The move from Viridian and CFS to provide personal advice in a scaled manner highlights a growing willingness within the industry to fix its own problems in lieu of waiting for the government.
Private markets are worth around $14 trillion globally, ASIC believes. It’s not sure, and that uncertainty hints at the wider problem – private markets, and their effect on public ones, is still largely a mystery.
PIMCO caught in fake bond scam
PIMCO Australia last night (February 22) warned advisers nationally that its name had been used in bond scams which ASIC uncovered in January. They are “raising millions of dollars”, ASIC said.
The scam, targeting Australian investors, involves an offer of unrealistically high returns on the supposed investment in bonds, which the big manager says are fake.
In its note to advisers about 7.30pm AEDT, PIMCO Australia said: “We have recently learnt that PIMCO’s name has been used in such a scam, with individuals purporting to be from PIMCO promoting a false website and a professional-looking counterfeit prospectus, to induce individuals to invest in a non-existent PIMCO bond product.
“We are warning investors that this activity is completely unaffiliated with PIMCO,” the notice says.
“We wanted to alert you to this as a precautionary measure and to ensure you are in the best position to protect your clients should they be contacted as part of this scam.”
The notice refers advisers to the company’s website (click here) on which the same information is posted. PIMCO “strongly advises” that anyone contacted by persons who you don’t recognise, you should not take any action and, in particular, not share any personal information, including bank details.
“If you believe you are a victim of this scam, you can also report the scam to a government agency (such as Scamwatch.gov.au) to help them identify the scammer and prevent the scam from spreading.”
On January 28, ASIC posted its warning about the bond scam, with at least two operators involved, targeting Australians from the UK and elsewhere.
ASIC said: “In many circumstances, the scam occurs after the investor completes an online enquiry form expressing interest in receiving investment advice, often via a third party or comparison site.”
Karen Chester, ASIC’s acting chair Karen Chester urged investors at the time to be wary of claims that are ‘too good to be true’. “Interest rates globally are currently extremely low and expected to remain so for some time. If you see or receive offers of high yield bonds, they are either high-risk or they may simply be bogus and a scam,” she said.
“Investors searching for income-generating investments are at risk of being duped into buying these imposter bonds. Any prospectus offering incredible returns in the today’s economic environment is likely to be just that: incredible. ASIC warns investors to be sceptical and make proper inquiries before investing. These bogus bond funds are raising not thousands, but millions of dollars from Australian investors.”
– Greg Bright
