PERSONAL ACCOUNT

A reader lost £100,000 in a ‘Barclays bond’ fraud. So what’s being done?

This case of fraud is alarming because it shows how brilliantly a conman can use the internet to lend credibility to his claims. The victim, a well-informed, experienced, commonsense individual, was cold-called by an investment salesmen.

Of course he was suspicious. Everyone would be. But he decided to listen.

What was being offered was the opportunity to buy corporate bonds issued by Barclays Bank. The bonds paid fixed interest of 7.625pc, and matured in 2022.

The company said to be doing the calling had a highly reputable and familiar name: JO Hambro Capital Management. This is a solid, City of London investment house, wellknown and respected.

JOHCM’s portfolios are often tipped and cited in these pages.

The victim was naturally invited to look up both the firm, JOHCM, and the Barclays bonds in question.

And, of course, both existed, as Google duly showed. The Barclays bonds are indeed a wholly legitimate tranche of IOUs issued by the bank some years ago and quoted on the London Stock Exchange. JOHCM, too, has a splendid website, full of reassuring content, data, history and references to its authorisation and compliance. Exactly what you would expect if you were examining a first-class, regulated financial business. Follow-up phone calls were arranged. On one occasion the caller went by the name of one of JOHCM’s highest-profile fund managers, a leader in his field, and someone whose name proliferates in investment articles online. He has asked for his name not to be repeated in this context. The victim, understandably, was impressed. He had spoken to a market heavyweight. After more online research, and various email exchanges, complete with JOHCM letterhead, he invested the sum of £100,000. That was in late May. I’m sorry to say that the company to whom he gave his money wasn’t JOHCM. And, of course, the money he forked out wasn’t invested in Barclays corporate bonds. The bonds do exist, yes, but like most market-traded bonds paying a fixed rate of interest, their price is far higher today than when they were first issued. The actual return – even if it were possible to buy £100,000 worth of these bonds, which I doubt – is nothing like 7.625pc.

The man’s money was simply stolen, and is almost certainly irretrievably lost.

The victim, who I will not name, is berating himself for not taking greater care and for, in his own words, “being a complete and utter fool”. (I think he should go easy on himself: this was one of the nastiest,

The Barclays bonds are legitimate and real – they are traded on the London Stock Exchange, above – but they were cited as part of an elaborate and plausible fraud