"I never believed it was a fraud happening under our noses"

Wednesday 05 September 2018

A former financial advisor, accused of losing £2.7million of money from clients by knowingly getting them to invest in a high-risk company, has denied mis-selling the investments, or concealing facts from his clients in Royal Court.

50-year-old Christopher Paul Byrne, who ran Lumiere Wealth Limited, appeared in the Royal Court yesterday to answer the charges against him.

In total he was charged with 18 counts, but on Monday, as the trial was entering its fourth week, one was dropped after Royal Court Commissioner Sir John Saunders ruled there was no case to answer.

After the prosecution closed its case, Mr Byrne was the first, and only, witness for the defence. Before he appeared, his advocate, Olaf Blakeley, explained that the allegations against Mr Byrne fell into two categories. On one hand, there are alleged regulatory offences which means Mr Byrne did not comply with the requirements under the Jersey Financial Services Law. Mr Byrne is also accused of having mis-sold investments to a number of investors - including an elderly French couple, a pensioner and a retired teacher - either by providing false information or withholding information.

Advocate Blakeley said that Mr Byrne always dealt with his clients fairly and appropriately. He said Mr Byrne's main incentive was to make people money. "It was always his intention throughout his career as a financial advisor and he was very good at it... He had no interest in lying to investors." He added that many investors Mr Byrne worked with became close friends. 

Pictured: Advocate Olaf Blakeley is defending Mr Byrne.

The advocate said that Mr Byrne "genuinely and honestly believed" what he told investors when giving them advice about the Providence Fund. He explained that Mr Byrne invested a "substantial amount of money" in the company and so did many of his colleagues, family members and friends. "He wholeheartedly believed in the legitimacy of Providence as a good investment," said Advocate Blakeley.

Answering questions, Mr Byrne said: "I never believed it was a fraud happening under our noses, and that the money actually wasn’t going to Brazil. I truly never thought it was a fraud."

The defence counsel explained that Mr Byrne considered facts such as "volatility, past performance, reputation and good standing of professional auditors and advisers" before offering the investment to clients.

He said then when Mr Byrne used the word "safe" with his clients, he used it in the context of the mechanics of factoring - a financial process whereby a company buys up another company's debts for less than the total amount and profits by chasing up those debts - or in terms of past performance of the investment and its volatility.

He added that Mr Byrne told his clients the investment was a medium risk one, and that therefore clients couldn't expect it to be safe "against all eventualities."

"He certainly was not saying it was 'safe' in terms of fraud," Advocate Blakeley added.

Pictured: Mr Byrne's case is being heard by Royal Court Commissioner Sir John Saunders.

When his advocate asked him if he ever lied when talking to his clients or hadn't acted in their best interests, Mr Byrne simply replied: "Absolutely not." He also denied ever considering that he was mis-selling investments or concealing facts from investors in order to get them to invest in Providence.

One of the 18 counts Mr Byrne is charged with is inducing or attempting to induce an elderly woman to lend him £1million "on terms involving payment of interest or repayment at a premium, by dishonestly concealing the document he invited her to sign was an unsecured personal loan agreement."

Mr Byrne denied he took on the loan to renovate a property. In fact, he said he took out the loan to invest the money in Providence. He explained he did so to be the one facing the risks of the investment, and not the elderly lady. While the woman denied knowing where the money was going, Mr Byrne says she definitely knew, as she signed transfer bonds.

Talking about another investor, Mr Byrne said she was happy with the risk she was taking. He explained that the investment was only guaranteed in the case of political risks, such as political unrest or change in policies. "I definitely didn’t say the capital was guaranteed and protected," Mr Byrne said. 

Mr Byrne will continue giving evidence today.

His case is being heard by Royal Court Commissioner Sir John Saunders and Jurats Charles Blampied and Robert Chistensen, and is expected to continue for another two weeks.