The two Englishmen began showing up at investor conferences in 2015, armed with an enticing proposition. Investors could, via a London-based brokerage, Bordeaux Cellars, lend money to wealthy borrowers who needed fast loans, no questions asked. The loans would carry a 16% interest rate. The lenders would receive 12%, paid quarterly.
Normally, such a high rate of interest meant that the loan would be dicey. Not so, the two men claimed—these loans would be secured with prestigious wines from the borrowers’ cellars, transferred to climate-controlled, secure warehouses overseen by Bordeaux Cellars. “What happens in case of a default?” asked Stephen Burton, the 57-year-old head of the firm, at a 2015 conference in Cancun. “We sell the wine.”
Read more about how this vinous investing scheme proved too good to be true.
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