Investors in unauthorised investment scheme to get £3.7m compensation
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The High Court has ruled that investors in an unauthorised collective investment scheme run by Upton & Co Accountants are to receive £3.7m in compensation.
The compensation will be distributed immediately to investors on a pro rata basis.
Upton has also agreed to make further monthly payments of £10,000 which will be returned to investors in due course.
The Wakefield based firm, which has never been authorised by the FSA, operated a collective investment scheme known as the “Currency Plan” promising investors high rates of return.
The money was to be used to invest in foreign exchange markets. However, limited foreign exchange trading occurred and very little was ever returned in cash. Darren Upton, a member of the Association of Chartered Certified Accountants, owned and controlled the firm.
In February 2009 the FSA launched an investigation into Upton and realised that the firm was carrying out unauthorised business.
A month later, the FSA secured a High Court injunction to stop the activity and freeze the firm’s assets.
FSA director of enforcment and financial crime Margaret Cole says: “This is a fantastic result. It is so rare for victims of unauthorised businesses to get any money back because normally the money is misappropriated and victims of unauthorised firms are not protected by the Financial Services Compensation Scheme.
“But as we intervened early in the scheme’s life cycle we were able to recover a large proportion of the original amount invested. Normally the amount recovered - if any - is often just a few pence in the pound so securing this amount is a real coup.”
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Readers' comments (6)
Anonymous | 20 Jul 2010 1:57 pm
OK Good Work I think by the FSA BUT if the Company is going to pay back £10,000 per month that implies to me (unless I am stupid) that they are continuing to trade.
If I was to set up a scheme like this would the FSA let me continue to trade as well????
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Anonymous | 20 Jul 2010 2:36 pm
so how many pence in the £ does 3.7m represent? as FSA press release neglects to say suspect not as high as we are led to believe.
and echo 1st poster's coments re continuing to trade...
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Robert Rice | 20 Jul 2010 3:06 pm
Re ^^^^^^^^ , I can't believe i have to say this, but....
they are accountants, and accountants aren't (generally) regulated by the FSA.
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Anonymous | 20 Jul 2010 4:28 pm
From previous postings on the FSA site, this will be about 80% return but it's all cash that was frozen not compensation! Common sense to allow the company to continue so that they can maximise investor return.
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Phil Castle | 21 Jul 2010 9:08 am
Well done FSA (praise where praise is due). With regard the accountants continuing to trade, we don't have all the facts, sdo we should not judge.
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AJ, Glasgow | 21 Jul 2010 9:09 am
Some posters here have their heads screwed on better than others (anonymous doesn't do well) ... this was a Ponzi scheme so there was little if any actual investment going on. Money out in these schemes is paid out from money in, and the operator takes a big cut. So you're never ever going to get 100% back.
Also the FSA didn't register this lot, and never will. Given the court action the chances of the individuals getting future authorisation should
be zero.
There's a question over whether the ACCA should have authorised this lot, though it could be that they spotted it in the first place.
On a wider point, if people are attracted by unauthorised investments promising good returns they should run away as fast as they can. This one was nipped in the bud early and usually far more money than this goes south, but unfortuately this is the exception rather than the rule..
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