UPDATE: As of 2/23/09, I have modified this post to remove mentioning the name of a particular firm after their attorneys contacted me. However, my warning to readers stands and if in doubt about an investment opportunity, don't proceed.
A few months ago, I attended a Vinfolio wine dinner in San Francisco and spoke to one of our Bay area clients, a doctor, who told a story about being solicited to invest in wine by someone calling from Canada representing a UK firm. The pitch she repeated to me sounded more than a bit questionable but she went ahead and invested some money.
I told her that I would research the firm to see what I could find (which wasn't much other than the sites above). About that time, I was contacted by a journalist in France, Kathleen Buckley, who was researching a story about wine fraud and investing for Wine Enthusiast magazine. I put Kathleen in touch with my client and just learned a few days ago that Kathleen's story titled "Wine Fraud" had been published in the 12/22/08 issue the Wine Enthusiast. This is a must read article (4-5 pages if you print it) as Kathleen does an excellent job pulling together various aspects of the topic into a coherent whole. I think you'll find the examples provided of the various sales pitches used by con artists particularly interesting (some are just ridiculous statements that should scream "scam" for any potential investment).
My client told me last week that she reported the UK firm to the SEC and FTC. She also asked them to sell her wine but has not heard back from them. She doesn't expect to get much back, if anything, but part of the initial charge was made to her American Express card. Amex has agreed to investigate and reverse those charges
In doing a new Google search on the UK firm today, I found a thread on a site called WorldLawDirect.com with over 40 posts (started on 9/4/08 and with a post as recent as yesterday). Suffice it to say, they are consistently negative.
As I note in Kathleen's article (and in past blog posts), if you're investing in wine, know your retailer and insist on completely transparent transactions and disclosures. If they balk, go elsewhere. Research the firm on the Internet (and with wine friends) before parting with any money as you may find threads like the one above or positive ones which help confirm the legitimacy of the operation. If you're still not sure, contact me at Vinfolio and I'll be glad to look into it.
