St James's Place, the wealth management business founded by City grandees Sir Mark Weinberg and Lord Rothschild, is being pursued for more than £600,000 in compensation by its client Kevin Westenberg, a show business photographer whose subjects include Tom Jones, Bono and Paddy McAloon of Prefab Sprout.
Westenberg has emerged as one of the biggest losers from a scandal that hit the financial firm this year, when 31 clients collectively lost millions of pounds in savings after a senior partner at St James's Place, Peter Carron, advised them to invest in his own projects. Many clients were under the false impression that the deals, which proved worthless, had the backing of St James's Place. The firm has agreed to compensate about 25 of the victims, but Westenberg has been refused a payout by the firm, which is 60%-owned by Lloyds Banking Group.
He said: "I approached St James's Place to manage my life savings because of the high reputation I believed it had. I was told, by one of its senior partners, that he was an adviser to, among others, the royal family, the Russian prime minister Vladimir Putin and the Gallagher brothers [from the rock band Oasis] and I was in the best hands … I trusted him fully and believed him when he said my investment was 'as safe as houses'. Clearly, that was not the case. I am considering all possible avenues to ensure I recover my life savings."
Having successfully invested in an independent Carron scheme in 2005, Westenberg put £630,000 in 2009 into a start-up firm called Comment Technologies, where Carron was chairman (though he worked for St James's Place until 2010). About £445,000 of Westenberg's investment was made after Carron advised his client to surrender a St James's Place bond and transfer the money to Comment.
It is thought St James's Place has compensated about 10 clients in full, while a further 10 received up to 60% of losses and another five negotiated a settlement. About six others have been offered nothing, implying the firm believes it can prove they knew the Carron investments were independent of St James's Place. Read more...