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Naked Capitalism shines a spotlight on Carbon Neutral Investments

Naked Capitalism is a blog set up by Yves Smith. She’s an expert on investment banking and the founder of Aurora Advisers, a New York-based management consulting firm. Carbon Neutral Investments is a company that, before it changed its name, provided services for a long list of companies that sold carbon credits as investments.

REDD-Monitor occasionally receives comments asking how someone with a training as an architect, an MSc in Forestry and 20 years experience as an environmentalist, can write about carbon credits as an investment. Here’s a typical comment along these lines (it also happens to be the most recent):

chris, who gives you the power to sit in Jakarta and blog non-sensical rubbish about a subject you no absolutely nothing about?
 
i doubt you have ever made an investment in your entire life, and probably do not no the difference between an IPO and a CFD.

Perhaps surprisingly, this wasn’t signed by Nigel Molesworth. Nevertheless, I think the answer should come from him: “A chiz is a swiz or a swindle, as any fule kno.”

Richard Smith’s series of posts on Naked Capitalism about Carbon Neutral Investments is filed under “ridiculously obvious scams”. He’s on safe ground with that classification, at least since 29 March 2013, when the UK’s Financial Services Authority put out a warning against Carbon Neutral Investments. The Financial Conduct Authority (as the FSA is now called) subsequently updated the warning to include Gemmax Securities:

Smith’s series on Naked Capitalism about Carbon Neutral Investments is excellent and well worth reading in full, but here’s a handy guide to the first five posts:

    28 October 2013: How Novice Eco-Warrior Michael Bloomberg Ended up Looking as if he Endorses Carbon Credit Scams

    Michael Bloomberg, the mayor of New York, probably wouldn’t want to be associated with a carbon credit scam. But there he is on CNI (UK) Ltd’s website on the front cover of April’s issue of L’Uomo Vogue (the Italian version of men’s fashion magazine Vogue) over a presentation about Carbon Neutral Investments Limited from the same magazine. At the time, as Smith notes, Carbon Neutral Investments was offering its services to a large number of boiler room companies selling carbon credits as investments.

    Embarrassing for Bloomberg certainly. Even more so for the editor L’Uomo Vogue. But it seems that L’Uomo Vogue has been taken in even further. According to L’Uomo Vogue‘s puff piece about Carbon Neutral Investments, the magazine bought REDD carbon credits from Carbon Neutral Investments, “although they are more expensive” than credits from hydropower dams or wind farms. L’Uomo Vogue chose REDD credits because of the benefits for “the environment and the community that they provide. We believe in responsible publishing.” Yeah, right.

    29 October 2013: The Glam and The Scam: Sauber Formula 1 Team and its Partner, Carbon Neutral Investments, Limited

    Smith takes a look at the relationship between Sauber Formula 1 Team and Carbon Neutral Investments, in particular how Sauber Formula 1 Team tracks the re-branding of Carbon Neutral Investments to CNI (UK) Ltd. In April 2013, Carbon Neutral Investments split into three companies: CNI (UK) Ltd., Gemmax Solutions, and Opus Capital. The FSA warning about Carbon Neutral Investments came just a few weeks before the split. Here’s Smith:

    Possible motivation: Seakens has been having some uncomfortable exposure in the national press relating to two of CNI’s scammy related companies, Anglo-Capital and Carbon Green Capital. Hiding that little contretemps away from the likes of Sauber, (CNI’s partner list is long and lustrous, BTW, as we will see) might make a whole lot of sense, for CNI.

    30 October 2013: FBI Raids, Lord Heseltine’s Haymarket Media Group, Financial Regulator “Crackdowns”, “What Car” Magazine … and Carbon Neutral Investments Limited

    What Car is published by Haymarket Publishing, which was founded by UK Conservative politician Michael Heseltine. In September 2011, Carbon Neutral Investments put out a press release announcing that “AGT Investments has re-branded, becoming Carbon Neutral Investments (CNI)”. The press release explains how CNI offset What Car‘s Green Awards in 2011, and it includes a quotation from Thomas Knifton, then-CNI co-chairman.

    Smith takes a romp through Knifton’s history of involvement in one dodgy company after another. He also points out that another CNI partner James Brown’s claim to have a Diploma in Particle Physics from Oxford University is bogus, “because there is simply no such thing as a Diploma in Particle Physics from Oxford University”.

    To sum up: two blokes, with two fake career resumés, an £80 million investment fraud (and an FBI raid as a side order), two boiler rooms shut down by the FSA. and a current scam warning from the FCA.
     
    Great partner choice, “What Car” people! Great supervision, FCA!

    31 October 2013: The Careless Organizers of Gumball 3000 are Hooked Up with Boiler Room Scam “Servicers” Carbon Neutral Investments (CNI)

    Gumball is a motor rally on public roads. Smith isn’t a fan:

    Perhaps sensing that this annual waste of rubber, petrol, environment and the occasional innocent bystander ought, in the long term, to attend to its image better than that, the Gumball 3000 has announced its intention to go “Carbon Neutral”, eventually.

    And guess who is Gumball’s carbon offsetting partner? Step forward CNI, or the company formerly known as Carbon Neutral Investments.

    1 November 2013: Carbon Neutral Investments’ Trail of Disaster: How Carbon Credit Con Artists use Google Adwords to Work the Recovery Scam

    Smith turns his attention to the next stage of the carbon credits as investments scam: the Recovery Room. A website called whichcarboncredit.com is using Google’s Adwords to advertise their services for people searching for many of the company names for which Gemmax Solutions (another company formerly known as Carbon Neutral Investments) offers “clearing and settlement services”.

    On their web site it appears that all whichcarboncredit.com really want to do is collect the enquirer’s email address and telephone number. Top tip: don’t give it to them.

    Here’s a screenshot, to save you wasting your time visiting it (and running the risk of inadvertently typing in your phone number):

    The website whichcarboncredit.com was set up by Luke Ryan. He’s a director of Enviro Associates, and was caught by the BBC last year making misleading claims about how much could be made by investing in carbon credits. Paul Seakens, who was once the director of Carbon Neutral Investments and is currently the director of Gemmax Solutions, also used to be a director of Enviro Associates (until shortly after the company appeared on the BBC).

 

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11 Comments

  1. Hi Chris,

    Do you not think all these articles could be perceived as somewhat one sided? Is it not possible that CNI UK has nothing to do with the aforementioned Carbon Neutral Investments, that different departments of a company split up and that the only possible achievement you may be facilitating is preventing corporate investment into emissions reduction projects around the world? Something which I personally have studied in great depth, have devoted a large part of my life to make a reality and firmly believe is the way to promote environmentally sustainable growth in developing countries. Please explain because you make a lot of assumptions which are not correct or accurate.

    Your ‘knight in shining armour’ who you feel can being creedance to your articles, Yves Smith (AKA Susan Webber) lists Goldman Sacs in her resume. So which is it? You either you think Goldman Sacs are just really nice people (whiter than white) or you don’t think ‘brush tarnishing’ is applicable when it suits your argument? Furthermore, please explain your relationship with Peter Sunde, founder of Pirate Bay who was found guilty of theft and fined in excess of $3.6 million.

    Regards,

    A REDD Blogger

  2. @Joe Bloggs (#1) – You must be very young to have devoted a large part of your life to carbon trading. And if you’d really studied this in great depth you would know that by 2012, almost half of all CDM carbon credits had been awarded to factories for destroying HFC-23. Nothing to do with sustainable growth and certainly nothing to do with addressing climate change.

    Yes, Susan Webber worked for Goldman Sachs (1981-1983). But the fact that one ex-Goldman Sachs employee runs an excellent blog about the mess the world’s economy is in, does not mean that I think everyone who ever worked at Goldman Sachs is a really nice person.

    I have no relationship with Peter Sunde. You might want to check your facts though. The Pirate Bay four were accused of “assisting in making copyright content available”. The total fine was US$3,620,000, or US$905,000 each. TPB AFK is worth watching.

  3. @ChrisLang I appreciate you drawing attention to the topic of HFC-23, which coincidentally was the subject of my thesis. The HFC-23 issue is perfect allegory for the problems which the carbon market faces; I agree with you that the market was abused. However, interestingly after the creation of the carbon market the efficiency at which the industrial product HFC-23 was captured increased dramatically from around 70% to 99%, above and beyond the point at which it was thought possible. Thus the commercialising of HFC-23 capture promoted technological advancement.

    To your second point, I hope you can agree that your point of the ‘Naked Capitalism’ blog being ‘excellent’ is subjective. You may think that as it corroborates your articles. If your definition of ‘excellent’ is ‘entertaining’ then I may agree with you. However if you are suggesting it is factual or accurate then I’m afraid is not.

    I enjoy the point you raise about my labelling Mr Sunde’s conviction as ‘theft’ it was done on purpose, to make a point. One could interpret his conviction as theft, though that was not the legal term applied. With reference to Yves Smith/Susan Webber is her most recent article, AGT/Carbon Neutral Investments etc, she states AGT’s ex partner Carbon Neutral Investments which is simply false (if I have a bank account with HSBC I am not a parter), the word partner has a legal meaning which is incorrectly applied and therefore misleading, the point that McLaren have a deal with Carbon Neutral Investments, again simply not true; it is with CNI UK a different company.

    Your third point, concerning Mr Sunde I find the most amusing. It may be true that you have no relationship with Mr Sunde, though you use Flattr, a company founded by Mr Sunde, whose name you mention on your website. If I were to use or Ms Webber’s method of reporting, one could easily jump to the conclusion and make a strong case, that you do have a relationship with Mr Sunde, even though it may not actually be true.

    My point is Chris, that I think it would be prudent for you to be 100% sure of ‘facts’ before you publish them; otherwise you may as well start writing about Area 51, the Lunar Landings or the 911 cover up.

    Regards,

    Joe Bloggs

  4. @Joe Bloggs (#4) – Could you send me a copy of your thesis, please? It sounds fascinating.

    The post about AGT/Lotus F1 on Naked Capitalism was written by Richard Smith. Why don’t you post your comments about whether AGT and CNI were partners on Naked Capitalism?

  5. As it appears the world knows about the dubious characters running CNI and associates, why are they not in gaol?

  6. @chrislang I can send it across to you.

    I notice you chose to ignore my comments about Mr Sunde and your relationship with him or lack there of, is this as a result of the fact you didn’t feel it necessary to respond to a slanderous and/or erroneous claim?

    With reference to the Naked Capitalism blog “Truth never penetrates an unwilling mind” Borges.

    Regards,

    Joe Bloggs

  7. @Joe Bloggs (#7) – I didn’t ignore your comments about Peter Sunde. I pointed out that I have no relationship with him.

  8. @chrislang So you must accept the premise that even though you use a service that Mr Sunde created, Flattr, it is possible for you have no relationship with him at all.

    That being the case, why do you insisting on publicising ‘Lang/Sunde’ esque about the above companies as if there are facts, when they are as factual as your relationship with Mr Sunde/Flatrr.

    Regards,

    Joe Bloggs

  9. @Joe Bloggs (#9) – What point are you trying to make?

    Perhaps you’d like to start with a description of exactly what the “clearing and settlement services” that Carbon Neutral Investments provided for the companies on its list? I asked Paul Seakens this question, and here’s his response:

    “The services involve CNI in providing settlement and custody services for firms engaged in buying and selling on the spot carbon market. This involves us in acting as a settlement agent for members of our clearing systems by settling the cash element of the transactions and holding the credits in nominee for both parties. Why is any service necessary? There was a demand for the service and we had the capability to fulfil the demand.”