Richmond AM and Bibby secured around $5m (£4.1m, €4.5m) from 36 clients to invest in a company and a plot of land in Phuket, Thailand, in which Bibby and his wife held substantial undisclosed interests.
Advisers and investment managers
The investors’ money was routed into three unauthorised Optimizer Funds, of which Bibby and Richmond AM were not only the investment advisers, but also held management powers over them.
Richmond AM and Bibby directed monies from the Optimizer Funds into two other funds (Asia Property Funds) of which they were also advisers and investment managers.
In November 2007, the Asia Property Funds loaned money to The Fairway Holding Company Limited, a Thailand-based company in which Bibby and his wife held a combined stake of 75%.
The loan – essentially monies invested in the Asia Property Funds from the Optimizer Funds – were then used by Fairway to fund the purchase of the Phuket land, for which Bibby paid part of the purchase price.
The Optimizer Funds have been suspended since April 2010, with redemption requests from clients denied. The Optimizer Funds have been in limbo since suspension with the Asia Property Funds having become its major assets whilst the Phuket land remains unsold and Fairway has defaulted on the loan owed to the Asia Property Funds.
The regulator said that Richmond AM and Bibby failed to properly avoid and disclose potential conflicts of interest to its clients, abusing clients’ trust.
"In so doing they demonstrate they are unfit to be licensed to conduct regulated activities," the SFC said.
In particular, they found that Bibby played a central role in managing how the clients’ monies in their portfolios were invested and he initiated the structure of funds to channel the clients’ investments to a company and a property in which he and his wife have substantial interests.