Funds sold by Lumiere found “too risky”: Fraud trial

A fund sold by now defunct wealth firm Lumiere in Jersey by disgraced financier Christopher Bryne was deemed “too risky” by his former bosses, according to testimony given in court as the fraud trial continues.

Lumiere founder Christopher Byrne stands accused of losing £2.7m of money from clients by knowingly getting them to invest in high-risk company Providence, which was offering Brazilian debt-factoring products promising returns of 12%. He is facing 21 charges,  all of which he denies.

His former boss at Orbital, Paul Knight, told the firm considered whether to offer Providence funds, but some of the directors considered the fund too risky, the Jersey Evening Post reports.

“Chris [Byrne] mentioned it to myself and other directors,” Knight said. “I think there were marketing people employed, they had a presence in Guernsey, and the marketing people went to various places in the Channel Islands.

“He [Byrne] was very keen on it and thought it might provide a solution for a number of his clients.”

After two of the directors travelled to Guernsey to visit the Providence offices at their own expense, the firm decided not to offer the funds to most investors.

Where Providence was offered, it was offered to specialist investors, he said, and Orbital developed a policy that those investors should be explicitly told they could lose their money and that the investment should not exceed ten per cent of an investor’s wealth.

At Lumiere, however investors have given evidence that they believed they were making low-risk investments in that fund, but the court heard earlier this week it was actually a high-risk investment in Brazilian debt factoring.

Among those who lost substantial sums, the court was told, were a 79-year-oldpartially sighted woman and a French elderly couple with limited English skills, as reported by International Investment.

Bryne left Orbital amicably in 2015 to set up Lumiere, of which Providence was a majority shareholder.

The 50-year-old defendant received payments from Providence for his investment work through a number of channels, which included a £3,000 bonus paid for every £350,000 invested with Providence through Lumiere over £4m, quarterly £75,000 payments and those he received as a shareholder in Lumiere Wealth.

The complex system of payments would have totalled more than £1.5m in remuneration for Byrne in 2016, had the firm not gone under, the court heard.

The trial is expected to last three more weeks.

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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