Recently, REDD-Monitor wrote about a company called Advanced Global Trading that sells voluntary carbon credits to the public as an investment.
Carbon credits are not a suitable investment. Recently the Insolvency Service carried out an investigation into a company called Hildon Green Energy Markets and subsequently ordered the company into liquidation in the public interest. In his judgement, Mr Registrar Jones described the company’s selling of carbon credits as,
“wholly based on a misrepresentation, much like selling a performance motor vehicle for driving but only providing a shell of a vehicle without an engine.”
But AGT’s carbon credits are miraculously different. The price just keeps going up. A couple of years ago, Charles Stephenson, AGT’s director, said that carbon credits are “a commodity that never goes down”. And in 2012, Franklin Connellan, head of investments at AGT, said,
“Over the last 12 months, carbon has seen a return of over 22%. Over the last 18 months a phenomenal 41%. We can comfortably predict that the price will increase by a further 15 to 20% by the end of the year.”
Yesterday, Ian Hainey, AGT’s Public Relations Director wrote to REDD-Monitor. Unfortunately he provided no information to explain AGT’s ever more valuable carbon credits. He doesn’t object to the article, apart from the headline and the final paragraph:
[W]e don’t generally see any particular problem with the majority of your article except for the title and the last paragraph, both of which direct the reader to a particular conclusion (ie. that AGT is running a Ponzi scheme) which are not in any way supported or substantiated by the factual information about AGT in the article.
The headline is a series of questions: Is AGT a boiler room scam? Or a Ponzi scheme? Or both? These seem to me to be legitimate questions. The final paragraph is a quotation from the US Securities and Exchange Commission giving a definition of a Ponzi scheme. It would be unreasonable to ask whether a company is running a Ponzi scheme without defining what a Ponzi scheme is. REDD-Monitor looks forward to Hainey’s explanation of why the price of AGT’s carbon credits only goes up and never goes down.
Hainey accuses a commenter of leaving “defamatory” comments. However, he provides no explanation of why he considers the comment to be defamatory, apart from pointing out that “Mark Smith” (which is presumably a pseudonym) never worked at AGT.
Hainey’s response is posted here in full:
From: Ian Hainey
Date: 20 May 2013 19:08
Subject: Redd-monitor article on AGT
Dear Mr Lang,
I handle PR for Advanced Global Trading (AGT) and I write in connection with your article contained in the below link:
Firstly, we are surprised that you have not contacted us in connection with your article. AGT makes itself available to the press on a regular basis to assist with articles related to the carbon market generally and AGT specifically. We invite you to our headquarters so you can see for yourself first hand AGT’s operations and personnel which we are confident will refute your negative claims against AGT and its personnel.
For your information, please see the attached document which is essentially a small extract of a broader best practices and self-regulatory framework which AGT has developed with its legal counsel in Dubai and in the United States. In the USA, AGT is represented by the head of carbon markets (based in Chicago) at the leading international law firm of Baker McKenzie. This framework has been presented to various participants in the voluntary carbon market, including The Gold Standard, VCS, Markit and NYSE Blue (APX) in an effort to establish it as the industry standard for the buying and selling of Carbon Credits at the retail level. AGT considers its business model and practices as industry leading and best practices which are highlighted in the framework.
We note you are a concerned environmentalist and in this connection below are a few links showing some of the work AGT has done to help the local community, spread the environmental message and encourage companies to offset emissions as part of their CSR programmes:
We present the above links to highlight AGT’s efforts, as part of its business model, in developing sustainable and environmentally conscientious practices, especially in markets such as the Middle East and Africa where environmental issues are still relatively unknown and/or practiced. AGT is proud of its efforts in these regards and knows them to also be market leading.
Notwithstanding, we don’t generally see any particular problem with the majority of your article except for the title and the last paragraph, both of which direct the reader to a particular conclusion (ie. that AGT is running a Ponzi scheme) which are not in any way supported or substantiated by the factual information about AGT in the article. In effect you are leading your readers to a conclusion which at best is your personal opinion but not one that is substantiated by true facts. Therefore, we can only hope that you amend the title and the last paragraph of your article accordingly.
Furthermore, your article and the web link on which it is posted has become a platform for misinformation and defamatory comments by various readers of your article. Such misleading and defamatory comments are unjust and unfairly have an adverse effect on AGT’s clients, employees and other stakeholders. For example, one comment is from a “Mark Smith” who claims used to be employed at AGT but in fact no such person was ever employed by us. We hereby ask you immediately remove such postings. AGT reserves all its rights in this regard.
We hope you read this email in the spirit it is written which is an effort by our company to set the record straight about its business practices. We are of the view your article’s title and ending paragraph make incorrect suggestions and inferences to practices that are untoward. We have noted it is your customary practice to publish correspondence you receive from parties you have written about. While we do not have any particular objection to your publication of this correspondence, please ensure to the extent you do publish it, you do so in its entirety so that your readers have the full context.
UPDATE – 27 May 2013: Document uploaded and link provided to the “attached document” that Hainey mentions in this sentence:
For your information, please see the attached document which is essentially a small extract of a broader best practices and self-regulatory framework which AGT has developed with its legal counsel in Dubai and in the United States.