In a newspaper advert, IIT claimed that anyone who bought shares in IIT would be guaranteed a minimum annual return of 23%. See the offending advert below:
In reality, the value of the fund started decreasing rapidly after Isengard’s defeat at the Battle of Helm’s Deep, falling to a value of 0.001 pence per share, thereby giving a negative return of -828%. Investors were understandably angry that they had lost considerable sums of money, and made a group complaint to the MEAA.
IIT argued that the wording of the advert did not technically exclude the possibility that shares could decrease in value. In the alternative, it was naive of customers to believe the claim, given that it was made during a period of general unrest.
IIT’s Fund Manager, Saruman the White, observed that when the advert was produced, there was every sign that IIT’s investments, centred around Isengard’s military and industrial output, would continue to perform well and meet or exceed the promised 23% return for investors. To quote the disgraced fund manager:
Really, who could have predicted that two hobbits, some talking trees, and a rabble of horse-obsessives could have brought down Saruman the Great and his state-of-the-art armed forces?
However, the MEAA held that the advert violated the Code since it should have contained a written caveat that investments may decrease in value. It was unjust to blame customers for buying shares in what turned out to be a very dodgy investment trust.
As for MEAA’s erstwhile boss, he was last heard of wandering the wilds of Eriador with his unpleasant sidekick, Gríma Wormtongue.