Former rugby international Mullin sued
Solicitor and wife allege negligence and deceit in managing their investments
A solicitor and his wife are suing company director and former Irish rugby international Brendan Mullin over alleged negligence and deceit in managing their investments.
Hugh and Helena Carty, Park Avenue, Sandymount, Dublin, claim their money was put without their consent into risky investment vehicles and material facts about those funds were deliberately withheld from them. They are also suing ACP Financial Services Ltd and NCB stockbrokers.
They claim they suffered losses of at least ¤1.2 million, including some ¤800,000 losses from investments in two funds of Quinlan Private Capital Ltd (QPCL). The alleged negligence also exposed them to a liability to AIB as some of their investments were security for property loans, they also claim.
They have sued Mr Mullin, ACP Financial Services Ltd and NCB Stockbrokers Ltd. Mr Mullin, Stillorgan Road, Donnybrook, Dublin, was formerly managing director of Powerscourt Capital Partners Ltd, renamed QPCL and then renamed ACP Financial Services.
On the application of Eoin McCullough SC, for NCB, Mr Justice Peter Kelly agreed this week to fast-track the case in the Commercial Court.
NCB director Gregory Dilger said the firm’s “stock in trade is its integrity and reliability” and it wanted an opportunity to publicly rebut the claims against it as soon as possible. The couple’s claim against NCB was unclear and they appeared to be seeking to fix it with liability for losses suffered before they became clients of it, he said.
The couple allege Mr Mullin and ACP caused them to invest some ¤1 million in unregulated investment products, QPCL Fund A and QPCL Fund B, without seeking their authorisation.
The investment “funds” were intended to invest solely in derivatives, including contracts for difference, with the effect of exposing their capital to significant additional risk of loss, they allege.
They would not have authorised such investments and had relied on Mr Mullin in his capacity as managing director of Powerscourt, they claim. Both ACP and NCB (of which the couple allege they became clients in late 2006), are liable for his actions, they claim.
Despite an alleged investment mandate requirement of diversification, they claim NCB failed to diversify their investment in an account with it. Almost all the assets in that account were invested in shares in Zamano plc and their holding fell from ¤272,521 in May 2007 to about ¤10,000 now, they claim.
They also claim all three defendants had produced manufactured and false documents purporting to show the couple signed authority forms and mandates when they had not.
Mr Mullin, they claim, acted as their investment adviser from about 2000 and they placed substantial funds with him while acting as consumers and discretionary investment clients of Powerscourt, later QPCL and then ACP. They relied on ACP and NCB as regulated investment business firms, they claim. An investment agreement between them and Powerscourt in 2001 listed permissible investment types and specifically precluded any borrowing for them or any short positions being taken, they claim.
Between 2001 and 2004, their equity investment portfolio was managed under that agreement and increased from ¤618,251 to ¤701,922 by September 2004, it is claimed. From July 2004 to early 2006 their equity and cash portfolio was managed by QPCL and increased to ¤866,926.
Between 2004 and 2006 they invested additional sums, some via loans from AIB, in property investments prompted by Quinlan Private, an associated company of QPCL.
At AIB’s request they pledged ¤400,000 of their equity portfolio as security, increased to ¤1 million in May 2006.
They claim they instructed QPCL to maintain the value of their equity portfolio at a minimum ¤1 million but, without their consent, Mr Mullin and ACP liquidated their equities in 2005 and “pooled” their into risky investments.
Mr Mullin, they claim, suggested in late 2006 he was concerned with the way QPCL was operating and advised them to open an account with NCB.