Bob’s Weekly Update

Dear Bondholders

FSCS
Last week we had the ‘hot news’ that the FOS v Catalyst case had moved up a notch. This week we have the various reports that The Financial Services Compensation Scheme (FSCS) is to review it’s decision to reject claims by former clients of Rockingham Retirement. In February the FSCS said, that while Rockingham “may potentially have given bad advice on ARM investments, the advice was not the cause of investors losses”, rather it had taken the view that any losses suffered by investors in ARM products, had been caused by ARM’s failure to gain authorisation from the Luxembourg regulator, the CSSF. Although it must be said, that the FSCS partly back tracked on this, after, no doubt, receiving an irate phone call from Luxembourg.

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FSCS to review rejected Rockingham claims

Advisers could face greater impact on FSCS bills as scheme U-turns on initial Rockingham decision.
By Nick Reeve | Published Jun 24, 2013 | FTAdviser

The FSCS is to review a series of claims it had previously rejected relating to the collapsed adviser firm Rockingham Independent.
The compensation scheme started compensating former clients of Rockingham earlier this year, but in March it said it would not be paying out to investors in the ARM Asset Backed Securities life settlements fund, which has been suspended from trading since the summer of 2011.

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STOP PRESS!

STOP PRESS!
Added Saturday 22 June.  Last evening after this Update was posted we were notified that the much anticipated final signed copy of the UK legal opinion has arrived!  This runs to some 22 pages which I’m certain will be under review by those on the small circulation list this weekend.

Bob’s Weekly Update

Dear Bondholders,

Catalyst
Save for the news that yet another Regulator ‘The Care Quality Commission’ has failed to protect those to whom it owes a duty of care, and conspired to cover up it’s failures, the hottest news this week has come from the The Financial Ombudsman Service.
We are told the FOS is to make a decision on up to 150 complaints made against ARM life settlement fund distributor Catalyst Investment Group, after a period of consideration lasting several months.

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The Shambles that is Regulators, and Regulation

Dear Bondholders

Some eighteen months ago I wrote about my suspicions that the real people to blame for the situation we were finding ourselves in, was not the IFA’s who sold us the  ARM bonds, such as Rockingham. Neither was it Catalyst who marketed the bonds, nor ARM itself who were the main designers of the SLS bonds we invested in. I was always convinced that the problems stemmed from the Regulators themselves.

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Catalyst faces 150 claims as FOS floodgates open

Catalyst faces 150 claims as FOS floodgates open

by William Robins on Jun 18, 2013 at 07:31| CitiWire

The Financial Ombudsman Service (FOS) is to make a decision on up to 150 complaints made against ARM life settlement fund distributor Catalyst Investment Group after an eight-month delay.
Last October a FOS adjudicator ruled against Catalyst in a claim on the basis that it had not provided the client’s IFA with marketing materials that were fair, clear and not misleading.

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Bob’s Weekly Update (NEW)

Dear Bondholders

The reason why you invested in ARM bonds
Hard on the heels of the news that investors in Keydata can look forward to the return of circa 14% of their capital by 2014, (A fate that the Steering Committee fear will overtake ARM investors unless we get a successful reconstruction.) There arrives a well researched and independent document based on a study of $24b of net face value policies, entitled:

Empirical Investigation of Life Settlements: The Secondary Market
for Life Insurance Policies*
Afonso V. Januario† Narayan Y. Naik‡

Ian Ward will have placed this document on the website for those who wish to read it, which although it is 45 pages long, and obviously written mainly for US readers, we recommend you do at least read the opening pages.  We particularly recommend that it is read in full by the Treasury Sub committee, MPs, the FCA , the FSCS, the MFSA and the CSSF.  If it had been written for us, I would venture that it might better have been entitled ‘The reason why you invested in ARM bonds’. It’s origins are I believe, that in April 2011, ‘Life Expectancy Providers’, a group of major underwriting firms, released a document describing best practices.This is the updated current version dated  June 10, 2013

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Empirical Investigation of Life Settlements: The Secondary Market for Life Insurance Policies*

Dear Bondholder

In recent years, a secondary market for life insurance policies, known as the life settlement market, has developed in the United States. This market enables policy owners wishing to discontinue their life insurance policies to realise the market value of their policies. Using a comprehensive dataset from a single large market participant of 9,002 policies insuring 7,164 individuals with an aggregate net death benefit of $24.14 billion purchased as life settlements from their original owners between 2001 and 2011 across 50 different U.S. states, we answer two important questions. First, to what extent did the presence of the secondary market make the policy owners wishing to sell their policies better off? Second, what rates of return could investors purchasing these policies have expected to make, given the life expectancy estimates of the insureds, optimised cash flow projections over time and other policy characteristics?

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