The art of getting a £7,600 refund after being passed over by Smith & Partner Limited? Ask TONY HETHERINGTON to investigate
Tony Hetherington is the Financial Mail on Sunday’s investigator, battling readers’ corners, exposing the truth behind closed doors and winning victories for those who have been left behind. Find out how to contact him below.
Ms MH writes: I bought some artwork from Smith & Partner Limited last August, and later bought two more pieces.
I was naive and thought it was a good investment due to the good sales pitch. Since then, I have not stopped being pushed back. He never sends emails, only calls saying he has “good news”.
Over time, I realized how much trash I had been fed. I asked for the work to be resold, but I get pushed back all the time.
‘Naïve’: Reader bought Lion & The Witch from Smith & Partner, run by Luke Sparkes (inset)
Tony Hetherington responds: You contacted me following my December 11 report that an elderly investor had pumped £17,000 into limited edition prints sold by Smith & Partner, after learning that his first purchase had soared in value and made a profit of £3,000 in a matter of weeks. I asked the owner of the art company, Luke Sparkes, for details about this amazing piece of art. He didn’t respond, but I’m happy to add that he just paid off the elderly investor in full.
One of the attractions of the program is that Sparkes advertises that its investors can earn “potential returns of up to 64.6% in just 12 months.” I questioned that, and Sparkes told me that such a profit had been made once, in 2017, when the company was just starting up and before he took over. If there had been a repeat performance – or bigger profit – since then, I think he would have been keen to point that out.
I also asked Sparkes about the financial situation of his company. The latest accounts from Companies House show that she is in serious trouble with the tax authorities. I asked Sparkes about this twice before last month’s report, but he didn’t respond.
He now says the dispute has been settled, although the numbers are unclear. Similarly, accounts show Sparkes himself borrowed £459,038 from the firm. I asked if he had since refunded that, but Sparkes didn’t answer.
When I pressed him about your own investments, Sparkes said, “Please note that I have shared supporting evidence with you to the extent that we are authorized to do so.” He added that he would be happy to share further evidence “if he had permission”.
Well, last Monday, I gave Sparkes your signed, legally binding permission to discuss your complaint freely and release any documents or other records regarding Smith & Partner’s dealings with you, including its sales pitch. And last Tuesday, he refused.
There are many question marks hanging over this scheme. Smith & Partner advertises its “extensive expertise in the art investment market”, but won’t say exactly who has this extensive expertise and where it got it.
Prints produced by a separate company controlled by Sparkes are marketed by its telephone sales force based near the Shard building in London, but investors are bound by written terms. Are these read to them during sales calls? How can they be bound by conditions they haven’t seen? I asked, but Sparkes offered no explanation.
Despite all this, I can point out two positive points. Sparkes admitted that his company’s advertising included incorrect advice about tax due on profits made by investors. He fixes that. And the other good news? You purchased prints for £7,651, which Smith & Partner says are stored in a warehouse in Switzerland. By the time you read this, you will have received a full refund.
WE’RE WATCHING YOU
Fraudster Michael Nascimento
Fraudster Michael Nascimento – who was exposed by The Mail on Sunday as early as 2011 – has been sentenced to spend nearly four more years in jail for failing to compensate victims of his £2.8million investment scam .
The extra time comes on top of an existing 11-year sentence handed down in 2018.
Nascimento and his gang set up a fake investment company, Morgan Forbes (UK) Limited, and used high-pressure phone calls to persuade investors to buy shares in a scheme to develop a seaside resort on the Madeira Island. They were promised guaranteed returns of between 125 and 228%.
But the Financial Conduct Authority discovered that the money collected had been used to pay fraud handling fees and to fund Nascimento’s lifestyle.
In 2021 he was ordered to repay £976,511 but handed over less than half.
The fraud began in 2010, and in 2011 I warned that Nascimento’s company was breaking the law simply by selling shares without authorization from the financial watchdog.
No action was taken, and I repeated the warning in 2012 when Nascimento struck a deal to allow an offshore sales company to take over the marketing of his failed stocks.
The fraud continued until 2014 and the CAF lawsuits went to court in 2018.
Last April, FCA bowed out to Nascimento. Twelve years after he began operating his illegal investment business, the FCA banned him from the financial services industry.
That will teach him.
If you believe you have been the victim of financial wrongdoing, write to Tony Hetherington at the Financial Mail, 2 Derry Street, London W8 5TS or email tony.hetherington@mailonsunday.co.uk. Due to the high volume of inquiries, no personal response can be given. Please only send copies of original documents, which we regret cannot return.
