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Michael Johnson: I was never involved with Arch

Michael Johnson

Centre for Policy Studies research fellow Michael Johnson has denied he had a role with Arch Financial Products LLP, following speculation over his links to the company.

Last week, Money Marketing covered a report being compiled by Johnson for the CPS which lays some of the Arch cru misselling blame with the Investment Management Association, due to the fund range being labelled cautious managed.

Since then there has been speculation on the internet over whether Johnson was a non-executive director at the company. According to Companies House, Johnson resigned as a “member” of Arch Financial Planning Products LLP on July 4 2008. Non-executive directorships do not exist for LLPs but only publicly listed companies.

Johnson and Arch both say the entry is the result of signing a document to enable him to carry out research at the company between September 2007 and January 2008. Johnson says once he had completed the research he made it clear he “wanted nothing to do with the company”.

He says: “I spent nine or 10 days there between September 2007 and mid-January 08. I was unpaid and undertaking research, my reason for being there was to find out what Arch was doing. As a requirement of doing that I signed a document which never mentioned being a non-exec director but doing so resulted in this listing.

“I am furious about this, it hurts. You have to ask who the people making these comments are and what are they seeking to achieve by trying to undermine my credibility.”

An Arch Financial Products spokesman says: “Johnson was made a member to enable him to come and do this research and he was termed non-exec because he did not have an executive role at the firm.”

The spokesman says those becoming members of the company do have an opportunity to become a partner, adding that Johnson never took up the position. “He was more interested in his research,” he adds.

Johnson says: “Once I had finished the research and attended an investor presentation I told them I was going to have nothing to do with them. I could not get on with Arch because of its relationship with Cru Investment Management. Communication between the two was pretty poor and that is important.

“I never attended management meetings and they never paid me. This is important because everything I do in the pensions space is un-salaried. I do not want my reputation trashed and that is what this feels like.”


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Unfortunately Mr Johnson seems to have had his name tarnished through association with Arch (like many other professionals).

  2. because my surname is Arch, I have had a few clients phone me and ask if I am connected. Fortunately I am not and never sold any of their products, But it all takes time to put these clients minds at rest. More time wasted due to tohers incompetence.

  3. Hmmmm, more murky waters, this will not end until there is a proper investigation


    Money Laundering and the Financial Services Authority.

    Financial services firms must take their responsibilities on fighting fraud and money laundering seriously or face enforcement action, warns the Financial Services Authority (FSA). Speaking at the FSA Financial Crime Conference 15/11/05, Callum McCarthy, re-iterated the importance the regulator places on the fight against financial crime.

    McCarthy said:

    “The FSA continues to expect firms to take seriously their responsibilities for helping to fight money laundering. FSA supervisors will continue to check firms are doing so and “will use our enforcement powers in appropriate cases if we find evidence of serious failings,” he adds.

    In summary: It is an offence for any person to provide assistance to obtain, conceal, retain or invest the proceeds of crime if that person knows, or suspects that the other person is engaged in criminal conduct. Such assistance is punishable by a maximum of 14-year imprisonment and / or a fine.

    The important point to note is the suspicion of these facts alone imposes upon the Financial Adviser the requirement to report the case to the Reporting Officer and or National Criminal Intelligence Service (NCIS).

    This week we learn that Sir Howard Davies former executive chairman of the Financial Services Authority was blamed by Lord Woof over the £1.5m donations made to the LSE by a charity associated with a son of the Libyan dictator Muammar Gaddafi.

    A report, written by Lord Woolf, former chief justice blames Sir Howard’s (former executive chairman of the FSA) for failing to provide the LSE council with information it needed to make an informed decision on the Gaddafi donation. Responsibility for what went wrong must rest with the director,” the inquiry said.

    Do money laundering rules also apply to former FSA officials? I wonder how many IFA’s would still be in business if placed in the same position. So tell me Mr & Mrs IFA what would the FSA be saying to you and your firm had you invested £1.5m without reporting your suspicions that your were dealing with illegal funds from a mass murderer? If you don’t know the answer then let me tell you: Recently a Belfast solicitor who failed to tell police about his suspicions was jailed for six months and that I suspect would be your fate too!


    What about conflicts of interest?

    Margaret Cole was involved with PWC’s appointment to look in to Keydata before the FSA applied to the court to have Keydata deemed insolvent due to a POTENTIAL and still being negotiated tax liability.

    But PWC in Luxembourg were the audtitors for both Lifemark and in the Cayman Islands for keydata International.

    Ms Cole announced her leaving the FSA, went of on gardening leave and we now find she is going to head up PWCs legal department!

    This does not imply there is any wrongoing on anyone’s part, but it does potentially breach a statutory duty of the FSA to maintain market confidence. There are lots of places she COULD have gone to where her movement there might not have done caused eyebrows to rise…..

  5. “I am furious about this, it hurts. You have to ask who the people making these comments are and what are they seeking to achieve by trying to undermine my credibility.”

    Well Mr. Johnson now knows what a few thousand IFA’s from the 795 advisory firms that advised on CF Arch Cru fund feel like as the FSA try to ruin their credibility by passing the blame onto them for a fiasco that has arisen from regulatory failure.

    I am sure that Mr. Johnson will not be as furious as the many thousands of investors who will not achieve redress even if the Section 404 review goes ahead after the consultation period. What must the 5 people who have had their complaint rejected by the Ombudsman be thinking – they face losing 50% of their investment despite the fact that there is a multi-million pound lawsuit been filed against the former fund managers Arch Financial Products LLP.

    Now I can only imagine that the Ombudsman rejected the complaints because the investors had an adventurous attitude to risk. However, attitude to risk it is irrelevant when it comes to the CF Arch Cru funds when you read the particulars of complaint made by the board of the SPL Guernsey Cell companies.

    On a completely unrelated matter I would like to point out I like the occasional game of poker and I am well aware of the risks (as well as skill involved) and only take cash to a game I am willing to lose, however I would never sit down at a table where another player was allowed to cheat.

    Now back to CF Arch Cru I do not think anybody is out to tarnish Mr. Johnson’s reputation but the simple fact is his name was used in presentations by Arch Financial Products LLP stating he was a non executive director, and I will send Stephen Tolley a copy of the presentation. If as Mr. Johnson states this is incorrect then this would suggest that Arch Financial Products LLP were breaking several ethical principles set by the FSA
    Interestingly one of the presenters of said presentation was Michael Derks who is now Chief strategist at FX Pro, in Mr. Derks biography on FX Pro website he too seems to want to eradicate history of his time at Arch Financial Products LLP.

    Also Bronwyn Curtis Head of Global Research at HSBC (one of the depositories for CF Arch Cru funds) fails to mention her time at Arch Financial Products LLP in her biography as speaker at the 9th World Investment conference last year.

    I noticed in rival publication FT Adviser that Arch Financial Products LLP had dealings Foundations Capital Ltd, the same Foundations Capital Ltd who had a director called Stephen Brewer who has already been prosecuted by the Securities and Exchange Commission in America for fraud.

    The only way that the truth will emerge from this scandal is from an independent Section 14 inquiry under FSMA the only two people who can call for this is George Osborne and Mark Hoban, considering Hoban walked out of the House of Commons when Tom Greatrex was speaking about CF Arch Cru then he has shown his hand.

    Mr. Osborne enthusiastically backed Mr. Johnson’s previous work on behalf of David Cameron and the Conservative party so maybe Mr. Johnson could tell M. Osborne that the only way to unmuddy these waters is to instigate a Section 14 inquiry.

  6. I have no clients with Arch Cru, but as others will have read elsewhere I have a small number of clients invested in Lifemark backed Keydata plans.

    I think a section 14 inquiry is DEFINATLEY called for with Arch Cru just as some form of Independant investigation (and when I say Independant that needs to be truly so) is needed with keydata otherwsie no lessons will be learnt by anyone other than it is unsafe to advise on anything to do with money as the adviser is NOT being treated as agent/employee of the client as they should be.

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