Financial adviser tells fraud trial he lost £2m of his own

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Christopher Paul Byrne denies 20 charges related to misleading his clients about the fund, which collapsed in the summer of 2016, losing investors over £2.7 million.

Mr Byrne told the court that when he sold clients Providence funds – which were said to be involved in Brazilian debt factoring – he did not believe they were unsuitable for smaller investors.

Cross-examining the 50-year-old former managing director of now defunct Lumiere Wealth, Crown Advocate Simon Thomas asked him about details of the Providence scheme – referred to in court as particulars – which stated it was a high-risk product and investors must be prepared to lose their entire investment.

Mr Byrne said he did not remember expressly talking about that with clients.

Advocate Thomas said he should have communicated the warnings in the particulars, but Mr Byrne replied: ‘You keep harping on about the particulars. You talk to me as if I know it by heart. I read it in 2014. I scanned it. I am not an expert in the scheme particulars.’

Mr Byrne said he and a colleague agreed to consider the fund medium risk.

‘I satisfied myself by going to Brazil and speaking to a number of people from Providence and asking them questions. That is how I came to that conclusion,’ he said.

Advocate Thomas asked Mr Byrne about an agreement he made with Providence’s principal, Antonio Buzaneli, as the fund became the major shareholder in his new company Lumiere and set out targets for how Mr Byrne would be paid in shares and bonuses based on how much money he brought to the fund.

Earlier in the trial a forensic accountant gave evidence that Mr Byrne was on track to earn £1.5 million in 2016 based on his complex pay structures with Providence and other earnings.

But Mr Byrne said yesterday he did not believe his agreements with Providence were conflicts of interest or that they should have been disclosed to clients.

‘I admit that I did not tell my full remuneration to clients,’ he said. ‘It just did not occur to me to tell them.’

And while he said Mr Buzaneli kept pressure on Lumiere to keep funds flowing into the ‘pipeline’, he said he did not feel compelled to sell Providence and considered himself independent.

Text records showed he did advise Mr Buzaneli as soon as early investments were made – including a £600,000 investment from a 79-year-old woman and her husband, which was made before Mr Byrne was authorised to give investment advice through Lumiere.

Mr Byrne said he was acting only as an ‘introducer’ at that time, although he did not tell the investor that.

The advice he gave to clients was what he believed at the time, he told the court.

‘I would not have touched Providence if knew it was a fraud,’ he said. ‘I would not have lost £2 million of my own money. I would not have put clients in the fund and friends and my parents in the fund.’

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