Dolphin Trust Compensation Claim
In the case that you have invested money in an overseas property development scheme such as the Dolphin Trust and have not received the returns you were promised, you may be entitled to compensation.
Dave Coleman, Managing Partner at Coleman Legal previously advised the Sunday Business Post about the dangers of unregulated investment products in Ireland. (Click Here)
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Compensation Claim for Miss-Selling of Dolphin Trust Investments
Coleman Legal is assisting investor clients dealing with the Dolphin Trust insolvency now known as German Property Group.
Our experienced Professional Negligence Solicitors at Coleman Legal are available to discuss the options available to the investors of the Dolphin Trust. If you invested in Dolphin Trust and have yet to receive your promised returns, please fill out this online form.
Coleman Legal is representing several Irish investors in Dolphin Trust. The firm’s managing partner Dave Coleman was asked by Prime Time to shed light on the situation
Grim Extent of Dolphin Trust Fiasco Laid Bare
The devastating impact on Irish investors of the collapse of Dolphin Trust is becoming increasingly apparent.
Over 1,800 Irish people placed significant proportions of their savings—and often their pension pots—in the unregulated investment products offered by this failed German property company (since renamed “German Property Group”). The business now owes approximately €1.2 billion to investors worldwide, including up to €200 million to Irish investors. German prosecutors are currently conducting an investigation into possible criminal wrongdoing at the firm.
John Martin Shek is one Irish victim of this debacle. Speaking to RTÉ’s Prime Time, he outlined how, guided by his financial advisor, he was enticed by the 13% return over a period of five years which Dolphin Trust offered to place 70% of his savings with the company. He considered that this rate of return compared very favorably with the low-interest rates available on bank deposits. He was told these high returns were to be obtained by the purchase of old buildings in Germany and their development into apartments. But Mr Shek has said to Prime Time he now believes his money is “more or less gone”.
Another Irish investor in his 60s spoke anonymously of how he had lost almost €1 million, or 85% of his pension fund, and of the great personal toll this had taken on him. He recalled how he had been assured that his investments were backed by good security in the form of the German buildings purchased by Dolphin Trust.
But Justus von Buchwaldt, who is overseeing the company’s insolvency in Germany, has estimated that the combined value of all these properties adds up to only around 10% of its debts to investors, and has described hopeful estimates of the extent of securities available to Irish investors as unrealistic. One site connected to Irish investors was valued at €30 million by Dolphin Trust—but at a mere €5.6 million by independent valuers. Myles Kirby, the Irish liquidator of one of Dolphin Trust’s Irish special purpose vehicles, has warned of a very considerable shortfall for investors.
Coleman Legal is representing several Irish investors in Dolphin Trust. The firm’s managing partner Dave Coleman was asked by Prime Time to shed light on the situation. Mr. Coleman described the Irish investors as having been sold the “sizzle in the sausage”. He observed: “It was all about the German property market—strong company, strong economy, and a proven track record.”
Noting that many of those who have been badly affected are approaching retirement age, he went on:
“They don’t have the years left to earn more. So taking the money in the manner that it was done was, before we even get into where it went, to our minds totally wrong.”
Mr. Coleman emphasised the role which financial advisors played in selling Dolphin Trust products to their clients, pointing to these advisors’ “huge incentive” to sell the products in light of the high commissions they received for doing so.
Many of the Irish investors were not informed by their financial advisors that the type of investment product offered by Dolphin Trust—the “loan note”—is unregulated. This means that investors lack the protections associated with regulated financial products, such as access to the State’s investor compensation scheme. This is despite the fact that these unregulated products are sold by regulated financial advisors. Mr. Coleman stated that if the Central Bank had been regulating these products, the disaster “would never have happened” since the Central Bank would have been keen to ensure that investors did not need to resort to the compensation scheme.
For its part, the Central Bank has stated that, while regulated financial firms are permitted in principle to sell unregulated products, such products must be clearly distinguished from regulated activities. They must be grouped in a separate section on financial advisors’ websites.
The Dolphin Trust affair continues to attract adverse attention and comment from many quarters: the firm has been described in the German insolvency courts as a “pyramid scheme”; the Irish Pensions Authority is now investigating the collapse, and the matter was recently raised during the course of debates in Dáil Éireann.
But it may be several years before we see the end of this failed firm’s insolvency process—and indeed little may come even of that. For now, one thing is clear: the innocent investors at the centre of it all still remain bereft of their savings.
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Dolphin Trust Compensation Claim –Recent Updates
How We Can Help ?
Coleman Legal is currently assisting investors involved in this investment scheme to explore their legal options. Our dedicated team has extensive experience in claims relating to professional negligence across a range of industries and we are ready to advise and assist you with your case.
If you believe you have been mis-sold a financial product and suffered financial losses arising from negligent advice, please contact our Professional Negligence Team today at Coleman Legal to discuss if you have a potential legal action.