TONY HETHERINGTON: Gloomy picture for investors as ‘art’ firm fails

My elderly and frail stepfather was called by art company Smith & Partner Limited during the Covid lockdown.

They befriended him and encouraged him to withdraw his savings of £72,000 and invest with them.

They promised an imminent high-yield deal that never materialized, and the art prints they sold him aren’t worth the prices he paid.

Ms JE writes:

Let me start with the latest news. The so-called art investment company Smith & Partner has collapsed.

The offices are closed, the phones are not answered and my email inbox is chock full of messages from victims of what can now only be described as a multi-million pound scam.

And last Monday the company – which had tried to relaunch as Art Assets London – finally announced it was going bankrupt.

Smith & Partner sold expensive high-quality art prints as an investment, promising “growth and stability from the start.”

Investors were assured that they could easily convert their prints back to cash, with the company reselling them to new customers or at third-party auctions. But when investors tried this, they got a series of excuses.

Some were told they could make a few hundred pounds profit on their existing prints, but only on the condition that they put the proceeds – plus more money – into new prints.

Last December I raised the alarm for the first time, with further reports in January and April. After you contacted me in February, I asked the company’s owner, Luke Sparkes, to justify his ads promising growth.

On the other hand, when your stepfather asked a real auction company to sell just a few prints for which he had paid a total of £3,500, the company said it was simply not worth listing them as they were only worth about £100 each goods.

Your stepfather was also subjected to the same story that other investors have reported. He was told that his prints were about to be sold, but the buyer wanted more prints added, costing a further £10,000.

Your stepfather was suspicious and refused to spend new money. Others who did pay said the promised sale suddenly fell through, leaving them even more out of pocket than before.

Sparkes told me he was gone and would answer soon. It became clear that he wanted to leave the company and Sparkes formally resigned as sole director and handed the company over to a new owner, Michael Conway.

He got off to a good start and proposed paying back £71,700 in installments and perhaps with a modest profit. He blamed Sparkes for what he told me was “bad policies and procedures”—although I’d say it’s more accurate to describe them as “lies.”

Your stepfather only received one installment from Conway, so he’s still facing losses in the tens of thousands of pounds. I can tell you that I know investors who have invested up to £300,000 in Smith & Partner and are now extremely upset and understandably furious.

A family discovered that an elderly investor with dementia had left £100,000 behind. The company’s former head of marketing, Chris McPartlin, stepped down early last year after just three months of service.

He told me that salespeople were very busy on the phone, writing on a bulletin board the huge sums they persuaded investors to put into fine art prints.

And he added: “The unusual atmosphere in the office was new to me, with people driving around on e-scooters, but I just thought this was the new generation back then.”

The record-keeping was not taken seriously, with an employee later telling him that £900,000 had suddenly disappeared from the company’s accounts without explanation.

Smith & Partner’s wealth came from false claims, such as membership in the Fine Art Guild, which it said was the “regulator.” The truth is that the Guild is not a single regulator. It’s a respectable trade organization — and it would have evicted Smith & Partner anyway.

Sparkes tried to buy investors silence by promising them payments if they signed an agreement not to talk to me. He even hired lawyers to harass me but it didn’t work because he lied to them too.

Investors have now submitted complaints to Action Fraud and the Serious Fraud Office. The Mail on Sunday will provide all its evidence to support any police investigation. Luke Sparkes and Michael Conway were both invited to comment. I didn’t either.

• If you believe you have been the victim of financial misconduct, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Due to the large number of questions, no personal answers can be given. Only send copies of original documents, which unfortunately cannot be returned.