Where can I find international list of trusted Equity Derivates advisors?

I have been contacted by an Equity Derivatives Manager of a Major Japanese Investor company. I have entered into a trade of not published shares which are now sold to a hedge fund. I then found out it was not going to be a direct sale but via a surety bond for which I had to pay down another 20% of the sales value as "guarantee" before the surety bond could come into action and I would get the money back by selling my shares via this surety transaction.

This transaction should have taken place last monday, but then I was informed by the Equity Mgr. that the responsible authoriser of the bond transaction was out for another two weeks... so no money would arrive for another few weeks...

Asking for a copy of the bond transaction leads to no answer, this i "secret". Likewise they will not tell me who the surety provider is, who the hedge fund is I am dealing with... only information I have is the number of shares I have bought, from which company and everything is normally registered  and communicated to me via formal account reporting.

References of the Company and the Eq. Deriv. Mgr are easily retrievable via google, more than 50 publications over the last 6-7 years on Bloomberg and Japanese, Hong Kong and other Asian Financial Info sites.

But in a worst case:  What if my money is not coming back on my bank account, I cannot trade trade the shares normally because they are not in the public domain (yet). Can I make a case in Switzerland against them? Should I make a case in Japan against them? Is there a financial mediating system that can deal with this? Should I put a claim at the financial institute?

Who can give me advise here? So far my interactions have been very good with them, both the company and the Equity Derivatives Mgr. But now we have come in a "cloudy" situation where the money is not coming back, postponed, and postponed etc. ....it would be good for peace of mind to hear whether this is "normal" to have such delay, or whether I should worry because it is not normal to get full clarity in who i am dealing with and via which surety bond provider?

Appreciate any advise

Did you give the asset manager a mandate and power of attorney to manage your assets and make investment decisions for you? If so, I get how they might not make your privy to all their inner workings. Delays are also not particularly unusual, particularly when dealing with illiquid assets like unlisted stocks.

Still that level of intransparency with you as the customer - like not clearly explaining that the investment would be made via a guarantor using a surety bond - does not sound healthy.

If the asset manager is Swiss i.e. is a Swiss subsidy of the Japanese company, then you could appeal to the Swiss financial service ombudsman (FINSOM) if things go pear shaped. Since last year, all asset managers which offer services in Switzerland on a professional level have to be registered with FINSOM. Otherwise I assume you will have to appeal in the country they are domiciled in (Japan?).

Thank you very much for your reply. I will look up whether I have given power of attorney and mandate to manage my assets...

I think this is not the case, He calls me with an opportunity to buy unlisted stocks of which their research department has concluded that the value will increase significantly over time. I buy under promise I also will sell when they tell me to sell, and not wait any longer for further value growth.

The other day I had purchased shares like described before when he called me there was an opportunity to buy more of the shares which would be returned at higher return. 10MM shares in packages of 100'000 would be sold by a Hedger at 1 to buy them back at 3.2 later, he needed short term cash... I had 20'000 in value on another share and was willing to take on another 40, so max 60'000 and for the remaining 40'000 in the package he could find another investor. The deal had happened some 2 weeks later, but then I heard the other partner in the 100K package could not bring up the money leaving me an opportunity to buy the other 40K, no one else could do that because the deal was already closed. I brought in another 40K.

So far so good, but then I was surprised to hear that the share/money transfer would go via a surety bond for which I had to bring up another 20% of the 320K. This I did not know before and I had to go and take a loan to get that money in, which I did...  5 working days later the transaction should take place. another 14 days later the 20% pavement to the surety bond institute would come back.... After these 5 working days, (last monday) I was informed by my contact that the authorized officer, one of the key signatories to sign off on the trade and remittances was out of the office for personal reasons - not back before week week commencing Aug 25th. The process could not be expedited by others, according to my contact, a Head of Equity Derivatives.

My lack of experience makes that my emotions are sometimes overtaking my rational... your further answer can help me to calm down - or start preparing for further measures.

Thanks for your advise

I would wait until the week after the 25th, then demand that the deal is carried out as planned. If you do not get clear answers then, contact the ombudsman. If nothing else they will be able to explain you your rights (or lack thereof).

The asset manager may well be legit, and it is not unusual for a deal to be dependent on one person where private asset managers are concerned.

BUT I would personally avoid using that asset manager's services in the future. The way in which this deal was carried out sounds quite unprofessional. The fact that it was not clearly explained to you that the purchase made use of a surety bond ahead of your investing any money is not acceptable.

It is part of the job of an asset manager to clearly explain all the costs and legalities involved in an investment. It is also their job to maintain your best interests and do their utmost to ensure that you get a return on your investment. That is the entire job description of an asset manager. Getting you into a situation where you are forced to take out a loan at your own expense to pay for a product which you did not know that you needed is not acting in your best interests. Holding your money in limbo when the agreement states you should get it back within 14 days shows poor ethic on their part.

I recommend you avoid making investments that you do not fully understand, unless you have a long track record with a wealth manager and trust them 100%. Even then you should definitely take the time to study the T&Cs of your contract again so you are totally clear what you are agreeing to.

I hope the deal settles as promised and that you make a nice return. For now, don't stress (won't help anything). Maybe call the ombudsman and explain your situation, just to get some feedback and peace of mind.

Thank you very much Antonio, and Karl Weber!  These advises really calmed me down and eventually prepare me for future actions (I hope not, off course)

Well it is not over yet. It now has appeared that the surety Bank (or guarantor) had started an investigation to the 24 shareholders (of which I was one) and they found out one client of the broker was representing for 1.2MM one of the owners of the company. He was therefore rejected but the Buyer insisted that all remaining clients had to come up with evenly shared stocks.. this means I have to pay in another 52'000 before the money comes to me.

Is this normal? Can I ask my money back? Can another client in the deal take my 52'000 part additional? The broker tells me no.  But is he saying it because he wants the money to come from me.... and how do I know there is thereafter not another rabbit coming out of the hat again?  

Where to go for personal advise? I would be willing to pay the advisor/lawyer if the money has returned. Nothing left to give him/her upfront.

Maybe Antonio or KarlWeber can answer once more. I live close to Zürich but the Broker is in Japan.

I would certainly ask for your money back if possible, simply on account of the (many) irregularities. I can't say whether they are fraudulent or not, but it does seem to me that you are in over your head, and I would certainly recommend opting out if that is at all an option.

If you can, just take your money and park it in boring but reputable investments. No return is worth risking all your capital for.

If you cannot pull your money out and quit the deal, you should consider your other options. Investing more money in what could be a fraudulent scheme is, well, just not a good idea.

Some factors to look at are:

• What does the fine print of the contract between you and the wealth manager actually say? Does it make allowances for further capital demands by the wealth manager?
• How did you come into contact with the Japanese wealth manager / broker? If you were referred to it by a Swiss financial services provider (i.e. your bank), then you could lodge a case against that service provider. There have been cases where investors where referred to third-party services by banks and when the third-party services ended up being fraudsters, the ombudsman ruled that the bank was at least in part responsible.
• Does this "well-known" Japanese company have any kind of subsidiary in Switzerland? If so, you should lodge a complaint against that subsidiary with the Swiss Ombudsman. Even if everything is kosher, you could at least have them provide a clear explanation of what is going on and how it ties in with your contract.

Filing a case in Japan may (will) be difficult and expensive, as they don't really have an Ombudsman system. Use any possible options you have here in Switzerland.

I don't know where to find a list of trusted wealth managers, but here are some blacklists:

https://www.onlinethreatalerts.com/article/2017/3/29/a-list-of-fraudulent-investment-or-asset-management-companies-page3/

https://isog.org/fraud-warnings-and-alerts/fraud-warnings-fraud-alerts-p/

Like I said, there may be nothing wrong and maybe the wealth manager has not gone against anything which you agreed to in the contract.

But just the fact that you do not have the spare capital to follow through on the investment and have taken out loans to keep up with their demands is reason enough for me to tell you to exit if that's an option. Whatever returns they promised you through this deal, they aren't worth the stress they are causing you.

Like Antonio said, the job of an asset manager is to handle everything for you in your best interests so that you do not have to deal with stress.

I hope it works out for you