In November 2012, REDD-Monitor reported on a company called Enviro Associates. The BBC had secretly filmed Luke Ryan, a director of the company, making misleading claims about carbon credits as investments. Ryan said there was “serious money” to be made.
A company called Carbon Neutral Investments provides clearing and settlement services for several companies selling over the counter carbon credits, including Enviro Associates. At the time the post was written, Enviro Associates and Carbon Neutral Investments shared the same director, Paul Seakens, and the same address in London.
A series of worrying comments from people who had had contact with Carbon Neutral Investments were posted following Seakens’ response. Meanwhile, the Financial Services Authority has a warning message on its site:
Several unauthorised firms promoting and selling carbon credits are telling investors that Carbon Neutral Investments Limited (CNI), a firm authorised by us, will handle the money in their investment. We believe this is done to suggest investors will be protected as though they are dealing with an authorised firm. But this is not correct.
While this warning is aimed more at the unauthorised firms selling carbon credits, the comments on REDD-Monitor suggest that the FSA should perhaps look at little more closely at Carbon Neutral Investment’s operations.
Thomas Knifton was director of Carbon Neutral Investments from 31 October 2011 to 15 January 2012. On his LinkedIn page, Knifton explains that he is an “Ex Owner – stake sold” of Carbon Neutral Investments. He states that his job was “Procurement of Carbon Credits for Offsetting purposes” from September 2010 to February 2012.
A cached page of Carbon Neutral Investment’s website, dated 29 October 2011, (available on archive.org) explains that at that time the three principle partners were Paul Seakens, James Brown and Thomas Knifton. Here’s what it says about Knifton:
Tom started his career over 10 years ago as a stockbroker and in 2001 launched his own brokerage catering for discreet high net worth clients and corporate advisory work. Tom’s entry to the carbon market was trading EUAs and CERs culminating in launching Carbon Neutral Investments with James Brown and Paul Seakens to capitalise on what we feel is the fastest growing market, bringing a sense of control and stability into an unregulated field. Tom is a keen rugby player and an avid sailor. He can often be found on the Old Classics at Cowes or the fast paced racing yachts on the East Coast.
All three partners gained their first experience with carbon markets when they launched Carbon Neutral Investments.
In January 2010, the Financial Services Authority issued a Final Notice to a company called Falcon Securities about the way its subsidiary Montague Pitman Stockbrokers dealt with clients. The Financial Services Authority said that it would have fined Falcon Securities £240,000 except for the fact that the company went into administration.
The Knifton family’s fingerprints were all over this boiler room operation. Falcon Securities was a subsidiary of Alltrue Investments, whose chairman was Leo Knifton, Thomas Knifton’s father. Montague Pitman was founded by Richard Beese, David White and Thomas Knifton.
(Richard Beese and David White are also directors of a company called Bwcarbon Ltd, which shared the same address as MH Carbon, until MH Carbon changed its registered address. MH Carbon appears to be another boiler room carbon credit operation.)
At the time of the launch, Alltrue Investments owned 57.9% of Montague Pitman. Leo Knifton said,
Montague Pitman are a private-client stockbroker in the heart of the City, providing dynamic investment solutions across a range of financial products in today’s fast moving markets. They provide Private Investors with real time professional advice covering all major UK indices, including the FTSE 100, All Share, AIM and PLUS Markets as well as on PEPs, ISAs and CFDs.
But the FSA’s Final Notice makes clear that the “professional advice” provided by Montague Pitman sales team was in fact a high pressure sales pitch:
In 18 of the 38 transactions reviewed by the FSA, the adviser gave the client the impression that there was a need to move quickly to purchase shares, including suggesting that the firm had a limited allocation of shares which were already selling fast and could be sold out by the end of the day. Although it is possible that that they could have been sold out, analysis actually showed MPS continued to recommend the shares to other clients for several days after the recommendation.
An article in the Financial Times about Falcon Securities ran under the headline, “The little bucket shop of horrors”.
So how deep is the Knifton’s involvement in Carbon Neutral Investments? Did it end when Thomas Knifton retired his position as director in January 2012? Or is the Knifton family still pulling the strings?