The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Trouble - I'm really not going to explain this again. Unless you're some kind of conspiracy theorist, Lombards, a major institution with billions under management, has neither the motivation nor the inclination to whitewash a simple, relatively small compliance issue. They are not 'investigating themselves' (spectacularly dopey thing to constantly claim as if it were self-evident when it is precisely the opposite); the Firm would simply be performing a routine compliance investigation into of one or 2 fund managers, at one fund among dozens, who is/are accused of serious, but by no means shockingly unique, malpractice. The relevant comms would be examined, the professionals involved interviewed, and swift action(s) would NECESSARILY be taken if appropriate, very much including dismissal which would be swift. The risks to LOAM of doing any less, both reputational (ie., investors don't need any more excuses these days beyond high fees and perennial underperformance to withdraw funds from traditional fund managers. An investigation of accusations such as Tariq's that is seen to have been slow-walked is an almost automatic catalyst for more withdrawals) and much more importantly, with the regulators, is way too high to risk being cute in a case like this. There is nothing to gain and much to lose for the Firm and that's why the fact that nothing seems to have happened to any LOAM professional thus far is such strong circumstantial evidence against Tariq's central accusation(s). Pete - I never claimed otherwise and in fact that is my view too. Obviously the Company seems to feel differently so that's why I wrote it the way I did.
Aside from high performance exclamation point-abuse, that post has little to recommend it. Firstly, 'low level shorting' is not a thing. In stock markets anyway. And where's the evidence that buyers have dried up? Share price continues to be stable/grind higher to my eye.
Monorail - Obviously, I don't think the balance of probability favours an investigation by the FCA, so therefore I don't expect any formal announcement from them, while effectively LOAM have already 'announced' their findings in that their lawyers' response letter to Tariq's charges was extremely robust and thus contains the strong imputation that they've conducted a thorough internal investigation and found nothing (btw, I haven't mentioned this, but that investigation would not have just focused on the tape of 'the call'. It would invariably have involved LOAM compliance reviewing any and all relevant communications - telephonic, electronic, etc - over a long period of time between the fund manager(s) and NANO). As for Tariq and co., everything depends on whether and when the Board agrees to their request for an EGM. Stay tuned I guess.....
So that no one here is in any doubt, what this rounding error of a poster is babbling with that word salad might at times have some tangential connection to spread bet trading in Vodaphone or some other megacap, but absolutely sweet fa to do with trading in San Leon. Anyone, anywhere who tried to log onto to any spread bet platform to try and put a short 'bet' on in a name like sle recently in any size above molecular scale, would have been immediately refused and then required to call a real human being at the spread bet broker who would explain that either such a trade is likely just outright rejected, or - a tiny possibility if the client is important enough - a stock borrow would be required to initiate the trade. And since Tosca + management have a massive super-majority of the shares locked up and very much un-borrowable, good luck to afake's mystery short seller(s) finding enough shares to borrow in order to put on a position of more than a couple thousand quid short (I don't know, perhaps that impresses some down the pub). Sure, the odd IG or PLUS 500 may have a client or 2 who are already long San Leon that they might considering 'netting' against a new short position, but even then they would probably require sourcing an adequate borrow as SLE is too volatile and too event-driven and, at the moment anyway, too illiquid, for the risk models of any of the spread betting firms to even consider accepting. In other words, what all that serves to demonstrate, is that the idea of some kind of huge bet against SLE shares, somehow hidden on the books of spread betting firms put on by punters who are simply allowed to 'bet' against the share price, is the fantasy concoction of the type of person who thinks its funny to troll a Nigerian-based company by creating an avatar that 'speaks' in pidjun English. Bottom line, trying to short San Leon at a spread bettor versus a traditional broker is effectively, a distinction without a difference.
Ddubya - I'll have one last go with this and then I think we should let it rest. Arguably, the single most important piece of physical evidence, as it were, was the existence of the phone call between LOAM fund manager(s), Griffiths and nano management the night before the morning after, on which he then SPECULATES as to extremely inappropriate information exchanged. I've explained 3 times now that, so long as everyone acknowledges that a call took place and that call was recorded, then the fact that no one has yet been fired at Lombards is de-facto proof that there was in fact NOTHING unethical on that call. And this is NOT about protecting a 'naughty' employee or some other kind of cynical take. Tariq has made among the most serious of allegations one can allege against a fund manager in his original letter. If there had been absolutely anything approaching such content on that call, the fund manager(s) involved would have been immediately sacked, no ifs, ands, or buts. Since they were not, then all of us can safely assume that this cornerstone of Tariq's argument contains no such evidence. Period. I'm not saying that that precludes the FCA from investigating as well, but I am saying that because nothing has come out of Lombards even after all this time, the likelihood of a higher regulatory body investigating at all - and of finding anything damning if they do - has already diminished (btw, shareholders should also be aware that Hamoodi's accusations were so serious - bordering on conspiracy to commit fraud perpetrated by the fund managers and the board of nano - that by some pros' estimation, we should be more likely looking at an investigation by the SFO rather than the FCA by now. If that sounds a bit over the top, I agree, and it is further indication that Tariq overplayed his hand and why he had to take down his original letter from the LSE website. Remember that?).
Maxi no offence, truly, but I do really wish people here would read more carefully. Most importantly, neither of those issues are the least bit relevant to my argument. On the Company coming after Tariq for defamation, I only mentioned that as a means of comparison to illustrate how unlikely he is to be successful in his activism, and as for their forthcoming decision on whether to accept Tariq's demand for an EGM, I clearly stated that I believe they will.
Ddubya - first off, I did not comment directly on the likelihood or progress of any potential FCA investigation, of course. What I did was lay down the clear argument that 1. Lombards absolutely would have conducted its own thorough investigation immediately; 2. the very foundation of that investigation would necessarily have been the infamous 'call'; and 3. the fact that no action has been taken against any relevant LOAM professionals to date is the strongest evidence any of us have so far of the strength (or lack thereof) of Tariq's argument(s). However. if you wish to infer that, by deducing that because LOAM compliance seems to have found nothing, that I am laying the predicate that a higher level investigation by the FCA is (far) less likely, then yes, I will cop to that. In fact, at this point, I think it's almost as likely that the Company will come after Tariq for defamation as it is that any regulatory body will conduct an investigation that results in sanctions against any Lombard or NANO professionals. I'm sorry if this makes me sound like I am aligning with any of the bogus company apologists that infect this and the other board, because I am not. It is simply that, in addition to the reality that mounting such activist efforts as Tariq has in attempting to sanction and/or replace board members, is always a very steep hill to climb to begin with, to my trained eye (and having spoken to a half dozen professional investors with decent holdings in NANO), the fact pattern thus far simply does not support the likelihood of a successful outcome for him at present. Tariq Hamoodi, as I written multiple times now, is a brilliant, successful value investor with an impressive background in 'litigation arbitrage', however the balance of circumstantial evidence to date is that he is in over his head in this attempt at activism. I've said previously that he likely knows that and is actually angling for a board seat for himself or one of his mooted board replacements, but I now think there's too much water under the bridge and that, while an EGM will in fact be called, Tariq's proposal(s) will fail and he will be left having to consider his position. Literally. And that, unfortunately or not, will be that.
Monorail - you are complicating things unnecessarily. The phone call took place; no one on any of the many sides is denying it. Of course, given the seriousness of the accusations, it is very likely that someone from the FCA or the Stock Exchange has already made at least a preliminary enquiry which would doubtless have involved requesting to listen to 'the call', so if there were anything irregular, I am certain we would have heard something by now. However, my argument doesn't rest on that next level of oversight having occurred. Rather, all one needs to do is realise that Lombard itself would have launched its own investigation IMMEDIATELY without delay. The intensity of focus in the City today - among large firms and small - surrounding employee conduct has reached almost obsessive levels. Absolutely anything that could be seen to impact the Firm's reputation is dealt with maximum force and in minimum time. There is not a chance in heck, as soon as Tariq's accusations became public, that Lombards would not have immediately initiated a high-level review, which would have included hauling the fund manager(s) in front of a Compliance board for a full explanation of his/her version of events and of course, a thorough review of 'the call'. Unless you share some of the more fevered conspiracy theories promoted by some shareholders on these message boards (and Tariq tbf), there is simply no way that the fund manager(s) involved would not have been summarily sacked if there was anything damning captured on the recording. Almost as likely, it would have then been followed by an announcement by LOAM that it had conducted an investigation which had resulted in immediate disciplinary action(s) on the people involved and that the Firm was now co-operating with the relevant regulator. I appreciate that my argument is syllogistic, but my premises are pretty rock solid, so I fancy my conclusion is equally so. Now 'the call' is not the only 'evidence' Tariq bases his speculative argument on (let's be fair: he does do a fair bit of speculating generally and outright 'informed' guesswork as well), but it is a pretty foundational one. From there, the rest of his thesis does seem to get noticeably shakier.
That is of course, an entirely different issue, K. I agree, it's curious and should be examined, but Griffiths has had a long city career and it would not be at all unusual (or unethical for that matter) for him to have friends who run money at major fund managers and to share ideas with them. It is also true however, that RG does not possess the most unblemished reputation, I admit.
Honestly jbongo, it happens all the time, particularly (exclusively?) when the Fund Manager is under scrutiny and they have to demonstrate they are taking allegations seriously and are conducting a genuine investigation. Besides, I'm not sure the fund manager(s) responsible for the Nano position is/are exactly lighting up the performance charts the last few years!
And I you, kooba. Just a final point of order: Richard Griffiths is not on my radar here whatsoever. I am only referring to LOAM and I am very confident that Lombards being a major city firm will have a 'no mobiles' policy for all professional comms, and altogether probably during business hours in the office (which I'm sure is violated all the time btw, but that's beside the point here). If the fund manager(s) had had a conversation - again, one which he has openly admitted to - with the CEO of one of his bigger holdings - at ANY time of the day - and then could not produce a tape of that conversation, especially in a highly charged situation like this one - he would have been sacked by now, in my opinion.
Kooba - let's not fight unnecessarily on this. Please. Not a question of wisdom or special knowledge. I'm simply trying to articulate a logical conclusion based on what I know of fund management compliance, etc.: I completely accept that there are corrupt people in the fund management business - likely more than in most industries, considering the possible rewards - and they always have and always will continue to take stupid risks in an attempt to game the system and get paid stupid bonuses, etc. However, a couple of other things are even more true: 1. calls between large, dominant shareholders and the management of companies they are invested in, occur all the time, most often without compliance oversight. Perhaps they shouldn't, but they do; 2. if however, ANY of those calls occur on a private phone, like a mobile, and are therefore un-taped, then the fund manager would be subject to dismissal. Therefore, in a case like, with LOAM and the fund manager(s) openly confirming such a critical call took place, then it is very, very likely that protocol was followed and it occurred on a LOAM, taped line and the contents were necessarily uncontroversial. Now of course I don't dismiss the possibility of another, more sinister scenario out of hand, but as we necessarily must deal in balance of probabilities on a board like this, I am sharing what I am confident is the (significantly) most likely run of events.
(con't). As for the whole issue of Turcan, what he knew when he resigned, etc, I am more circumspect. I lean towards disagreeing with your overall view, primarily because it would have been far too dangerous - and amateurishly unprofessional - a move for the LOAM fund manager(s) to risk. But I don't dismiss the possibility altogether.
Kooba - On the issue of the phone call, I covered both contingencies. Since it is uncontested that it happened, it was almost certainly on a taped line and therefore would have of course been reviewed immediately and action would have long since been taken if anything, absolutely anything, unethical or illegal, had been discussed. If it was not on a taped line, as I also wrote, the fund manager would have been summarily dismissed and an investigation launched, both of which would have either been officially announced or would have leaked for sure. It is simply how the fund management business works. No exceptions.
Having said that, if shareholders think Tariq's effort is likely to 'succeed', my view is that they start to disabuse themselves of the notion. As I've written before here and the other board, Tariq Hamoodi is a very smart, very accomplished special situations specialist investor, particularly in litigation-related ones. He invested a material amount of his own money on due diligence in making his Nano investment and has done so again in mounting his current effort to unseat the board. However, this is little more than a windmill tilt, in my view, from a (justifiably) angry large shareholder who unfortunately, is not as expert in activism as he is in litigation situations. The odds against success here are high as getting to 50%+ would be in any situation would be with the largest shareholder likely voting against. In addition, and I can't emphasise this enough: for those who continue to rage about 'secret phone calls' and other intrigue that Tariq alleges: You need to stop and realise that if that phone call had had ANY content related to privileged information, etc, as Tariq has claimed - and so many small shareholders seem to think is not just likely, but somehow already proven (!) - heads at LOAM and the Company would have already rolled and there would have been a full-scale investigation by the FCA or some other reg body immediately announced. And the reason is simple: that conversation - which LOAM and the fund manager(s) involved - have never denied took place - would have been on a taped line and listening to it would have been the very first thing everyone involved - including the regulator - would have done as soon as Tariq's accusations hit. If there were absolutely ANYTHING damaging therefore, the market would have been informed long, long ago (and, btw, if it had occurred for any reason on a non-taped line, there would have been a very similar outcome as LOAM managers would have been immediately fired, etc). I know it's just one of many accusations made by Tariq, but it is a key one, perhaps the most damning and foundational to his case. I'm sorry, but the (lack of) evidence suggests it does not stack up.
PKF are the auditors from the legacy Fox Marble business. Eco are not the first casualty among small cap UK companies of an open secret in the industry: that firms like PKF have severely overbooked business while it remaining understaffed. This has all the hallmarks of such a situation. This is likely wholly on PFK's shoulders and shareholders should not be frightened into thinking otherwise. A couple, three weeks and PFK will have worked through their backlog and we will re-list. No harm, no foul.
More from echoridge on advfn: '.....At the risk of repeating myself, the strongest circumstantial evidence of a large, on-going buyer was yesterday's 1.6m share institutional cross. In what was yet another miserable day for UK small caps, one would have expected a bargain that size to go through at a decent discount to the prevailing bid price. Instead, the seller was able to deal at (near-enough) the mid-price, despite the market conditions and a block of shares some 10x normal dealing size. That's a strong indication that the seller knew they had some leverage in negotiating the price, most probably because they were aware that the buyer has been in the market for some time and would likely remain ongoing even after buying the 1.6m share block.....'