FSA freezes £850k paid to landbanking firms
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The FSA has secured interim injunctions from the High Court and frozen approximately £850,000 of customer investments into unauthorised landbanking firms.
The firms against which the orders have been made include St Clair Estates, OFG Investments, Option Land UK, and GIG Properties.
The orders prevent the companies from selling plots of land pending further investigation from the FSA and the conclusion of ongoing civil proceedings.
The FSA suspects these companies were running a landbanking operation which amounted to an unauthorised collective investment scheme.
The firms are believed to have marketed plots of land on a site at Winkleigh Airfield in Devon.
The FSA does not regulate the sale of land but landbanking often amounts to collective investment, something that requires FSA authorisation. None of the above companies is authorised by the FSA.
FSA head of unauthorised business Jonathan Phelan says: ”This is a further example of the FSA taking action to protect consumers from unauthorised landbanking firms and the individuals behind them.
”Anybody investing in land should always have it independently valued to check its worth. Furthermore, if consumers are ever sold land as an investment, and on the basis that someone else will manage it for them as part of a wider site, they should seek the advice of a firm that is authorised by the FSA.”
The FSA first took High Court action against a landbanking firm – UK Land Investments – in 2008. Since then the FSA has obtained injunctions against nine firms involved in landbanking.
Earlier this month the FSA banned landbanking firm Cityshore Commodities from selling land in the UK and ordered the company and its director Aaron Walker to pay £200,000 redress. The summary judgment secured in the High Court confirmed that Cityshore sold land illegally to UK consumers.
In November, in a separate landbanking case, the FSA executed search warrants on nine premises in Kent and Greater London and five individuals were arrested.
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Readers' comments (2)
hughjeego | 21 Dec 2011 10:47 am
Finally, proper use of the FSA`s unlimited powers regarding a genuine situation. Late as usual but welcome all the same.
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Paul Howard | 21 Dec 2011 10:53 am
Just though - although what the FSA is doing is 'right' - who pays for it?
I am guessing it gets factored into the overall fees the Financial Services industry pays - which doesn't seem right?
I don't think the non-authorised work the FSA does should be paid for by the industry - as we don't benefit (unless that money 'not invested' in these schemes. get invested into FSA authorised areas) from it.
Am I right or wrong?
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