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Before Luke Ryan founded Enviro Associates, he was censured by the Financial Services Authority

“Enviro Associates specialises in providing the opportunity to purchase Verified Carbon Standard (VCS) carbon credits within the de-centralised unregulated speculative voluntary carbon credit spot market for high risk speculative investment for the future and individual and corporate offset purposes.”

The quotation above comes from Enviro Associates’ website. Enviro Associates, in other words, sells carbon credits as investments.

Before going any further, let’s remind ourselves of the warning that the Financial Conduct Authority put out in September 2013. In it, FCA says, “you should avoid investing in carbon credits” and offers advice on avoiding “what is most likely a scam”:

Now, let’s keep reading down Enviro Associates’ website, which explains that carbon credits are not a suitable investment:

Carbon Credits and the Secondary Carbon Credit markets currently lack transparency due to their infancy and immaturity. The regulatory environment right now within these markets are currently not robust and it can be difficult to accurately value secondary carbon credits.
 
KNOW THE PRODUCT: Voluntary Carbon Credits were not designed to be purchased for investment purposes; for that reason Carbon Credits (VERs) are not for all specifications of Investors due to its high risk and undeveloped market landscape and uncertainty.

And the website provides links to its own small print, where it practically acknowledges that you won’t be able to sell your carbon credits:

The purchase of carbon credits is speculative and is not a low risk product. Purchasing carbon credits for investment purposes is done on the higher risk speculation their may be a maturation in voluntary carbon markets in the future that will allow investors to dispose of their holdings.

A year ago, the BBC filmed Enviro Associates’ director, Luke Ryan, saying there was “serious money” to be made in carbon credit trading. The BBC caught Ryan on film saying that,

“In the next four to five years the market could go from anywhere from 100 to 500%. So you could be buying at £5.50 now, but in a year’s time it could be [worth] £10, £11, £12, £13.”

A year on, and the carbon credits that Enviro Associates sold for £5.50 are still nearly worthless – just as they were back then.

Enviro Associates is a clearing member of Gemmax Solutions (one of the companies formerly known as Carbon Neutral Investments). A few days ago, Gemmax Solutions put out a statement in which it admits that for nearly a year Gemmax Solutions (and Carbon Neutral Investments before it) has not been able to do anything much because its credits were on the CDC Climat Registry. CDC Climat closed its registry in December 2012:

… we are unable to offer a number of services;

  • We cannot provide serial numbers for your credits
  • We cannot deliver your credits
  • We cannot retire your credits should you wish to do
  • We cannot receive credits on your behalf from other service providers

There’s more about the implications of Gemmax Solutions’ statement on Naked Capitalism. Why Gemmax waited for almost a year before making this announcement is anyone’s guess.

In the meantime, Luke Ryan, Enviro Associates’ director, has set up another little venture: whichcarboncredits.com. The entire purpose of the website seems to be to collect readers’ email addresses and phone numbers, in exchange for a brochure (pdf file, 307.7KB). Featuring Enviro Associates’ logo on the front page, the brochure is full of misleading statements. Such as this one:

The only thing that Enviro Associates got right about this is the date. On 1 November 2010, Bloomberg reported Nobuo Tanaka, executive director of the International Energy Agency as saying that, “To achieve a 50 percent reduction in carbon dioxide emissions by 2050, you need it [carbon] to be $175 per ton.” He did not say that he expects the carbon price to reach US$175 per ton, but that the price needs to be so high to halve emissions by 2050.

I don’t expect that any of this will put off some people, judging from their comments about Enviro Associates on REDD-Monitor. “Bob Wain” writes that he is “satisfied that the product I am looking at is completely legitimate following my own research” and “Simon” writes that “I trust their judgement after my own research. They are not mis-selling, They were honest from the start and encouraged me to source my own data rather than just taking their word for it.”

Of course Simon and Bob could just be sock puppets. But perhaps this little piece of news reported by The Telegraph in July 2010 will make even them think twice about Enviro Associates:

The Financial Services Authority has taken another scalp in its efforts to crack down on market abuse and mismanagement in the City.
 
The watchdog has banned three directors at Simply Trading Group (STG), a small private client advisory stockbroker, from acting as senior managers after they fell short of its standards.

The three directors at STG were Luke Ryan, Stephen Coles and Michael Yamoah. All three were censured and banned from senior management positions. They managed to avoid fines of £17,000 each by pleading financial hardship.

In its report about the company, the FSA described STG as follows:

STG is a small private client advisory stockbroker, which operates in Hampshire. It specialises in telephone sales of securities traded on the main market of the London Stock Exchange to retail clients.

The FSA’s ruling on Ryan includes this passage:

The FSA has also concluded that you are failing to meet the minimum regulatory standards required in terms of competence and capability, and are not fit and proper to carry out any controlled function involving the exercise of significant influence over any person in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm. Accordingly the FSA has decided to withdraw your approval to perform controlled function CF1 (Director) and make the Prohibition Order against you because of the nature of your failings and the potential impact on customers.

Money Marketing reported Margaret Cole, FSA director of enforcement and financial crime as saying that,

“We believe that Coles, Ryan and Yamoah would pose a serious risk to consumers and to confidence in the financial system if they were to act as senior managers in an authorised firm. For this reason, they have been prohibited from carrying out any senior management roles in the future.”

Seven months later, Ryan registered Enviro Associates, a company not regulated by the FSA (or the Financial Conduct Authority, as it has since been renamed). In June 2011, Paul Seakens became a director of Enviro Association. (Seakens was also a director of Carbon Neutral Investments, before the company split three ways in April 2013 – he is still a director of Gemmax Solutions). Seakens retired as company director of Enviro Associates on 1 December 2012.

Ryan posed a “serious risk to consumers” as director of Simply Trading Group. Judging from the recent scumbag correspondence from Enviro Associates (as well as the simple fact that this is company selling near worthless carbon credits as investments), it appears that little has changed.
 


PHOTO Credit: ‘Misleading’ carbon credit claims by Enviro Associates, BBC News, 12 November 2013.
 

Leave a Reply

  1. Its hard to know what to say except that the agencies whose main purpose is to protect investors appear to be not fit for purpose. So Mr Ryan escapes a fine due to financial hardship. What about those who have lost their life savings investing in carbon credits promoted by Enviro and others?

    And the FSA director prohibits him from carrying out any senior management roles (presumably only in an authorised company). So what does he do? Sets up a firm selling unauthorised financial products. Couldn’t the authorities put 2 and 2 together?

  2. @chrislang

    Another piece of misinformation Chris which just is not true and misleading.

    “Gemmax Solutions (one of the companies formally known as Carbon Neutral Investments)”; this is simply a false statement. Either you understand and are purposely misleading people, or you simply do not understand in which case maybe you need to get a better grasp of legal terminology.

  3. @Joe Bloggs (#2) – Maybe this is a good time to re-read the warning put out by the Financial Conduct Authority:

    Enviro Associates is a clearing member of Gemmax Solutions. In its recent statement, Gemmax Solutions explains that it checks the websites of its clearing members and that, “where inaccurate claims or statements were made a correction would be demanded”. Here’s what Enviro Associates has to say about Gemmax Solutions (I’ve highlighted the relevant bits):

  4. The con men having sold carbon credits (fools gold) in the names of EcoSynergies, Gemax Solution and others are no better than other fraudsters selling other worthless securities and should therefore be prosecuted.

    I have kept a list of names involved should any one require them