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Windward Capital: Another carbon credit boiler room scam bites the dust

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Windward Capital Ltd sold carbon credits to the public as an investment. Earlier this month, it was ordered into liquidation in the High Court for duping investors with false and misleading claims. Two related companies, Met-X Corp. Ltd and Imarc Ltd, were also closed down.

The good news is that the Insolvency Service has investigated and closed down another three scam companies.

The bad news is that the money these companies scammed out of vulnerable people is gone. The headline of the Insolvency Service’s press release reads: “Investors’ cash all blown away as carbon credits sales company is discredited”.

“A shameful deceit”

Windward Capital sold carbon credits to retail investors, persuading people to hand over £8.50 per credit. The company raised a total of £900,000, of which £682,000 went to pay sales commissions.

Chris Mayhew, Company Investigations Supervisor, at the Insolvency Service describes Windward Capital’s operations as “a shameful deceit”. He lists some of the lies that the company’s sales team used to entice people into their trap:

One investor was told that Windward Capital Limited was backed by a German bank, another that the floor price of the credits would rise to £16 each by 2016 and another that within 6 months a national haulage company would be buying each credit for £13 to off-set its own emissions thereby delivering the promised investment gains.

Director was on “work experience”

Windward Capital was registered in April 2012. Its sole director, Charles Amaning, told investigators from the Insolvency Service that his directorship was “work experience”. The firm was really run by the sales floor managers, he said. Unfortunately, he couldn’t remember any of their names.

Windward Capital’s website has disappeared, but in a discussion about the company on The Motley Fool website, “sharw01” points out that accessing the website required accepting the following statement:

The information contained in this website has been prepared by Windward Capital Limited (08029519) for general informational purposes only.
 
This website should not be construed as instructions to sell or give advice to whom it is unauthorised to make such an offer. The information contained on this site has been directed at persons authorised to advise investors with such opportunities. This website does not constitute or offer investment and persons should not rely on content from the website as advice.
 
Windward Capital Limited does not accept any liability to any person who does rely on the content of this website. Persons seeking particular advice should consult qualified professionals familiar with the appropriate guideline, legislation and regulations.
 
Wind Ward Capital do not list or have any dealings with any stock exchange. Please note that the value of investments and the income derived from them may fall and you may get back less than you invested. Past performance is not a guide to future performance. No investment is suitable in all cases and if you have any doubts as to an investment’s suitability then you should consult qualified professional advice.
 
The information on this website has been constructed and obtained from sources which we believe to be reliable and accurate. However, without further investigation, this cannot be warranted.

The last paragraph amounts either to an admission of incompetence, or an admission of negligence. Or perhaps both.

Windward Capital bought its carbon credits from a firm called Met-X Corp. Ltd and Imarc Ltd provided “marketing services”. Imarc was registered in June 2010 and its sole director was Mustafa Akindele. He has no other directorships.

“A serious risk to consumers”

Met-X Corp is much more interesting. The company was registered in October 2012, and this isn’t the first time that Met-X Corp’s sole director, Stephen Coles, has appeared on REDD-Monitor.

Coles was director of a company called Simply Trading Group, along with Luke Ryan and Michael Yamoah. In 2010, the Financial Services Authority (as the Financial Conduct Authority was called back then) banned all three from acting as senior managers.

Commenting on the ban, Margaret Cole, then-director of enforcement and financial crime at the Financial Services Authority, said:

“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.”

Luke Ryan continued to pose a serious risk to consumers as the director of Enviro Associates, which Ryan registered seven months after he was banned (and on DueDil at least, Luke Ryan has changed his name to Mrs Beverley Ryan).

Ms Beverley Ryan and Mrs Zara Ryan are directors of a dodgy-looking company called EVR Bullion. (Mrs Beverley Ryan retired as director in November 2013.)

Graphene: the next investment scam

In addition to being director of Met-X Corp Stephen Coles is a director at DMS Distribution Ltd, Graphene Trade Limited, and Vape AT Limited.

Graphene Trade offered to sell retail investors units of graphene, that it would store for a few years, by which time, the company claimed, the price of graphene will have soared. Graphene Trade could then sell the units of graphene for more than the investors paid for them.

If that sounds too good to be true, that’s because it is. The Financial Conduct Authority’s warning about companies offering investments in graphene states:

We first uncovered this issue when we found evidence of a ‘graphene investment firm’ on the computers of a suspected boiler room. So we believe that the same firms that have sold other high risk, dubious products such as carbon credits, rare earth metals and overseas land and crops, are now trying to sell graphene.
 
Manufacturing companies that use the metals almost always buy them in very large quantities, making it highly unlikely they will deal with small independent retail consumers.
 
It has been reported to us that callers promoting investments in graphene are using dubious, high-pressure sales tactics and targeting vulnerable consumers.
 
There is a strong possibility of fraud with graphene because it is unregulated and it is difficult to confirm that you have bought the genuine product.

In 2014, Dexter Johnson, editor of the Graphene Council’s quarterly newsletter, wrote a piece titled “Buyers Beware”, in which he explains why investments in graphene are a bad idea.

Johnson points out that the price of units of graphene is unlikely to increase for two reasons. First, it is a manufactured product, so if there is a shortage of graphene, producers just need to make more of it. Second, graphene producers are working to bring the price of graphene down in the hope that this will open up applications for the material.

Here’s what Johnson writes about Graphene Trade and Stephen Coles:

Another UK-based company, Graphene Trade, markets itself on its website as “a new market focused broker of future commodities offering a window into speculation.” Based on its name and its marketing copy, the company would seem to offer a commodity investment in graphene. However, when we attempted to confirm this and find out more about what investment instruments Graphene Trade offers its clients for this piece, we were rebuffed both over the phone and via e-mail. Stephen Coles, Director of Graphene Trade, explained to us over the phone that he objected to a piece this editor had published in the online version of IEEE Spectrum, which would prevent him from doing an interview with us for this piece.

Carbon credits “are a wasting asset”

Windward Capital, Met-X Corp and Imarc join the increasingly long list of companies that have been shut down in the public interest for selling carbon credits as investments. In his comments in the High Court Mr Registrar Jones said:

It is apparent that carbon credits were being presented to the public as investments. The evidence shows that investors will not see any increase in the value of their credits to the extent necessary for them to realise a profit on their investment. The evidence shows they are a wasting asset. The price was so in excess of the market price it cannot reasonably be called an investment and I accept on the balance of probabilities that it was not a genuine investment. It is plain to me that the business being carried on is contrary to the public interest. In light of all of the facts it is apparent there have been objectionable trading practices.

But no action has been taken against any of the directors of these three companies that have been closed down. And no action has been taken against any of the people working the phones for these companies – the people who between them pocketed £682,000 in sales commissions.
 

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  1. Mr. Mitchell is also executive director of Canopy Capital, an investment vehicle set up in 2007 in London in which the canopy program has a 20 percent stake, with the remainder held by international investors. Canopy Capital has invested in Guyana’s forests, gambling that as natural ecosystems become increasingly rare, ecosystem services will have increasing monetary value. For precedent, Mitchell points to the carbon market.
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