The FCA has won a case against a £1m unauthorised investment scheme.
The High Court ruled last week that Xcore Capital Limited and Jonathan Chitty had taken at least £1m from investors, but only a small amount of the investors’ money was ever used for trading.
Consumers gave money to Xcore in return for a 6 per cent annual return. They were led to believe that Xcore would be trading their money on forex and equity markets.
According to the FCA, most of consumers’ money was used to fund an office in Mayfair, brokers’ wages and Chitty’s lifestyle. His personal spending included £102,000 on cryptocurrencies, £58,000 on luxury goods, £24,000 on a Rolex watch and £20,000 towards his wedding.
Chitty must now pay the FCA £917,231- the value of all outstanding sums owed to investors. The FCA says any funds it is able to recover will be distributed to consumers.
Last November, following an application by the FCA, a High Court judge imposed a freezing order on Xcore and Chitty’s assets. They were ordered to stop selling investments regulated by the FCA.
FCA executive director of enforcement and market oversight Mark Steward says: “Prompt action by the FCA stopped this scheme in its tracks and prevented victims incurring much greater losses.
“Consumers should be especially wary when contacted out of the blue about an investment opportunity, and about financial services firms offering investment opportunities without FCA authorisation. If they’re not authorised, it’s probably a scam.”