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FCA wins case against £16m unauthorised investment scheme

The FCA has won a key court case over the promotion of unauthorised investment schemes.

The High Court has found that Capital Alternatives, which ran investment schemes involving rice farm harvests in Sierra Leone and carbon credits across Brazil and Australia, must pay back nearly £17m to investors after the FCA alleged the ventures were promoted by “false, misleading and deceptive statements.”

The case tested the so-called ‘regulatory perimeter’ of the FCA, as it was requesting a restitution order from an unregulated business.

Under the Financial Services and Markets Act 2000, the FCA can take civil action against non-regulated firms, including asset freezes and financial penalties.

FCA director of enforcement and market oversight Mark Steward says: “This judgment should send a clear message to all of those who use corporate facades to sell dubious investments. We will do what it takes to hold them to account for their misconduct.

“We are acutely aware from experience that the risk to investors who deal with unauthorised firms is that most, if not all, investors are likely only to get a fraction of their money back.

“Consumers should recognise that there are huge risks involved when investing with unauthorised businesses.”

The FCA is currently looking to apply further restraints on the assets of the individuals involved, while the High Court’s decision is still open to appeal.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Hooray! Some proper regulation at last. I sincerely hope that we hear about more cases like this.

  2. The words “The case tested the so-called ‘regulatory perimeter’ of the FCA” are very interesting.

    Also, the FCA stating “from experience … the risk to investors who deal with unauthorised firms is that most, if not all, investors are likely only to get a fraction of their money back.”

    I’ve never seen evidence of this myself except in one case but this is perhaps a line that needs to be repeated.

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