The Financial Conduct Authority is taking at least 16 firms and individuals to court over claims they were operating or promoting collective investment schemes without its authorisation.
The regulator has taken action against Capital Alternatives, African Land Limited, Reforestation Projects and at least 13 other firms and individuals in the belief they have acted illegally in the running and promotion of two investment schemes
The case focuses on African Land, also known as Agri Capital, which offers investments in rice farm harvests in Sierra Leone and is operated by African Land Limited and Reforestation Projects, also known as Capital Carbon Credits, which offers investments in carbon credits generated from land in Sierra Leone, Brazil and Australia and is operated by Reforestation Projects Limited.
“We do not regulate the sale of land, property or carbon credits, but we do regulate CISs and a firm must be authorised by us to operate them from the UK. We also believe the defendants made misleading statements or gave false information when promoting the schemes to investors,” a statement by the FCA says.
The High Court has ordered a preliminary trial to decide whether the concerned investment scheme are in fact CISs. The date of this trial has not yet been confirmed but it is expected to take place in the autumn of 2013.
The FCA adds: “While we wait for the hearing to take place we have obtained undertakings and court orders that freeze the major assets of most of the defendants and prevent them from promoting the schemes.
“This was done to protect as much of the money that investors had paid to the defendants as possible, and to prevent them from taking more money from new or current investors in the schemes.”