# Liberty's Crystal Property Development Fund



## minimeg (5 Aug 2009)

Has anybody have invested or feel that the have been miss sold into this commercial property fund?

I was badly advised by a Financial Consultant to invest into this fund, now I'm left in darkness if I would loose 100% of my money?

I would be interested to speaking to anybody else that has invested in the fund.


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## Raskolnikov (7 Aug 2009)

minimeg said:


> Has anybody have invested or feel that the have been miss sold into this commercial property fund?
> 
> I was badly advised by a Financial Consultant to invest into this fund, now I'm left in darkness if I would loose 100% of my money?
> 
> I would be interested to speaking to anybody else that has invested in the fund.


How do you feel you have been "mis-sold" this product? Generally, the only people who have any comeback from being "mis-sold" a product, are elderly people who were sold products that clearly didn't suit their needs or people who bought products that (wrongly) promised no risk to their capital.

Can you give us more information about this financial consultant of yours. Who does he work for, did you pay him for his advice, do you have written evidence of all correspondence?

Personally, I think you were the victim of a slick sales patter. However, because you didn't do your own homework, you have no one to blame but yourself. In less than a few seconds on google, I pulled up this article that details how the fund would work.

http://www.timesonline.co.uk/tol/money/article745131.ece


> The fact that the *investments are locked away for seven years* in both cases could also put off some investors.
> 
> . . .
> 
> ...


I'm sorry to say, but you've been sold a lemon. The risk that this fund took is quite frankly breath-taking. Buying land without planning permission, using massive amounts of leverage, zero diversification. What's even more amazing is the fees that were being charged. Only the very best and successful hedge fund managers are able to charge those kind of fees, nevermind a couple of Irish chancers.

Again, I'm sorry, but you're going to lose most of your money on this.


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## minimeg (25 Aug 2009)

Hi,

Thanks for your comments,

I feel that I was mis sold becuase I was approched by my accountant and was introduced to this financial consultant, who advised me that it wasn't a high risk investment, and that it was a calculated risk.

If he had made me aware it was a high risk, I wouldn't not have touch this investment, I put my faith in this man.  I feel cheated and that I didn't do my homework.

I got plenty of corresponds that the climate was a good time to invest and that it plans to carry on for the next 10 years.


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## Brendan Burgess (25 Aug 2009)

To echo what Raskol has said...

What did the paperwork say? I would be very surprised if it was not highlighted as high risk. I had not heard of the fund before, but it screams "high risk".  If they mentioned "calculated risk", that suggests high risk to me as well. 

The financial consulant should have done a "reasons why" letter saying why he was recommending this product. If he says that you are a low risk customer and then he recommended this product, you should get your money back.

but if mentioned that it was a risky product and you signed this off, then you will have no case.

Brendan


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## minimeg (25 Aug 2009)

I was verbal assured that there was low risk involved, when it was extremely high risk, the brochure does not sate low or high risk, it wasn’t highlight high risk at all.  He states that it was low risk.  and that he has put his own money in it too!

Also never received a “Reasons why”, there was a lot of verbal conversation.


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## Brendan Burgess (25 Aug 2009)

Then you have a fair case for the Ombudsman. 

if the advisor did not give you the documentation he should have given you, he will be in a weak position. 

However, the Ombudsman will probably have to assess whether you should have known it was risky.

This is an extract from one of the brochures: 



> RISK FACTORS
> The return from an investment in the “Fund” involves certain risks and the market
> value of units in the fund is not guaranteed. Investors should make their own
> assessment of the risks involved in a property development investment.



To my mind, this is not highlighting the risk enough. But the Ombudsman might consider it adequate.

Brendan


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## minimeg (26 Aug 2009)

Has anybody been advised by a property consultant to enter this fund.  

Do they feel that they were misled, when it in fact it was told low risk and turns out high risk.

Has anybody taking any action and when to high court or finical ombudsman that has been badly advise about this highly geared funds,  what was the outcome.

I would appreciated  your view.


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## MOB (28 Aug 2009)

minimeg said:


> Hi,
> 
> Thanks for your comments,
> 
> I feel that I was mis sold becuase I was approched by my accountant and was introduced to this financial consultant, who advised me that it wasn't a high risk investment, and that it was a calculated risk.



Did your accountant undertake any advisory role in this other than to perform the introduction and tell you he had put his own money in?   Frankly, it doesn't help your case that you had your own ( ostensibly) independent financial adviser taking a look at the thing.


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## kmon5454 (11 Aug 2011)

Hi...

I'm in the same position as minimeg and would be interested in getting in touch with anyone else who feels the same.
Please email me at kmon5454@gmail.com


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## Brendan Burgess (9 Jan 2012)

From the Irish Independent, although I am not sure if it's an article or an advertorial.  Wed 23rd November 2005


*Liberty launch land development fund aimed at individuals and institutions*









          Wednesday November 23 2005

                LIBERTY Asset Management (LAM) has launched the Crystal Property Development Fund.    The fund provides an opportunity for investors wishing to benefit  from the substantial returns available in Ireland's land development  sector. 
   Commenting on the launch, Ian Lawrie, managing  director of Liberty Asset Management said: "This is a very exciting  product for LAM and demonstrates our commitment to continually providing  investors with solid yet innovative investment products. The fund -  open to individuals, companies, pension funds and ARFs - should prove  particularly attractive as, up until now, investors had little or no  access to such development deals." 
    Fund manager Crystal  Partners is headed up by chairman Domhnall Slattery. Other members of  the management team include Patrick Crowe (managing director), Sean Lyne  (director) and Noel Connellan (financial director) who together provide  an extensive proven track record in the property development sector. 
    Concentrating primarily, but not exclusively, on acquiring and  developing lands in Munster and Connaught's main towns and cities, the  fund will raise a minimum of ?25m and up to a maximum of ?45m. 
    The fund will close on December 14 or when the maximum ?45m is  invested. It will use non-recourse bank finance to provide a leveraged  return on investors' equity in the fund, with an expected average  borrowing ratio of 50:50 borrowing to equity. 
   In addition,  investors in the fund can also avail of an investor bank finance package  to borrow ?200,000 alongside their own ?100,000 invested, resulting in a  gross investment of ?300,000. 
   The interest on this loan will  be rolled up by the bank for the 7-year fund term and will be repaid on  the maturity of the fund. 
   A minimum investment of ?100,000 is  required, with a maximum of investment of ?1.5m. The promoters state  that ?18m in investor commitments has already been received. 
    Friends First has also committed to invest sufficient monies to  guarantee that the minimum ?25m is achieved, therefore the fund is  definitely proceeding.


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## Brendan Burgess (9 Jan 2012)

from [broken link removed]quoting the Sunday Business Post



> *[broken link removed]*
> 
> Posted on05 December 2010. Tags: [broken link removed], [broken link removed]
> Friends First, the life and pensions provider, has  confirmed around 133 investors in its Crystal Property Fund have seen  their entire €40m investment wiped out, according to The Sunday Business  Post.
> ...



Kathleen Barrington wrote about it in Jan 2011 in the Sunday Business Post - according to The Property Pin



> Investors in the now worthless Crystal Property Fund fear that Ulster  Bank will pursue them for every cent they owe, after the bank declined  to accept an offer of 80 cent in the euro from one investor who borrowed  to invest in the scheme.
> *The investor is one of 133 who put €40million in Friends First’s Crystal Property Fund.*
> Their  entire investment has been wiped out, but many of the investors still  owe Ulster Bank the money they borrowed to invest - plus interest.
> One  investor said he had put up €100,000 of his own money in the fund. He  also borrowed another €200,000 from Ulster Bank to invest in the fund.





Here is how one broker,  [broken link removed], described the risk .



> RISK FACTORS
> The return from an investment in the “Fund” involves certain risks and the market
> value of units in the fund is not guaranteed. Investors should make their own
> assessment of the risks involved in a property development investment.


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## RIPPED OFF (29 Mar 2013)

Brendan,

Do you know if there has been any successful claims brought by investors in this scheme either brought through the Financial Ombudsman or the courts?  I have heard of someone that has suffered badly from this scheme.


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## kmon5454 (29 Apr 2013)

We invested in this too. PAYE workers with two young kids. Got advise from accountant to invest in this. No fact find done. Told no risk. Not risk takers. Not high net worth individuals. Brought a case to the Financial Services Ombudsman (FSO) and it took 18months for the FSO to say it wasn’t under their jurisdiction. Absolutley dreadful service from the FSO. Complained but got nowhere. Waited so long for the FSO to come back to us now  told by a solicitor that the statue of limitations kick in now so we can’t sue for negligence. Paying interest on loan but reckon Ulster Bank will start looking for more. Would love to hear from others who invested in this or anybody with advise.


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## Monksfield (29 Apr 2013)

I cannot understand the basis on which the FSO could have declined to deal with it- it was a unit-linked fund (which is regulated) and your accountant must have been regulated (almost certainly by his professional institute) to carry on investment business.

Could you share with us the basis on which the FSO failed to deal with your case?


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## kmon5454 (1 May 2013)

This is a direct transcript of the letter received from the FSO-taking out the name of the Accountant and his company:

I refer to these four linked matters which were referred to me to review and to make a determination in respect of the jurisdiction of the Bureau to continue to investigate the complaints made having regard to the circumstances and nature of the cases.
I confirm that I have reviewed the files including all correspondence and submissions to date.
Following some preliminary investigation an issue has arisen which goes to the jurisdiction of the Bureau. Under Section 57BX(2) of the Central Bank and Financial Services Authority of Ireland Act, 2004, the Financial Services Ombudsman has sole responsibility for deciding whether a complaint is within his jurisdiction.
Firstly, it is clear from the submissions of the parties that the position of each of the four Providers is that they each seek to attribute liability in the matter to one or other of the other three Providers. The issue of liability is central to the dispute given the inter-twined nature of the investment as between the four separate providers. In order to make a determination on the issue of liability it would be necessary to exchange documentation as between all of the parties to the dispute. In my view, this would require a process of discovery which is beyond the remit of the Bureau and is more appropriate for a court. Given the manner in which liability has been put in issue, the usual exchange of documentation which takes place under the procedures of the Bureau will not adequately allow for this issue to be properly addressed.
There is also the related issue of inter-party indemnification which also arises from the manner in which liability has been put in issue - the procedures of the Bureau do not allow for inter-party indemnification.
Secondly, one of the Providers, XXXX Financial Services Ltd. has submitted that this entity (which is regulated) was not the entity (within the XXXX Group) which either promoted or sold the product the subject matter of this complaint. It appears on the balance of probabilities that an unregulated entity was most likely involved however that issue is not at this time finally determined. Should it be the case however that an unregulated entity is involved then the Bureau would have no jurisdiction to investigate the conduct of such an unregulated entity. Indeed the position of XXXX is essentially that insofar as it was involved at all, it or one of its partners acted as a conduit only for the exchange of information between the Complainants and one of the other Providers, Liberty Asset Management and that it did so due to a family relationship between that partner of XXXX and the Complainants.
Whilst this issue cannot be determinative as to jurisdiction it is a relevant factor since if further investigation revealed that an unregulated entity was involved that would compromise the entire investigation due to the inter-twined nature of the investment. Only a court would have jurisdiction to investigation both regulated and unregulated entities.
The FSO cannot investigate the conduct of non-regulated entities. In addition the FSO does not have powers to compel third parties to a complaint either to engage with the investigation or to produce evidence to be considered in the investigation no matter how relevant such engagement or evidence may be to an investigation.
In all the circumstances, I am of the view that an investigation and adjudication as to issues alleged in the complaint are more appropriate for a court of law having regard to the nature of the issues to be determined, the parties required to be involved, the sums of money involved, the remedies sought and where non-regulated entities can, if required and approprirate, be made party to the proceedings. Court proceedings will ensure that the full range of the rules and procedures of court are available to the parties, including third-party procedures, cross-party indemnification, discovery, subpoena of witnesses and so forth. The Bureau is not established for and does not have the powers to deal with cases of that nature.
Under Section 57BX(2) of the Central bank and Financial Services Authority of Ireland Act, 2004 the Financial Services Ombudsman has sole responsibility for deciding whether a complaint is within his jurisdiction. Section 57BZ of that Act provides:
(1) Without limiting section 57BY, the Financial Services Ombudsman can decide not to investigate a complaint, or to discontinue an investigation of a complaint, on the ground that 
(a) There is or was available to the complainant an alternative and satisfactory	
means of redress in relation to the conduct complained of
Accordingly, for the reasons set out above, the FSO has decided not to investigate this complaint. This decision was arrived at following a full and thorough review of the file and submissions.
I must emphasise for the avoidance of doubt, that no determination in respect of any of the allegations made or indeed on any aspect of the substantive complaint itself is being made. A determination as to the jurisdiction of the Bureau to investigate the complaint only in being made.


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## kmon5454 (17 Jun 2013)

Ulster Bank are now threatening default letters and recovery proceedings. Any advise? Is it worth getting a solicitor?


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