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Boiler room fraud victims in line for £64k redress

The FSA has obtained a court order against a company involved in a boiler room fraud to secure at least £64,000 in compensation for victims of the scam.

Monobank, a UK incorporated firm, made claims in marketing material that it was in the final stages of setting up a pre-paid credit service in the UK and Europe and had entered into commercial agreements to that effect.

The FSA found no evidence this was the case.

At a High Court case in London Mr Justice Peter Smith ruled Monobank was complicit in offshore boiler rooms cold calling UK consumers and offering them shares in the firm which were worthless.

Some of the boiler rooms selling the shares were Ellis Capital Management, Fallon Brookes, Morgan Stern, Rothmans Capital, and International Consulting Services.

The £64,000 is an interim payment. The FSA is hoping to secure further compensation through future actions.

The regulator is currently aware of 20 victims of this scam but says there may be others who are yet to contact the FSA who could be entitled to compensation.

FSA acting director of enforcement and financial crime Tracy McDermott says: “This is a good example of the FSA taking action against a company which was complicit in the promotion of its shares by boiler room fraudsters.  In this instance, we have been able to recover assets for the benefit of victims, but this is not always the case.

“This civil action is another success in our ongoing battle against unauthorised business and follows successful criminal prosecutions last year against four individuals for share fraud.  Further criminal trials are planned.”

The FSA first took action against Monobank last August when it took steps to freeze its assets through a High Court injunction.

Consumers who are Monobank shareholders or who have subscribed for shares in the firm and who are not already in touch with the FSA should contact the regulator through its customer contact centre on 0845 606 1234.

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