Did the Au$350m FMIF also become a property Ponzi?

LMIVC has seen accounts analysis strongly suggesting from 2006 the FMIF was also unable to satisfy commitments to investors from core activities deemed as the purpose of the fund. It appears the fund relied heavily on the fluidity created by 'third party loans' to the fund for interest and redemption payments.

Clever semantics have created the impression this sets it apart from the ponzi principle of using new investors monies to pay existing investors returns, but on closer inspection it is seen to be exactly the same. In FMIF's later life third party organisations such as the Commonwealth Bank of Australia and Deutsche Bank were invited to 'invest' in the FMIF on special terms subsequently labelled as 'loans' or 'borrowings' in most reference material. From around 2006 forward s i m i l a r 'loan' monies appear to have created the liquidity for paying existing FMIF investors returns.

LMIM continued to sell FMIF units until 2009 immediately calling into question the accuracy of sales and marketing content and raising the real possibility that LMIM engaged in heavily fraudulent FMIF sales activity from 2006.

What should be of interest to FMIF focused investor groups is the distinct possibility that major institutional organisations could have been complicit in upholding such a scheme for 2 - 3 years AND that an inept and impotent ASIC are therefore again firmly underlined as a part of the problem and still to be recognised as part of the solution.

Further to this article interested visitors may like to read the further investigation of the final years of the FMIF here.