The art of buying your investors’ silence

Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. 

Ms C.W. writes: In 2020, I came into some money which I decided to save for my future. Art is a hobby of mine, and I came across Smith & Partner’s website and made an enquiry. 

I received a call from it and was told that if I made a purchase, the company would store the artwork and update me regularly on financial progress. 

I was told I could sell at any time, which would take about two weeks.

Tony Hetherington replies: You told me that what Smith & Partner claimed in its sales pitch was not what happened in practice. You bought two prints for a total of £3,000, and were told later that they showed a modest increase in value.

You knew that after one year, the art company’s terms and conditions meant you would get a demand for £150 in storage fees which would strip away most of your paper profit, so you asked Smith & Partner to sell.

And this is where you say things went badly wrong. You have told me that the salesman stopped replying to your emails and did not answer when you phoned. Eventually, you say you were told that the market was flooded and it was not a good time to sell.

But you did not give up. You found someone else at Smith & Partner who would talk to you. You explained you were pregnant and needed the money. He told you the previous salesman had been fired, and that your prints were showing a profit of 15 per cent.

The prints could be auctioned in the first few months of this year, but to be eligible, you had to invest another £1,000 to £2,000 within 24 hours. 

You say that you asked for written evidence that your artwork would definitely be in the auction, but the new salesman protested that he had never been asked for such a thing before, and that Smith & Partner would not provide any written guarantee. 

You then refused to hand over any more money, and like the earlier salesman, this one broke off contact too.

You gave me copies of paperwork proving you had bought the prints and paid for them, and at my request you signed a legally binding letter of authority authorising Smith & Partner to discuss your complaint and produce any records I requested.

I gave the authorisation to Luke Sparkes, the owner of Smith & Partner in London. I asked whether it was true his company had dumped you because you refused to part with more money. 

And because his salesmen claim so much over the phone, and put so little in writing, I asked for copies of all recorded phone calls.

What happened next was fascinating. Just 48 hours after I questioned Sparkes, you emailed me, saying: ‘I wish to fully withdraw and retract each and every allegation I have made against Mr Sparkes and Smith & Partner Limited. I further hereby revoke with immediate effect the signed Letter of Authority which I gave to you previously.’

Gone was the friendly tone of all your earlier ‘Hi Tony’ messages, asking for help. Instead there was legal wording, ending with: ‘I shall not make any further comment about this matter.’ 

In a nutshell, you were repaid. And you are not the only client of Smith & Partner who has been offered a refund in a bid by Sparkes to silence The Mail on Sunday. Sparkes refused to answer any questions or produce any recordings, telling me: ‘The matter raised by Ms C.W. is now the subject of a signed settlement agreement.’

I spent more than a month helping another of Sparkes’ investors who told me: ‘I invested over £300,000 with Smith & Partner. They won’t sell my art. You want my story.’ She provided me with a mass of evidence. 

‘You are a godsend,’ she told me. Then she was offered up to £15,000 by Sparkes, followed by monthly payments for the next four years, if she would send me an email – which she did – with exactly the same wording withdrawing every allegation she made.

Another investor complained he was told more than once his prints would be sold on condition he first bought even more. 

After gathering evidence, on February 1, I put two pages of questions to Sparkes, backed by the investor’s signed authority. And by February 2, the investor had been offered his money back to withdraw his complaint, with exactly the same email to me as the others.

And this is not the record holder. Just over a week ago, a Smith & Partner investor contacted me at 3.22pm. I replied at 3.38pm, asking for more details. The investor told Sparkes he was in touch with me, and at 4.39pm I received an identically worded email withdrawing everything he had told me. The whole episode lasted just over an hour. Money talks, but it also buys silence.

If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.