As reported, concern in the UK and offshore financial services industry over Harlequin, an Essex-based concern that has marketed off-plan luxury resort properties in the Caribbean and other locations to investors, has been growing in recent weeks, after the Financial Services Authority issued an alert on the company in January, and last week contacted providers of self-invested personal pensions (SIPPs), asking them to say whether they have any clients invested in the firm.
Harlequin, the FSA noted in its alert in January, is “not regulated by the FSA”.
In a statement on its website, dated yesterday, the SFO asks those who “have invested in Harlequin schemes” to provide “any information you can give us”.
“We are particularly interested in hearing from people who invested in the following resorts: Buccament Bay in St Vincent & the Grenadines; Merricks in Barbados; Marquis Estate in St Lucia; the Hideaway in the Dominican Republic; Las Canas in the Dominican Republic; Two Rivers in the Dominican Republic, and Garapua Beach Resort in Brazil,” the SFO statement adds.
It urges anyone who has invested in "one of these or indeed any other Harlequin schemes” to complete an online questionnaire, an online link to which it provides.
Among the questions asked in the questionnaire are "How did you become aware of Harlequin’s investments? Were you introduced by a financial adviser? (Tell us when and by whom.)" Also, "Please provide the details of all sales persons, marketing agents or financial advisers that were involved in your Harlequin investment…what role did they play in informing your decision to invest?"
The SFO statement does not say why the office is conducting the investigation, and notes that it generally does not comment on investigations, although it “may from time to time issue updates in general terms”.
Concern over use in SIPPs
The FSA’s interest in Harlequin stems from concerns that some SIPP providers may have unwittingly allowed investments in the company’s properties to be included in clients’ SIPP portfolios.
SIPPs are a popular investment format among Britons, and many keep their SIPPs intact when they move abroad, particularly if they intend to return to the UK one day.
The problem for investors with properties like Harlequin’s in their pension portfolios, pension experts say, is that if problems arise they may not be easily sold at the price the investor is expecting, should the pension need to be liquidated.
The FSA’s action has, therefore, revived talk among pension scheme administrators and advisers about the appropriateness of certain types of investments for pension schemes.
David Ames, who heads up Harlequin, could not immediately be reached for comment today, nor could the company’s spokesman, Neil Outram. However, in a statement earlier this week, Harlequin said it had not been contacted by the SFO as part of any investigation, and that it could see “no reason why the SFO would or should be looking at the company”.
“However, in the event that the SFO wishes to discuss these matters with Harlequin, Harlequin will be very happy to do so,” it added.
The company said it regarded the FSA request for information as “merely a fact finding exercise by the FSA to determine the level of investment in Harlequin, which is a typical approach taken by the FSA across many products and is no reflection” on the company.
As for the FSA Alert in January, the statement noted that there were many different types of FSA alerts, and that this one was not of the type to flag up “concern about a particular investment” but rather, was intended to “remind IFAs of their duty to undertake due diligence and advise clients accordingly”.
