Fine wine investment scheme wound up for abusing client funds

Global Wine Exchange Limited was shut down in the High Court on March 22 after an investigation by The Insolvency Service into complaints concerning the company’s activities.

The fine wine investment scheme promised clients a quick profit, but failed to deliver. From January 2019 to March 2021, investigators discovered an income of £1.9 million, but wine stock purchases of only £770,000. Clients would pay over the odds for wine with funds going into multiple different bank accounts (some of which were not in the company’s name.) 

The director, Adrian Loftman, and sales consultants took the majority of the money for themselves. In the nine months from July 2019 to May 2020, over £1million of payments came in. Almost two thirds of that went to Loftman and co, while the remaining £330,000 was spent on wine. The investigators also stated two of the three bonded warehouses which supposedly contained the wine clients had invested in did not have any official contract with Global Wine Exchange. 

Furthermore, following the liquidation of the Bordeaux Wine Company in August 2021, Global Wine Exchange targeted former customers. Global Wine Exchange claimed that, for a fee, if former customers submitted a false claim to the liquidator of Bordeaux Wine Company, they could recover their investments. No funds were recovered.

Chief Investigator Edna Okhiria said: “During our investigations, we found that the Global Wine Exchange carried out unscrupulous acts of misconduct. The company misled many investors, some who were elderly or vulnerable, who did not receive the high returns they were promised.”

Global Wine Exchange’s activities have been under scrutiny for some time. Tony Hetherington, writing for This is Money in February 2020, detailed how Loftman was exploiting clients by overcharging them for wine which was often never sold on. The London-based company also claimed to have “over a decade of experience”, and yet the incorporation date is recorded as April 17 2018.

Employees were tasked with making 300 or more calls a day, including to numbers registered on the Telephone Preference Service which should not be contacted with unsolicited sales calls. The cold-calling methods used by Loftman’s operation pressured elderly and vulnerable individuals, including those with Alzheimer’s, into investing. It is unclear whether the victims of the scam will be compensated.

Okhiria said that the decision to wind-up Global Wine Exchange in the public interest should “put a stop to anyone else becoming a victim of their investment scheme.”