the winding up of Providence Global in August, having appointed administrators to its subsidiaries Providence Investment Funds (PIF) and Providence Investment Management International earlier the same month.

The wind up application was brought by the GFSC after all of the directors of both companies resigned on 4 and 5 August, having informed investors that the fund had been suspended on 29 July.

Jersey response

Jersey’s regulator launched its own investigation into the sale of PIF to clients of Jersey-based IFA firm Lumiere Wealth, which is majority owned by Providence Global.

JFSC’s said: “Lumiere Wealth Limited was licensed by the JFSC on the 16 April 2015 as a Class D Investment Business (which allows an entity to advise on investments but not hold client assets).

“Investors in Jersey invested in PIF. The JFSC has been working closely with the GFSC on this case given the exposure of Jersey investors. The JFSC is investigating the advice provided by Lumiere Wealth Limited to its clients in respect of PIF.”

US investigation

JFSC’s statement also referenced action being taken by the US Securities and Exchange Commission against Providence Financial Investments and Providence Fixed Income Funds, including Providence Group founder Antonio Buzaneli.

“On 26 August 2016, judge Susan Richard Nelson of the District of Minnesota issued an order requiring Anthony Buzaneli to surrender his passports and prohibiting him from leaving the United States until further order of the court.

"The order also freezes his assets, requires Buzaneli to provide an accounting and to repatriate all of his assets to the United States. The JFSC continues to liaise with the US SEC,” the statement said.  

Investment “strategy”

Providence Group was launched in the US in 2004 by Brazilian lawyer Buzaneli, specialising in secured business lending, primarily in the US, Brazil, and Asia.

Providence Global owned a Brazilian factoring company, Providence Fomento Mercantil, Investimentos e Participações, which invested in Brazilian debt, specifically the factoring of receivables (the purchase of debt) of small and medium-sized businesses.

The closed ended absolute return fund aimed to provide investors with annual returns of between 7% and 14.25%.

The fund lent money to the factoring company based in São Paolo for between 30 and 180 days. The short term debt was purchased at a discount of more than 2% per month with the returns collected at par.

Minimum investment in the fund was $50,000, €37,500, or £30,000. 

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About Author

Kirsten Hastings

Senior Reporter

Kirsten is a senior reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2015 after two years working as a reporter covering the staffing and recruitment industry. Kirsten has a Masters in Financial Journalism from the University of Stirling. 

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