At the turn of the year I reviewed Global Edge’s bonds paying 21% per year for investment in their betting algorithm.
Global Edge’s bonds claimed to offer “consistent profits regardless of Brexit” and were being promoted in the New Scientist’s newsletter (which is not exclusive to high net worth and sophisticated investors).
It transpires that The Growth Market was also employed to market the bonds. The Growth Market were investigated by the Mirror recently, after the collapse of an unrelated unregulated investment, which found that The Growth Market’s sales reps hid behind fake names while assuring investors that the collapsed investment was 100% safe.
My review noted that Global Edge’s bonds are inherently high risk and that their claim that “Expected compound growth rates in the range of 15% to 25% per month are realistic” is extremely dubious.
Global Edge is headed by serial entrepreneur Iain Stamp. Stamp emailed me on January 24 to complain of unspecified “inaccuracies”. I invited him to detail the inaccuracies, and then heard no more for two and half months.
Stamp then finally emailed me on April 2 with a list of his complaints.
I will not weary readers with most of them because a large section of Stamp’s complaint revolves around my mentioning the fate of Stamp’s previous businesses, Integrity and PPF Capital Source. (See “Who are Global Edge” in the original review.) Stamp’s email was accompanied by character references and letters from 2010 that frankly I couldn’t care less about. They have no bearing on the facts stated in my review – that Integrity was fined £350,000 and censured for misleading information by the Financial Services Authority (now the FCA).
Stamp has stated repeatedly that he was not personally investigated or criticised in his role as Integrity CEO by the FCA, and I have never asserted otherwise. Stamp appears to still harbour bitterness over Integrity’s collapse but that’s his problem and not mine. Stamp also claims that Integrity was not actually fined £350,000, which is simple reality-denial. Integrity’s fine was waived because it was already in liquidation, but a fine waived to protect creditors is still a fine, and the breaches which led to that fine are still breaches.
As for my reference to a Sunday Times article on the fate of Stamp’s business PPF Capital Source, Stamp says he is pursuing a defamation claim against the Sunday Times. We’ll see how that pans out, but for the moment the Sunday Times article remains up, so there is no reason I shouldn’t link to it. I took care to mention Stamp’s side of the story in the original review.
For more of Stamp’s side of the whole story , it’s on his personal website for those who are interested. Let’s move on to the present day.
Who exactly is Global Edge?
My original review noted that Global Edge did not disclose who was in ultimate control of the company. Filings with Companies House for the company behind Global Edge, UK Innovative TI Ltd, stated “The company has identified a registrable person in relation to the company but all the required particulars of that person have not been confirmed” and also that the shares were held by a “Galaxy Funding Foundation”, the details of which are also vague. That remains the case.
Stamp has provided some additional details as to who the ultimate owner is, but his email had “Strictly Private and Confidential” stamped all over it so I’ll refrain from disclosing them. Investors can do their own due diligence.
The Global Edge Bond
Stamp points out that the Global Edge investment literature is full of risk warnings. I have never said otherwise.
My review noted that Global Edge’s website, under a section headed “Investor Comforts”, claimed that an unnamed private equity investment had invested £3,000,000 into Global Edge while valuing the company at £20 million. (Remarkably low for a company holding an algorithm that returns somewhere between 21% per year and 1,355% per year depending on which figure you looked at.)
Stamp confirms that the mention of the private equity investor has now disappeared from Global Edge’s website. Whether their £3 million investment has also disappeared is not known.
Stamp takes issue with my comment “There is no betting algorithm that consistently and scalably generates returns of 21% per year after costs, let alone the 5-25% a month that Global Edge claim. If Global Edge had one they would be quietly turning their own £5 million into a billion-pound fortune, and not dilute their returns by soliciting investment from others”.
Stamp claims in response that many other algorithms generate significantly more than 21% per year.
In support of his claim Stamp cites a couple of people who made money from gambling and then bought football clubs.
Random people striking it lucky from betting and buying football clubs does not mean it is possible to consistently generate returns of 21% per year.
Millions of people all over the UK gamble and it is a statistical certainty that a handful of them will become millionaires.
I have not said that it is impossible for Global Edge to get lucky and make more than 21% per year from gambling. Anyone can make any return over any timescale from betting, if they’re prepared to risk total capital loss; it is possible to make a 100% return in thirty seconds from roulette. However, if I claim that I can consistently make 21% per year after all costs – let alone “realistic” “compound growth rates in the range of 15% to 25% per month” – now we enter the realms of the delusional.
In response to me pointing out that if Global Edge had a magic algorithm that could generate 21% per year, they’d keep it to themselves, Iain Stamp claims that their magic algorithm only works for up to £10 million, due to “liquidity constraints”.
Stamp failed to address the question raised in my review; if it only works up to £10 million, which they’d have in a mere four years if they only managed to generate 21% per year from the £5 million Global Edge claimed to make in beta testing (much much sooner if they generate compound growth of 15 – 25% per month), after which they’ll no longer be able to earn such great returns, why bring that day forward by soliciting external investment?
Fingers in ears
Despite taking two and a half months between his first and second email, Stamp seemed to think I should drop everything to reply, bombarding me with a series of petulant emails and legal threats after I failed to instantly send a reply to his long screed. Because it’s not like we all have anything else on our plate right now.
I replied to Stamp five days later, making many of the points in this article, by way of pointing out that he had not actually identified a single inaccuracy.
Stamp claimed not to have received my reply and continued to send legal threats. I forwarded my reply again, but he again claimed not to have received it. At that point I gave up.
To finish off, he sent me the threat “This is what happened to the last guy who defamed my character.” This was accompanied by a press release from 2010 (yes, we’re back to Integrity), about some guy called David Cottrell who apologised to Stamp for claiming, in an email circulated among a number of Independent Financial Advisers, that Stamp had defrauded clients who invested in Traded Endowment Policies devised by Integrity.
After Stamp took legal action, Cottrell had to read out a public apology in court in which he stated that he had no basis for his allegations, as part of a settlement. Whether Cottrell also had to hand over any money to Stamp in damages or legal costs is not known. Let’s be very clear: Integrity was fined £350,000 over the sale of its Traded Endowment Policies, and censured by the FSA, but Stamp did not commit fraud and won a victory in court against a private individual over that fact.
What this has to do with me I’ve absolutely no idea, as I haven’t accused Stamp of committing fraud.
If Global Edge fails to meet its ROI targets, runs out of money to pay interest on its bonds and collapses, as is an inherent risk, Stamp still won’t have committed fraud. Running a failed investment is not fraud.
Nor do I have any idea why Stamp thinks I’ve harmed his business.
Global Edge’s bonds are only suitable for sophisticated and high net worth investors. All the facts in my review over their inherent risks will already be known to such investors and their advisers. As will be the history of the directors’ previous businesses, as that is part of basic due diligence. Why Stamp thinks my review would be putting them off I haven’t the foggiest.
As ever, if there are any further developments in Stamp’s legal threats we’ll keep you posted…