John Burford is a financial adviser who appears well informed. He invites investors to participate in his Tramline Traders funds.
I invested £7,000 and he promised to buy and sell shares using his trading system, collecting a bonus for any increase in fund value.
However, he says he has closed down the funds, and that the Financial Conduct Authority has taken control of them. J.I.
Tony Hetherington replies: John Burford is an extraordinary character. He has a PhD in physics and worked at Nasa in the US as part of the project to land men on Mars.
Realising that the project would not succeed in his lifetime, he says, he switched his mathematical brain to studying investments and joined a broking firm in California.
Now this 84-year-old financial adviser lives and works in Mansfield in Nottinghamshire, where he owns Financial Trading Strategies Limited, which operates his Tramline Traders funds.
Investors can pay £995 a year to join his VIP Traders Club, or £595 to get an alert when he spots a promising stock market opportunity.
But there is one pretty big fly in John Burford’s ointment, which is that he has absolutely no authority from the FCA to operate any kind of investment scheme or to market tips to the public. In short, he is operating illegally.
Last December the FCA added Burford’s company to its warning list, saying: ‘This is an unauthorised firm that may be providing financial services or products in the UK without our permission.’
Investors lose the protection of the official FSCS compensation scheme, and cannot complain to the Financial Ombudsman.
In January, Burford told his clients: ‘It is with immense regret that I must report to you that from circumstances beyond my control, I have closed down the Tramline funds.’
He did not mention the FCA, but in April he announced: ‘Unfortunately, the investment funds that you paid into remain frozen by the Restraint Order obtained by the FCA, as do all of my assets.’
But here’s a funny thing. When you contacted the FCA, a supervisor told you: ‘I can confirm to you that we did not place any restraint order on the fund.’
And here’s an even funnier thing. Despite saying his assets were frozen, Burford announced he had made a ‘massive profit’ by speculating in oil.
On the other hand, several weeks ago he messaged investors, saying: ‘I completely regret making large trading losses for you.’
I questioned Burford about this, but all he told me was: ‘I can confirm the FCA are investigating me and my company.’
So what does the FCA itself say? Well, very little. Its secrecy shutters came down and a spokesman refused to confirm or deny it has frozen any funds or assets.
In fact, I can report that the FCA has set up Operation Winona to investigate Burford and his funds. I know the names of at least three of the investigators, but I’m restraining myself from publishing them in case they need anonymity in other cases.
However, the FCA should make no mistake. There are questions that need answering. How long have they known about Burford’s funds? How much is at risk? Where is the money?
But perhaps above all, why have they not stopped him?
Burford’s website tramline traders.com is still live, still inviting new members to sign up and pay up, and still reporting profitable deals. What is the point of the FCA denouncing Tramline Traders as illegal but then failing to shut it down, backed by a High Court injunction if necessary?
As financial services professionals keep telling me, the FCA and its 5,000 employees are wonderful at demanding statistics, publishing reports on diversity, and looking at closing stable doors after horses have cantered into the distance, but no good at all at reacting to a current, active danger to consumers.
Perhaps this is the big truth that the FCA’s secrecy is really there to protect.
You have told me that you are willing to coordinate legal action to recover what funds you can from Burford. I will gladly forward to you the details of any of his investors who contact me.
