The conviction of a personal finance consultant who has been found to be running his business without a licence, amid claims that he invested his clients’ money in high-risk start up companies without their knowledge, has been dubbed a “landmark” decision for the region.
Financial adviser Neil Grant – a Scotsman specialising in expat financial advice – was convicted by Dubai Criminal Court of operating his company without being registered with the authorities.
According to a report in UAE local news outlet The National clients of Grant raised the case with Dubai Public Prosecution, with the Department of Economic Development supporting claims he had operated without a licence.
One of the investors said that Grant’s conviction a “landmark case” with a financial advisor taken to criminal court and judgment has been ruled in the victim’s favour. As a result of the conviction the victims are now pursing Grant in the civil courts in a bid to recover losses.
A number of his clients have alleged that the Scotsman invested in ‘risky’ investments such as waste removal firms and student accommodation in the UK, without giving them proper indication of the risk involved and ended up losing their investments in the process.
Clients that spoke to The National said they individually lost an average of about £100,000 due to their dealings with Grant.
Grant, who ran Prosperity Offshore Investment Consultants, did not attend an appeal hearing held in November 2017 relation to his prosecution and left Dubai. He was fined Dh2,000 at the time.
Now a civil case has been opened by his victims to try to recover their investments with estimated total losses potentially running into millions of pounds.
Grant did not respond to repeated attempts to contact him in recent months, and his lawyer decline to comment when approached during his court case, The National said.
One of his clients, Amber Waheed, who said that she was initially recommended to Grant by a circle of friends, is one of a number of investors hoping to recover their losses through a civil prosecution.
Waheed said that her lawyers told her that this is “a landmark case in that it’s the first time a financial advisor has been taken to criminal court and judgment has been ruled in the victim’s favour”.
She said that she had taken Grant’s advice as he was also an expat and “understood the financial rigours of investing here”.
“He came across as trustworthy – especially as he had been recommended by friends,” Waheed told The National.
“Other high level people with money had invested with him, so I thought – why not? I gave him a substantial sum, and others gave him millions of dirhams and have lost their life savings. The average amount lost is about £100,000 pounds.”
“He had about 400 clients, and was taking a percentage from setting up funds, commissions and fees for moving investments to other funds.”
Investors grew concerned when they were told the value of their investments were wildly fluctuating in price, with many claiming to be surprised as they believed that they had selected more stable, long term investments.
Further investigation by investors uncovered details of the funds they had been invested into, which turned out to be high risk but offered huge commissions for Grant.
Most were described as short term, high risk, unregulated, illiquid funds, The National report said.
“The evidence against Neil Grant was complicated and I was very lucky to receive a verdict as Neil operated cleverly,” Waheed said.
Another person to take financial advice from Grant, who The National names as David, is a British expat who moved to Dubai in 2003, who took out four investment plans understood to worth about $400,000.
Three were supposed to be long term plans, and one was a shorter, higher risk investment.
“I was naive and believed what I was told,” he said. “Now I realise they were high risk, equity funds which are pretty unregulated. It is not something I would want to put my life savings into.”
“He was recommended to me, and I then recommended him to others – which I now feel bad about.”
“Looking back, it was a hard sell from him. Neil was a very personable chap, and I would be in his office for hours discussing things with him.”
“His sales technique was to get to know me and my family, to win our trust and come across as a friend. He was very persuasive, and I ended up with two plans from the same provider that were virtually identical,” David told The National.